PERTH (miningweekly.com) – An optimisation of the prefeasibility study (PFS) for the Mardie salt and potash project, in Western Australia, has improved the project economics, with a definitive feasibility study (DFS) now targeted for late 2019.

ASX-listed BCI Minerals on Friday reported that the optimised PFS estimated a pre-tax net present value of A$560-million, which compared with the A$335-million estimated in the 2018 PFS, while the internal rate of return has remained unchanged at 20%.

The expected yearly earnings before interest, taxes, depreciation and amortisation have increased from the more than A$100-million estimated in the original PFS to about A$155-million.

BCI told shareholders that the key changes to the development case for the Mardi project included increasing salt production from 3.5-million tonnes to four-million tonnes, while sulphate of potash (SoP) production increased from 75 000 t/y to 100 000 t/y.

Furthermore, the salt and SoP produced at Mardie will now be exported through a port at Mardie, eliminating all road haulage costs, while the operating life of the project have doubled from 30 to 60 years.

Capital costs for the project have increased from A$335-million to A$498-million, allowing for the increase in production and the development of a port at Mardie.

“The recent approval by the Minister for Ports for an export facility at the Mardie project site and the PFS flowsheet optimsiation work resulting in higher production targets, support import amendments to our DFS scope,” said BCI MD Alwyn Vorster.

“The PFS optimisation study has shown these amendments will deliver lower operating costs and improve the overall project economics.

“With salt, Mardie is expected to be cost competitive with existing large Western Australian salt operations owned by major companies. Given SoP is a by-product of salt production and its location to the coast, Mardie should logically have an SoP on-ship cost of A$50/t to A$100/t, lower than any other Western Australian SoP projects that are located 800 km to 1 000 km from their preferred port.”

With the DFS for Mardie now under way, BCI is working on securing all the required development approvals with the aim of making a final investment decision on the project by the March quarter of 2020.

Shares in the company rose 2.5% to A$0.20 each on Friday.