Verdant Minerals Ltd.'s feasibility study for its Ammaroo phosphate project in Australia's Northern Territory pegged a net nominal ungeared project net present value, discounted at 10%, of A$344 million, and an 18.1% internal rate of return.
The two-stage project is estimated to produce 1 million tonnes per annum of phosphate rock concentrate from the first stage, covering year one to five of the initial 20-year life of mine.
Construction of the first stage will cost A$368 million and take about 15 months to complete. The average EBITDA for stage one is expected at A$74 million.
During the second stage, including year six to 20 of operations, it will produce 2 million tonnes per annum of rock concentrate. Installation of the second stage will cost an additional A$200 million.
EBITDA during the second stage of the wholly owned project is expected at A$166 million.
Total revenue from the project is pegged at A$8.63 billion, while operating costs during the mine life are estimated at A$4.34 billion.
A proven and probable ore reserve of 32.5 million tonnes at 18.2% phosphorus pentoxide has been estimated, which will support production for the first 9.5 years of the mine life.
The company noted that the project will use only about 8% of the known Ammaroo resource during the initial 20 years, and the mine life can be extended by using the inferred resource at Ammaroo South or the exploration potential of the Rockhole prospect.
"The project has the potential to operate for many decades beyond the initial 20-year mine plan," Verdant said.
The company expects a final investment decision towards the end of the fourth quarter and construction to start in early 2019.
In mid-March, Verdant signed a nonbinding memorandum of understanding with Wilson International Trading Ltd. for the off-take of up to 350,000 tonnes per year of phosphate rock concentrate or other phosphate products from the Ammaroo project.