Project Update Report
Following on from release of the February 2019 Definitive Feasibility Study Arafura continued to work on the Nolans project to optimise the outcomes, finalise the design based on the FEED engineering and update the costs to ready the Project for Final Investment Decision. This work included:
- Further beneficiation test work to investigate the performance of various geological types followed by an update to the geometallurgical model.
- Re-optimisation of the mine design, updated mine scheduling and re-estimation of the Ore Reserves.
- Finalisation of the extensive 4-year metallurgical pilot program which resulted in various updates and optimisations of the process flowsheet along with ongoing test work to provide detailed information for equipment design.
- Updating of the Project capital cost estimate, operating cost estimate and financial outcomes to provide the most up-to-date information on which to finalise Project funding.
Ore Reserve Update
Following the DFS it was identified that geological certain material types had been excluded from the Ore Reserves due to a high level of uncertainty around the metallurgical performance of these materials in the beneficiation process. Additional variability flotation test work was carried out allowing this material to be bought into the production plan.
This resulted in updating of the Ore Reserves in March 2020.
MINERAL RESOURCES FOR THE NOLANS PROJECT AS AT 16 MARCH 2020
|RESOURCES||TONNES million||RARE EARTHS TREO %||PHOSPHATE P2O5 %||NdPr enrichment %|
Numbers may not compute due to rounding. “NdPr enrichment” is the proportion of TREO comprising Nd2O3 and Pr6O11.
Following the completion of the metallurgical pilot program and the update Ore Reserves various changes were made to the process flowsheet, including:
- Additional stage in the rare earth hydroxide dissolution circuit to reduce operational risk
- Addition of a cerium processing circuit to treat the cerium hydroxide to recycle NdPr that would have been lost
- Change to nano-filtration from ion-exchange for rejection of impurities in the phosphoric acid product
- Changes to various filtration equipment across the flowsheet following piloting
- Change of reagents for precipitation of final rare earth products
- Increased concentrate processing capacity to meet the mine scheduling outcomes
- Deferral of final cerium precipitation and product handling circuits
- Updating of equipment sizing and selection based on the metallurgical pilot program
The updated process flow is shown below:
Project Update Results
A Summary Report for the Project update is available via the link above.
The update confirmed the robust financial outcomes from the Project over its 38-year life of mine. The financial outcomes for the Project are outlined below.
KEY PROJECT INFORMATION
|MINING AND PRODUCTION|
|Mine Life (years)||38|
|NdPr Oxide (tpa)||4,440|
|SEG/HRE Oxide (tpa)||474|
|Phosphoric Acid (tpa 54% P2O5 MGA)||144,393|
|US$/kg NdPr Oxide price – offtake period||125.50|
|US$/kg NdPr Oxide price – LOM||130.10|
|Pre-production Capital ($m)||995||1,394|
|Rare Earth Sales Revenue ($m/annum)||587||822|
|Phosphoric Acid Sales Revenue ($m/annum)||65||91|
|Mining Costs ($m/annum)||(31)||(44)|
|Processing Costs ($m/annum)||(138)||(193)|
|General and Administration Costs ($m/annum)||(26)||(36)|
|Operating Cost $/kg NdPr||43.95||61.60|
|Operating Cost $/kg NdPr net of P2O5 credit||34.64||48.52|
|NPV8 after tax ($m)||1,693||2,358|
|IRR after tax (%)||19.3||19.3|
Note: Numbers may not compute because of rounding. Product prices during the offtake period refer to the first seven years of production when offtake agreements will include discounts and other contract mechanisms put in place to underpin project finance for up to approximately 85% of NdPr oxide production with averages calculated as the weighted average over the specified period. Average revenue, costs and EBITDA are calculated as the arithmetic annual average following the anticipated two year ramp up period and excluding the final years of production from low grade stockpiles.