FYI Resources Limited: Outstanding PFS results support HPA development
(firmenpresse) - Outstanding PFS results support HPA development
High purity alumina developer FYI Resources Limited (ASX: FYI) (FYI or the Company) is pleased to announce the successful completion of its Preliminary Feasibility Study (PFS) for its 100%-owned Cadoux Kaolin Project (the Project), in Western Australia. The PFS has confirmed the Companys intention to become a vertically-integrated, long life producer of high quality, sought after high purity alumina (HPA).
The PFS indicates that the Project could produce up to 8,000 tonnes per annum of HPA with both low capital and operating costs, delivering an NPV(10%) of US$506 million for a 25 year project life from >50-year kaolin supply at an attractive IRR of 46%.
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The PFS economic forecasts are based on a revised Cadoux Mineral Resource Estimate that was specifically estimated for the delivery of premium quality feedstock to the integrated HPA refining process. The financial modelling is based on a Mineral Resource including 94% Indicated and 6% Inferred material. The revised MRE is detailed in section 7 of the attached PFS.
The PFS demonstrates the economics of the Cadoux Project through key metrics including:
- Integrated beneficiation and refining project targeting production of 8,000 tonnes per year of HPA, with processing of Cadoux feedstock to be completed at the proposed new battery metals centre in Kwinana, where kaolin will be directly refined into high purity alumina, all in Western Australia.
- After-tax NPV(10%) US$506 million, IRR of 46%, payback period of 3.6 years
- Steady state EBITDA of US$128 million annually with average annual after-tax cash flow of US$90.7 million
- A capital intensity of US$22,344/t capacity installed
- PFS modelled on a 25 year project life modelled off a combined Mineral Resource of 9.6Mt (at) 23% Al2O3, 0.8% Fe2O3, 1.2% K2O, based on 94% Indicated and 6% Inferred (refer to section 14 of the detailed PFS report).
- Competitively positioned total project capex of US$179 million (including Owners costs and XX% contingency)
- HPA operating costs of US$6,467/t
- Production profile designed to meet the forecast industry demand growth of ~ 17% CAGR
- Sale price assumption of US$24,000 per tonne delivering an operating margin of ~US$17,500 per tonne
- Proposed to be in construction by Q4 CY2019, with a construction period of 18 months
- Exceptional metallurgical test work with a low risk flow sheet and conventional technology selected for beneficiation
- Upside opportunities include potential to produce 5N which should receive a premium to 4N price and the addition of High Purity Quartz (HPQ) by-product production which may improve project economics for limited additional capital.
- With regards to the future funding of the Project, the Company is in discussions with industry participants with potential to provide financing as part of an offtake, in addition to traditional means of debt and equity financing
- The Company plans to initiate a Bankable Feasibility Study (BFS) whilst progressing negotiations with industry participants for potential offtake as a part of de-risking its production profile. The Company should benefit from a number of activities already completed during the PFS including a more detailed Mining Study, Environmental and Permitting commenced, potential resource upgrade, initial HPQ studies
FYI Resources Managing Director, Mr Roland Hill, commented: The PFS demonstrates FYI Resources is in the attractive position with the potential of becoming a long-life, low cost and high margin HPA producer. The positive economics are a result of realistic basket pricing and a production profile that is expected to meet the forecasted industry demand growth over the coming years as a result of the EV revolution. Importantly, we believe we should sit within the lowest operating cost quartile generating significant margins, demonstrated in the average annual EBITDA at steady state of US$128m.
On the back of our recent marketing trips to Japan, China and Korea, we now look forward to advancing discussions with industry players for potential offtake and financing and progressing the project towards the completion of a BFS [in the first half of 2019] for which we are fully funded.
FYI Resources - High Purity Alumina Summary
Cadoux is a high grade kaolin resource that will provide an initial supply of up to >50 years of HPA production, in the first phase of operations, of feedstock material to a proposed Kwinana refinery.
The headline parameters of FYIs comprehensive prefeasibility study are summarised below:
Item unit Amount
HPA production tpa 8,000 (with capacity
to
expand)
Production grade Al2O3> 99.99%
Capital cost US$m 178.8
Capital cost / t US$/t22,344
Forecast average cost of US$/t6,467
production
(C1)
Assumed HPA selling price / t US$/t24,000
Exchange rate A$:US0.75
$
Average annual EBITDA US$m 128
First phase of operations - US$m 11,376
total
revenue
(> 50 years)
First phase of operation - US$m 190
annual
revenue
Project NPV (at)10% 506
Project IRR % 46
Project payback yrs 3.6
HPA Development Strategy Objective
FYI Resources is focused on developing a vertically integrated high purity alumina (HPA) production and refining strategy utilising its 100% owned Cadoux kaolin project as a feedstock source.
The foundation of FYIs HPA strategy is the fundamental revolutionising of the traditional processing and production of alumina (sourced from bauxite) to a non-traditional processing route using aluminous clay (kaolin). The objective of this is two-fold:
1. To lower the cost of production (both Capex and Opex) to be more competitive
2. To address a rapidly growing market that current traditional production, through increasing global supply disruptions and environmental pressures, may not meet
PFS Study Overview
The completion of the Cadoux HPA project PFS outlines a high quality, long life straight forward development program for a project that demonstrates strong financials and sound business case.
The PFS is an aggregation of high quality and detailed work by specialist study managers culminating in an excellent result that demonstrates the support of developing the Cadoux HPA project.
Study Area / Discipline Study Managers /
Contributors
Geology / Resource CSA Global
Metallurgy / process engineering Independent
and metallurgical
design Operations
Process engineering and design GR Engineering Services
Mine Design / scheduling /cost Orelogy
estimates
Environmental assessment / Botanica Consulting
Baseline studies /
Heritage
Hydrological review and Baseline Hyd20
Study
Market Research CRU, Allied Market
Research,
FYI
Risk assessment CSA, GRES, Orelogy,
IMO,
FYI
Financial analysis CSA, GRES, Orelogy, FYI
HPA Business Case Summary
FYI Resources is building a strong business case around the following factors:
- A unique high grade, superior quality and characteristic kaolin orebody that is well suited to HPA refining
- Excellent geological understanding and definition of the kaolin resource
- A revised MRE to provide optimal feedstock for HPA production - providing many decades of feedstock production
- Exceptional metallurgical test work and development of flow sheet
- Outstanding process engineering design
- Strong project financials (low Opex and Capex / attractive NPV, IRR and capital intensity)
- Timing of entry into a rapidly growing market
- Realistic commodity pricing forecast
Future Value Catalysts
Based on the positive outcome of the PFS and progressing with the HPA strategy, FYI could expect a number of events that may impact the Companys valuation in a positive manner. These events include:
- Commencement of Bankable Feasibility Study (BFS)
- Instigation of metallurgical studies towards an additional revenue stream product which should have an increased positive impact to the economic case (generating increased revenues with very little capital)
- Pilot plant studies
- Strengthening marketing relationships
- Continued developments in the EV market
Environmental Credentials
FYIs HPA strategy includes the ethos of achieving and maintaining high levels of environmental standards. The Company has a culture and commitment to reducing environmental impact associated with mining activity.
Additionally, our carbon footprint and environmental impact is minimal in comparison to traditional supply of HPA sourced from Aluminium.
Please refer to the full detailed PFS report for further information.
For more information please contact:
Roland Hill
Managing Director
Tel: 0414666178
roland.hill(at)fyiresources.com.au
Simon Hinsley
Investor & Media Relations
Tel: 0401809653
simon(at)nwrcommunications.com.au
53 Canning Highway, VICTORIA PARK, WA 6100
www.fyiresources.com.au
ACN 061 289 218
Tel: +61 8 9361 3100
Fax: +61 8 9361 3184
About FYI Resources Limited
FYIs is positioning itself to be a significant producer of high purity alumina (4N or HPA) in a rapidly developing: LED, electric vehicle (EV), smartphone and television screen as well as other associated high-tech product markets.
The foundation of the HPA strategy is the superior quality aluminous clay (kaolin) deposit at Cadoux and exceptional positive response that the feedstock has to the Companys moderate temperature, atmospheric pressure HCl flowsheet. The strategys superior quality attributes combine resulting in world class HPA project potential.
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Datum: 25.09.2018 - 15:36 Uhr
Sprache: Deutsch
News-ID 581520
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