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American Pacific ups Fort Cady value to US$1.25B; construction to start in Q4'19

American Pacific Borate & Lithium Ltd. said Dec. 17 that it intends to begin construction at the Fort Cady borate project in California in the fourth quarter of 2019, following a positive definitive feasibility study for the operation.

The study, which incorporated a third phase of operations, outlined a posttax, unlevered net present value, discounted at 10%, of US$1.25 billion, an internal rate of return of 41% and a 21-year life.

In comparison, a scoping study released in December 2017 pegged a posttax, unlevered NPV, discounted at 10%, of US$687.9 million with a 39% IRR and a 25-year mine life.

Under the definitive study, the target output in phase-one operations is slated at 82,000 tonnes per annum of boric acid and 36,000 tpa of sulfate of potash, or SOP. Phase-two production is expected at 245,000 tpa boric acid and 73,000 tpa SOP, and phase-three output is expected at 408,000 tpa boric acid and 109,000 tpa SOP.

The company projected capital expenditures at US$138.2 million in phase one, US$191.4 million in phase two and US$186.5 million in phase three, for total capex of US$516.2 million.

C1 operating costs without byproduct credits are pegged at US$367.34 per tonne, and C1 operating costs with byproduct credits were projected at US$148.84/t.

EBITDA in the first full year of operation is targeted at US$321 million.

The underground operation is supported by proven and probable reserves of 41 million tonnes grading 6.6% boron trioxide for 4.81 million tonnes of contained boric acid.

Prior to starting construction of the phase-one operation, the Australia-listed explorer said it will begin detailed engineering work, advance discussions to secure financing and obtain permits for required work programs to draw down construction finance.