Platina Scandium Project, New South Wales (PGM: 100%)
December 2018 Definitive Feasibility Study Highlights
The DFS has confirmed the technical and financial viability of constructing a simple, low-strip ratio, open-cut mining operation and processing facility producing scandium oxide. The positive DFS demonstrates the opportunity to create substantial long-term sustainable shareholder value at a manageable capital cost. Key highlights of the DFS include:
- Robust financials – The DFS demonstrates a very robust financial case. Based on a mine life of 30- years, the project generates an after-tax net present value in real terms (8% discount rate) of USD 166 million (AUD 234 million), post-tax IRR of 29% and payback period of 5.3 years. The financial model incorporates an average scandium oxide price of USD 1550 /kg over the life of the project. Based on market research and discussions with end-users, the Company believes this is the price necessary to drive wider-scale adoption of scandium in alloys;
- Low capital expenditure – The DFS is based on a processing plant designed to initially produce 20 t/y of scandium oxide at a capital cost of USD 48.1 million (AUD 67.8 million), expandable to 40 t/y of scandium oxide for a very low incremental capital cost of USD 11.7 million (AUD 15.6 million), as market demand for lightweight aluminium-scandium grows;
- High-grade, large resource base – The strength of the PSP is the very large and high-grade scandium resources, which are amenable to simple, low-cost, open-cut mining techniques at a low waste to ore ratio (1.9:1). The DFS assumes that 33% of the available Ore Reserves are mined over 30 years, and additional Ore Reserves and Mineral Resources could provide for decades of additional production or further production expansion;
- Conventional, well tested process route – Ore mined at Red Heart will be processed through a conventional high pressure acid leach circuit (“HPAL”) to produce 99.99% high-purity scandium oxide. The process methodology has been extremely well tested through bench and pilot scale test work to confirm operating and capital estimates for the DFS;
- Access to infrastructure – The processing facility will utilise an existing industrial site in Condobolin. This unique site provides access to existing infrastructure – labour, water, power, rail, and sealed roads – which results in lower capital costs, and simplifies the permitting and approvals process;
- Potential for other revenue streams – Like other laterite projects using the HPAL process route, once all the minerals are in solution from the HPAL process, recovery is achievable at relatively low incremental cost, thus providing a potential future opportunity to generate cobalt, nickel, platinum and aluminium products (to make high purity alumina) and generate additional cash flow; and
- Significant community benefit – The Company is very committed to delivering the PSP in an environmentally and socially responsible manner. The significant investment will provide jobs, training and contracts for the local communities.
Table 1 – Platina Scandium Project – Key Project Parameters
*Includes sustaining capital costs. # Mining, processing, general and administration costs. Excludes royalties
The Company is now focused on completing the Environmental Impact Assessment, Mining Licence Application, Development Applications (mine and process plant), securing offtake and project financing.
Platina Scandium Project Overview
The PSP Mineral Resource and Red Heart Mine Site are located in central New South Wales, approximately 53 kilometres north-east of Condobolin and 11 kilometres south-west of Tullamore.
The processing plant will be constructed approximately 5 kilometres north-west of the township of Condobolin at the Condobolin Plant Site, 70 kilometres by public road south-west of the Mine Site.
Central New South Wales is a well-established mining district with a number of world-class mining projects in operation including Cadia, Lake Cowal and North Parkes. The district is also becoming an important source of technology metals including scandium, cobalt, nickel and high-purity alumina.
The Red Heart deposit is located within Exploration Licence EL7644 which is 100% owned by Platina Resources Limited and was granted on the 2 December 2010. Renewal has been offered for a further term of 5 years expiring in 2020. The licence is in good standing with the New South Wales Mines Department. The Company plans to lodge a Mining Lease Application covering the Red Heart Mine Site before the end of 2018. The licence measures approximately 9.3 km north-south and 7.8 km east-west.
Mineral royalties are payable to the New South Wales Government at 4% of sales (less allowable deductions).