What the Analysts Say
WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.
Website: www.beerandco.com.au
Company: New Age Exploration (ASX: NAE)
Lochinvar is part of the Canonbie coal field, which was first drilled in the 1950s by the UK National Coal Board.
Lochinvar was explored intermittently until the mid-1980s, when it was shelved with much of the UK coal industry.
NAE announced the results of its scoping study in October 2014, affirming coal quality, with cap.ex of US$284 million for 1.35 million tonnes per year of product coal at a cash cost of US$70 per tonne, delivered; or US$79 per tonne all in costs.
First coal is expected early 2018.
Key Outcomes of scoping study on Lochinvar
First coal 2018 Q1;
Mine average 1.9 million tonnes per year of RoM coal, with CHPP yield of 71 per cent for 1.4 million tonnes per year of product coal;
Mining inventory of 47.3 million tonnes, of which 38 per cent is from Indicated
Resources, for 33.7 million tonnes of saleable coal;
Project capital costs: US$284 million (plus feasibility and corporate costs);
Cash costs of delivered coal: US$70 per tonne, plus US$9 per tonne of sustaining capital.
Next steps
The quality of the cost estimates is of a high standard.
NAE needs more assessment of the geology, starting with seismic surveys, to affirm the mine plan.
Work on the Environmental Impact Assessment will start early in 2015.
The PFS is expected to be completed late in 2015.
Impact on Beer & Co’s valuation
Beer & Co’s valuation was based on our assessment of capital and operating costs and production rates.
The major impact on our valuation was not a result of the scoping study but the low current share price forced us to reduce our estimate of the price at which equity will be raised.
Website: www.breakawayresearch.com
Company: Altech Chemicals (ASX: ATC)
Following a change of management and name, Altech Chemicals (previously Australian Minerals and Mining Group) has recently commenced a BFS on its 4,000 tonnes per annum High Purity Alumina (HPA) project.
Work over recent years has developed a patented, low cost acid leach process that has produced High Purity Alumina HPA of the requisite quality.
As a result of the recent Integrated Plant Study (IPS) Altech has published estimated operating costs in the order of $8,600/tonne of 99.99 per cent purity HPA for a small scale plant, which is significantly lower than our estimated current industry average costs of approx. US$14,000 to US$17,500/tonne for the equivalent product, and could be a potential game changer for the industry.
Our view is that share price catalysts will be material progress on the BFS and optimisation testwork, and for the valuation to increase as the HPA project is advanced and de-risked.
Altech Chemicals is concentrating on the development of an HPA production operation, to enter into what is forecast as a rapidly growing market driven largely by the increased demand from the electronics industries.
Altech owns significant aluminous clay resources in Western Australia, which it has demonstrated is suitable feedstock for the proposed process.
Plans are to mine and beneficiate clays at its 100 per cent-owned Meckering deposit, some 130 kilometres east of Perth, and then ship the material for processing at the proposed plant at the Tanjung Langsat Industrial Complex (TLIC) in Johor Bahru, in southern Malaysia.
Altech Chemicals is targeting the lucrative HPA market, which is expected to grow strongly over the next few years on the back of technology applications.
The current market, estimated at approx. 19,000 tonnes per annum of HPA, has been forecast to more than double over the next few years to over 48,000tpa to supply sapphire glass and other products to the strongly growing LED and electronic industries.
The company is currently working on a bankable feasibility study, which it expects to complete in Q3, 2015.
Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.
The views, opinions or recommendations of this article do not in any way reflect the views, opinions, recommendations, of The Resources Roadhouse.
The Roadhouse makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions.