Base Resources Ltd.'s definitive feasibility study for its Toliara heavy mineral sands project in Madagascar outlined a posttax net present value, discounted at 10%, of US$652 million, a 21.4% internal rate of return and a 4.25-year payback period.

A pre-feasibility study in March outlined a posttax net present value, discounted at 10%, of US$671 million, a 22.4% internal rate of return and a four-year payback period.

The company will focus on concluding off-take and funding arrangements ahead of a final investment decision planned for September 2020, Managing Director Tim Carstens said Dec. 12.

First-stage capital expenditure to build a 13 million-tonne-per-annum processing operation over 26 months will be US$442 million. An upgrade to a 19-mtpa operation after four years of initial production is estimated to cost another US$69 million.

Operating costs were estimated at US$76.9 million per annum, including a 2% government royalty.

Estimated production is 780,000 tonnes of ilmenite, 53,000 tonnes of zircon and 7,000 tonnes of rutile annually over a 33-year mine life, excluding the first and last partial operating years.

Average annual revenue is estimated at US$248.2 million, with EBITDA of US$164.3 million per annum.