THE BOURSE WHISPERER: Altura Mining (ASX: AJM) has received results of a Mining Preliminary Feasibility Study carried out on the company’s Pilgangoora lithium project, located south of Port Hedland in Western Australia.
The study was completed by Western Australian-based mining consultants Orelogy Consulting, which has now been commissioned to further develop the scope of the current study to Definitive Feasibility level with completion anticipated at the end of March 2016.
The Base Case of the Study focussed on production of 150,000 tonnes per annum of spodumene concentrate via processing of one million tonnes per annum ore feed, the results of which determined:
LOM Revenue of $1,350 million;
LOM Cashflow of $609 million;
NPV of $277 million and IRR of 42.5% (8% discount rate);
18.92 million tonnes of total ore feed; and
2.886 million tonnes of spodumene concentrate production.
Altura explained that initial marketing indications demonstrated sales of spodumene concentrate in excess of the Base Case could be achievable, so an increased production case of two million tonnes per annum was also evaluated, which determined:
LOM Cashflow of $623 million; and
NPV of $392 million and IRR of 60% (8% discount rate).
“The results of the revised schedule confirm that the Pilgangoora project can support a higher production rate if market contracts for the spodumene product are secured,” Altura Mining said in its ASX announcement.
The Study also delivered an increased resource estimate using the breakeven cut-off grade of 0.4 per cent lithium oxide, bringing an upgraded mineral resource estimate of 35.7 million tonnes, a 37 per cent increase on the company’s previous estimate of 26.1 million tonnes.
“The results from the Mining Study are extremely pleasing and once again confirm the significant potential of the project,” Altura said.
“The company will continue to direct substantial resources to the project in line with its objective for fast tracking the development.”