Cyclone DFS cuts costs
PERTH (miningweekly.com) – A definitive feasibility study (DFS) into the Cyclone zircon project, in Western Australia, has slashed the development capital from the A$161-million estimated in 2016, to A$135.7-million.
ASX-listed Diatreme on Thursday reported that Cyclone is expected to have a life-of-mine production of 1.94-million tonnes of heavy mineral concentrate, containing 936 000 t of zircon, producing 772 000 t of zircon final product, delivering an average of 58 790 t/y over a 13-year mine life.
The DFS estimated an after-tax net present value of A$113-million, an internal rate of return of 27%, and a capital pay-back period of 2.7 years. The project is expected to deliver average annual revenues of some A$130-million, with operating expenditures estimated at A$75.5-million a year.
Diatreme chairperson Gregory Starr told shareholders that the DFS results confirmed Cyclone’s economics were sound and that the project was capable of attracting the necessary investment.
“In a market where zircon is entering a period of constrained supply, the development opportunity for Diatreme is immediately apparent. Diatreme will now seek to unlock the project’s value for shareholders through its further development,” Starr said.
Diatreme is hoping to secure a development partner by mid-2019.
The company is also in the midst of offtake discussions with a number of heavy mineral concentrate processing companies in China, and will now seek to formalize these discussions through a memorandum of understanding.
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