Aspire Mining Ltd.'s draft feasibility study for the 547.7-kilometer Erdenet-to-Ovoot rail project in Mongolia estimated an equity net present value, discounted at 8%, of US$276 million and a 13.6% equity internal rate of return after taxes.
The feasibility study achieved an 11% cut in the total construction cost over the January 2017 study, the company said June 4.
The latest study, completed by Aspire unit Northern Railways LLC, estimated a total construction cost of 8.81 billion Chinese yuan, including a 10% contingency.
The construction cost in terms of U.S. dollars remain the same at US$1.25 billion as the reduction in yuan is offset by a lower dollar-to-yuan exchange rate, the company added.
The project has a design capacity to meet forecast freight demand of up to 16 million tonnes per annum and capacity can be added for a maximum of 30 mtpa.
Coal from the Ovoot and Nuurstei projects in Mongolia will make up over 10 mtpa of the forecast demand.
The study assumes a construction period of four years for the project.
The company will forward the feasibility study to the Mongolian Ministry of Roads and Transportation for approval.
As of June 1, US$1 was equivalent to 6.42 Chinese yuan.
