VRX Silica Ltd.'s bankable feasibility study for its Muchea silica sand project in Western Australia outlined an ungeared posttax net present value, discounted at 10%, of A$337.9 million, a 96% internal rate of return and a 2.3-year payback period.
The study is based on only 25 years of production from a potentially long-term mine life of over 100 years, the company said Oct. 18.
Capital cost for the project was estimated at A$32.8 million for a 2 million-tonne-per-annum operation. Life-of-mine C1 operating costs including royalties are expected at A$32.74 per tonne.
The project is expected to produce 48.3 million tonnes of silica during the 25-year mine life.
Total sales from the project are expected at A$3.35 billion, while cash flow is expected at A$1.12 billion.
The first nine to 10 years of the project will be supported by maiden probable ore reserve of 14.6 million tonnes at 99.9% silica contained within the area of the company's mining lease application.
From year 10, the company will mine from an inferred mineral resource of 61.4 Mt at 99.6% silica.
VRX's bankable feasibility study for its Arrowsmith Central silica sand project in September estimated a posttax net present value, discounted at 10%, of A$147.6 million, a 60% internal rate of return and a 2.8-year payback period.