Cradle announced the results of the Definitive Feasibility Study (DFS) on 20 April 2016. Financing and off-take agreements for the project are well advanced and expected to be completed by Q4 2016 at which point a decision to mine can be made. During the period between the completion of the DFS and the decision to mine, a value engineering program of work will be undertaken that will focus on upfront capital cost reduction and accelerating the execution program.
The DFS is based upon an open pit mining operation producing 1.3Mtpa mill feed for a four year period then increasing to 2.6Mtpa for the remaining life of mine (LOM). This staged production has been done to reduce upfront capital and limit market penetration to around 5% in the early years. The project LOM has been constrained to 30 years.
The DFS flowsheet consists of a milling and two-stage flotation circuit, followed by two-stage leaching circuit to remove impurities from the concentrate. The leach product is then converted to ferroniobium in a furnace. The final product is crushed and packaged for direct sale to the steel mills. The process is similar to the circuits of the current niobium operations (Catalão, CBMM and Niobec), with the flotation regime most similar to Niobec which has a similar geology and mineralogy to the Panda Hill primary material. The leach is based on the Catalão process and the ferroniobium converter based on some of the principles from the final stage of the CBMM pyrometallurgical circuit.
The financial results from the DFS are shown below.
Key financial results:
- NPV8 pre-tax US$796M
- NPV8 post-tax US$542M
- IRR 32% (pre-tax)
- Average LOM production of 5,400tpa Nb (8,200tpa FeNb)
- Initial capital expenditure of US$196M
- Payback period 4.75 year
- LOM of 30 years
- LOM average EBITDA US$112M per annum
Key mining results
- 1.3Mtpa mill feed for the first 4 years
- 2.6Mtpa mill feed from Year 5
- First 10 years average grade: 0.68% Nb2O5
- First 10 years average recovery: 61%
- First 10 years Mining Strip ratio 2.5:1
- LOM average grade: 0.54% Nb2O5
- LOM average recovery: 61%
- LOM average Mining Strip ratio 1.5:1
With the completion of the DFS and the conclusion of the financing and off-take arrangements to occur in Q4 2016 it is expected that the detailed design work can start in late 2016 with construction etc. leading to a completion date of Q2 2018 for the plant start-up. The impact of the value engineering on the duration of the execution schedule may bring the start-up date forward, and this will be confirmed in the next few months.
JORC Required Cautionary Statement concerning Production Target Results including Inferred Resources
Cradle advises that the production targets after the first 10 years and related results reflected in this announcement are preliminary in nature as conclusions are drawn partly from Inferred Mineral Resources. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of conversion of Inferred Mineral Resources to Indicated or Measured Mineral Resources or that the production target itself will be realised.