PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Panda Hill niobium project, in Tanzania, has estimated that the project would require a capital investment of $158-million to develop.
ASX-listed Cradle Resources reported on Tuesday that the base case study was centred around an openpit mine delivering two-million tonnes a year of feed, producing 4 600 t/y of ferroniobium, over 30 years.
Over the first ten years, the project was expected to deliver an average grade of 0.68% niobium, lowering to 0.54% for the life-of-mine (LoM) average.
With a pay-back period of one-and-a-half years, the project was expected to have a net present value of $470-million and an internal rate of return of 56%. During the first ten years of operation, the project would deliver earnings before interest, taxes, depreciation and amortisation of $133-million a year, which would decline to $103-million a year over the LoM average.
Cash costs for the first ten years of operations have been estimated at $55.64/t, while the LoM cash costs have been estimated at $50.47/t.
“We are very pleased with the results of the PFS, which demonstrates a highly economic, world-class project. The PFS substantially de-risks the project following on from excellent results achieved with the resource drilling and the metallurgical testwork last year,” said Cradle MD Grant Davey.
Davey said that the company had focused the study on a higher-grade mining schedule that would deliver optimal cash flow early in the project.
“With the definitive feasibility study (DFS) already under way, and an updated mineral resource due out shortly, we are well advanced in ensuring that Panda Hill will be the next niobium producer.”
Results from the updated mineral resource were expected within the second quarter of this year.
The DFS would consider the option of staging production in such a way that in the early years, a more capital efficient mining operation could be built that would target 5 000 t/y of ferroniobium. The plant would then be expanded in subsequent years to achieve an increased production profile to meet the growing ferroniobium market.