Pilbara Minerals completes Tabba Tabba Study

THE DRILL SERGEANT: Pilbara Minerals (ASX: PLS) has finalised a Feasibility Study on the company’s Tabba Tabba tantalum project, located near Port Hedland in Western Australia.

According to the company the Study has demonstrated Tabba Tabba to be a robust project with low capital and mining costs.
 
The company said the completion of the Feasibility Study has it on course for first production from the project, which is forecast for the third quarter of CY 2014 subject to project funding.
 

The Feasibility Study has defined an initial mine life at Tabba Tabba of 19 months producing approximately 365,000 pounds of tantalum pentoxide (Ta2O5), within a minimum 5 per cent Ta2O5 concentrate, delivering EBITDA (earnings before interest, tax, depreciation and amortisation) of $16 million.

 

Source: Company announcement

 

“The completion of the Feasibility Study is a significant milestone, with the positive results clearly demonstrating that the Tabba Tabba project’s high grade and quality concentrate will deliver a technically and financially robust project,” Pilbara Minerals executive and chief geologist John Young said in the company’s announcement to the Australian Securities Exchange.

“Based on the results of the Study, Pilbara Minerals and its Joint Venture partner, Nagrom, intend to fast-track the development of the Tabba Tabba project, subject to the completion of project financing.

“Tabba Tabba will deliver a steady source of cash flow for at least the next two to three years, with potential for future growth from a number of sources, including the development of the nearby Strelley project.”
 
Pilbara Minerals entered into a 50/50 joint venture agreement with metallurgical and gravity processing specialists, Nagrom in October 2013 to evaluate, develop and mine the Tabba Tabba project.

Pilbara explained the two companies intend developing a boutique open cut mining and processing operation capable of generating attractive cash flows and returns for a small capital outlay.
 
Key Financial Highlights of Feasibility Study:

Project Revenue $30.2 million;

EBITDA $16 million with Project NPV of $14.4 million at an IRR of 162 per cent;

Capital Cost of $3.9 million ($1.5 million already spent, plant capital items already 90 per cent completed);

Life-of-mine (LOM) off-take agreement in place with world-leading tantalum producer, Global Advanced Metals Wodgina Pty Ltd (GAMW); and

First full year production (2014-15) operating costs forecast at $34.74 per pound.

Project Highlights:

Maiden JORC Ore Reserve of 133,000 tonnes at 1,290ppm Ta2O5;

Total LOM production of 364,000 pounds of Ta2O5;

Production of 256,000 pounds of Ta2O5 in first full year of operations; and

All government approvals necessary to commence production are well advanced, and Pilbara Minerals and its Joint Venture partner Nagrom intend to fast-track construction subject to completion of financing;

Future Growth Opportunities:

The Tabba Tabba orebodies are open along strike and at depth – upside exists for the identification of further resources within and adjacent to the immediate pit area;

Plant throughput rate is based on conservative assumptions; and

Additional production potential from processing lower grade stockpiles, or through the development of the nearby Strelley project also secured under the Pilbara Minerals/Nagrom JV.

Website: www.pilbaraminerals.com.au