Neometals Ltd. said May 22 that an update to its 2009 definitive feasibility study for the Barrambie vanadium-titanium-magnetite project in Western Australia outlined a posttax net present value, discounted at 10%, of A$199 million, a 15% internal rate of return and a 5.1-year payback period.
The updated study was based on a probable ore reserve of 39.9 million tonnes grading 0.78% vanadium pentoxide and 15.1% titanium dioxide, together with an indicated and inferred resource of 280.1 Mt grading 9.18% titanium dioxide and 0.44% vanadium pentoxide, which support a 15-year mine life. Realized vanadium price is pegged at US$48.71 per kilogram.
The operation — which will have a plant feed rate of 2.66 million tonnes per annum — requires an initial capital expenditure of A$692 million, including a 14.3% provision for contingency. Sustaining capex is pegged at A$123 million.
Average vanadium pentoxide flake production is targeted at 9,235 tonnes per annum, with average ferrovanadium output projected at 6,337 tonnes per annum. Cash operating cost over the mine's life is pegged at US$26.27 per kilogram of vanadium in ferrovanadium.
Yearly EBITDA for the operation is assessed at A$172 million.
The Australia-listed explorer said it will advance vanadium off-take discussions following the completion of a NI 43-101-compliant report within the current quarter. In addition, Neometals is evaluating potential financing strategies for the operation, with the aim to minimize dilution for existing shareholders.
Further, Neometals is evaluating the possibility of generating a salable titanium product, through testwork using mineralization gathered from a reverse circulation drilling program that will be undertaken over an approximately six-month period.
In February, Neometals suspended the proposed spin-off of the Barrambie project to fully review the impact on its demerger structure, and its timing, following the sale of its 13.8% stake in the Mount Marion lithium mine.