Name of the Project
Dubbo zirconium/niobium/hafnium and rare earths project.

Location
The project is located 25 km south of Dubbo, in central western New South Wales, Australia.

Client
Alkane Resources.

Project Description
The Dubbo project is a large inground polymetallic resource of zirconium, hafnium, niobium, tantalum, yttrium and rare-earth elements. It has an 18.9-million-tonne mineral ore reserve and a 75.18-million-tonne mineral ore resource.

An engineering and financials review of the project has confirmed the project as technically sound and financially viable.

At full capacity, the Dubbo project mineral processing plant will be capable of receiving one-million tonnes a year of crushed ore, which will be processed using sulphuric acid leach and solvent-extraction recovery to recover zirconium, hafnium, niobium and rare-earth products.

The project could be successfully implemented as a single one-million-tonne-a-year plant (base case) or in two stages of 500 000 t/y (staged build).

The staged build concept is centred around phased construction, and the development of a ‘repeatable’ reduced capacity train that can be replicated to expand plant capacity. To the greatest extent possible, each successive train is a copy of the initial plant. The main aim of this staged construction strategy is the reduction of initial capital cost, bringing the project into production with a lower initial commitment. Later expansion becomes a matter of reproducing the initial train as needed, opening a pathway to rapid development and expansion to one-million-tonne-a-year capacity (and potentially beyond), with relative speed and without substantial re-engineering

Mining of the ore deposit will be undertaken in an openpit using drill-and-blast methods to fragment material that will be transported to the run-of-mine pad for crushing and grinding. About 19-million tonnes a year of ore will be extracted at a rate of one-million tonnes a year.

The project has a 20-year mine life at a one-million-tonne-a-year feed rate.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
In the base case, the project has an estimated pretax net present value (NPV), at an 8% discount rate, of A$1.24-billion and an estimated internal rate of return (IRR) of 17.5%.

In the staged build, the project has an NPV, at an 8% discount rate of A$909-million and an IRR of 16.1%.

Value
The project will cost about A$1.3-billion in the base case scenario. In the staged build, Stage 1 is estimated at A$808-million and Stage 2 A$692-million.

Duration
Not stated.

Latest Developments
Alkane Resources has told shareholders that it is in no hurry to develop the Dubbo project.

Company chairperson Ian Gandel has said that while electric vehicle production and sales are growing steadily, meaning manufacturers are under pressure to source sufficient volumes of critical minerals, manufacturers are expecting new entrants into the supply market to supply at a substantial discount to established Chinese domestic producers.

“Your company is well positioned, with a low-risk, permitted and development-ready project, and it is not appropriate to bind our company to an inferior pricing position for many years nor is it in Australia’s national interest,” he has said

Alkane believes that market dynamics will change in the near term, with market conditions for the Dubbo material continuing to tighten.

Foreign policy decisions, such as the US’ commitment to pursue the development of high-performance metals, as well as legislation that discouraged the US Department of Defense’s use of rare-earth magnets from China, all helped to tighten the supply market.

Further, China’s Made in China 2025 policy is also expected to reduce access to, and increase the prices of rare-earth products sourced from China, while the tariffs on Chinese goods imposed by the US, and the escalation in the trade tensions between these two nations, are expected to lead companies to seek alternative suppliers.

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 or email mail@alkane.com.au.