Name and Location
Dubbo zirconia project (DZP), New South Wales, Australia.

Client
Alkane Resources.

Project Description
The DZP is a development project based on one of the world’s largest in-ground resources of rare metals and rare earths.

A variety of rare-earth and metal concentrates will be produced, including zirconium, niobium, hafnium, tantalum, yttrium, europium, dysprosium and neodymium.

The DZP is expected to mine 19.5-million tonnes of ore over 20 years, producing 75 000 t/y of concentrate.

The project includes:
• a small opencut mine;
• processing and refining facilities, a plant and equipment, including a 90-m-high stack;
• chemical storage areas, including a tank farm;
• waste encapsulation cells;
• water and gas supply pipelines;
• road upgrades; and
• the potential reopening of the adjoining railway line.

While the project is proposed to operate for 20 years at the proposed extraction rate, the ore deposit will not be exhausted over this period. Consequently, there is potential for additional mining in future.

Net Present Value/Internal Rate of Return
Not stated.

Value
The economics of the project were adjusted following the completion of the front-end engineering design (Feed) in August 2015. The Feed resulted in a capital expenditure adjustment, from the A$1-billion estimated in the 2013 definitive feasibility study to A$1.3-billion, based on a higher Australian/US dollar exchange rate.

Duration
Not stated.

Latest Developments
Alkane has revealed plans to raise about A$16-million to progress the development of its Dubbo zirconia project.

The company has indicated that it will undertake a pro-rata traditional nonrenounceable entitlement offer, offering one new share for every five existing shares held at an issue price of 20c a share.

The offer price represents a 7.8% discount to Alkane’s closing price on April 22, the last day of trading.

Shareholder approval will not be required for the placement.

The proceeds from the offer will be used to buy the remaining key parcels of land within the Dubbo project area, perform pilot plant runs and confirm front-end engineering design and other process changes to produce product samples for potential offtake customers. It will also be used for general working capital requirements.

Alkane signed a letter of intent with materials company Vietnam Rare Earth JSC (VTRE) to toll process rare-earth concentrate from Dubbo into individual rare-earth products earlier this month.

It is expected that up to 6 664 t/y of separated rare earths could be produced from the Dubbo project. Initially, however, only 2 000 t/y of the key, high-value rare earths will be shipped to VTRE for processing, with lanthanum, cerium and yttrium to be recovered from Dubbo.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Alkane Resources, tel +61 8 9227 5677, fax +61 8 9227 8178 or email info@alkane.com.au.