Korab Resources Ltd. said March 21 that an updated pre-feasibility study to develop its Winchester magnesite deposit as a direct shipping ore operation in Australia's Northern Territory estimated pretax earnings from the project at up to US$614.2 million over the project's 12-year life.

The project will have an estimated net present value after taxes of about US$184 million, at a 12% discount rate, assuming a magnesite rock selling price.

The study was based on various capacity levels ranging from 375,000 tonnes per annum to 1 million tonnes per annum.

Initial production will start at 600,000 tonnes per year of salable magnesite rock in the first year, then increase to 800,000 tpa in year four and to 1 mtpa in year nine.

The study assumed a magnesite rock selling price of US$105/tonne on a free-on-board basis.

The updated study uses only the indicated resources at the deposit, which total 12.2 million tonnes of magnesium carbonate rock.

The ASX-listed company has an agreement to export 500,000 tonnes per year of magnesite rock through Darwin Port, which is about 85 kilometers from the Winchester project.