PERTH (miningweekly.com) – A prefeasibility study (PFS) at ASX-listed Consolidated Tin Mines' Mount Garnet project, in Queensland, has demonstrated robust economics, supporting the progression to a definitive feasibility study (DFS).

The PFS found that with a capital spend of A$76-million, the Mount Garnet project could be an one-million-tonne-a-year opencut operation, producing 2 944 t/y of tin in concentrate.

The project, which was expected to have a minimum mine life of nine years, would generate an yearly revenue of around A$127.4-million, with production costs estimated at A$91.94/t.

The Mount Garnet project was estimated to have a net present value of A$184.1-million before tax, and an internal rate of return of 111% after tax.

“The study demonstrates the economics of a robust and significant tin project. Unlike other projects, Mount Garnet boasts existing infrastructure and near-surface ore, which are the drivers of low capital and operating costs,” said Consolidated Tin chairperson and MD Ralph de Lacey.

“The PFS has confirmed that we have the opportunity to develop a substantial and profitable tin mining project.”

De Lacey noted that another important outcome of the PFS was the identification of a number of opportunities to improve the financial aspect of the project with further design optimisation of the mining and processing stages, adding that these opportunities would be realised through the DFS process.

“The board has approved the initiation of the definitive feasibility study for the Mount Garnet tin project, starting with the Gillian prospect, with further evaluation work to follow at Pinnacles and later at Windemere. It is anticipated that Gillian will provide the mill feed for the first three years of mining,” he added.

De Lacey also noted that discussions were well advanced with Consolidated Tin’s major shareholder, Snow Peak, to finalise a binding agreement to ensure that the full asset value was realised, and with the aim of achieving first tin production by the end of 2014.