Highlights
- US$2,348 M1 pre-tax NPV10 and US$1,028 M1 post-tax NPV10
- Internal Rate of Return of 53% (pre-tax)1 and 33% (post-tax)1
- Net Profit After Tax – Life of Mine of US$3,779 M1
- Payback period of 1.50 years (pre-tax) and 2.25 years (post-tax)
- The Ore Reserves contains 44.6 Mt of Proved Category and 48.5 Mt of Probable category Ore Reserves
- Life of Mine beyond 20 years based on a 4.5 Mt/a operation under pinned by the Ore Reserves
- Conventional open pit mining with low ore waste strip ratio of 1:0.48
- LOM lithia recoveries of 60% using only conventional DMS
- CAPEX of US$545.5 M includes a contingency of US$49.59 M (10%)
- US$380 M average annual EBITDA for LOM
- Two transport routes solution at US$229 per tonne2 cost to Lobito port and US$275 per tonne2 cost to Dar es Salaam port
- 20-year mine life producing 700,000 tonnes per annum high grade of SC6 lithium3 and 45,375 tonnes per annum of Primary Lithium Sulphate
- Pre-production capital expenditure of US$545.5 M includes transport upgrade and rehabilitation of the Mpiana Mwanga Hydroelectric Power Plant
- Initial project development works already advancing including construction of the initial camp Colline
AVZ Minerals Limited (ASX:AVZ, “the Company”) announces completion of its Definitive Feasibility Study (“DFS”) for the Manono Lithium and Tin Project (“Manono Project”) located in the Democratic Republic of Congo.
The DFS results confirm outstanding project metrics and provide a higher level of confidence4 with respect to engineering design, construction requirements, logistics, project finance and risk assessments.
The DFS indicates the project to be robust and viable with a product mix of Spodumene Concentrate (SC6) for 700,000 t/a and Primary Lithium Sulphate (PLS) for 46,000 t/a. PLS will be produced using 153,000 t/a of the SC6 product as feedstock.
The processing flow sheet also allows for the recovery of tin and tantalum from hard rock ore as well as smaller amounts of alluvial tin and tantalum secured from local artisanal miners.
The most cost-effective transport routes have been defined, thoroughly investigated and priced to meet the export requirements of the project. The thorough investigation has provided two suitable alternatives for transport of the products to port for export.
AVZ Managing Director, Mr Nigel Ferguson, said: “It is a pleasure to have completed the DFS and be able to present the DFS financials to our shareholders.”
“The DFS proves the Manono Lithium and Tin Project to be a very robust project with strong financial metrics, demonstrated by the key metrics of the DFS base case scenario on a 100% ownership basis.
“The Manono Project has a substantial ore body capable of extending the Life of Mine well past the current 20 years, as modelled. It also has a robust workable transport solution for securing delivery of products to the export ports and a clear plan to work with the community for social development and environmental compliance.”
“We have intentionally been conservative in our interpretations of financial impacts on the project and therefore believe these numbers can be improved in the future, despite having included significant, non-project infrastructure items such as rehabilitation of roads, the Mpiana Mwanga Hydroelectric power plant and taken an adverse opinion on any potential VAT refund, amounting to some US$658M over the Life of Mine, which has been totally excluded from the cash flow.”
“The Manono Project economics are enhanced by addition of the high value-added Primary Lithium Sulphate product. The project is also highly sensitive to market pricing of SC6. Roskill has stated its 20-year price forecast sees an increase in unit value as demand increases and as such, the project becomes incrementally more robust and profitable.”
“Further upside potential for the Manono Project comes in the nature of significant upside resource potential from Carriere de L’Este, added cash flow from tin and tantalum credits, additional negotiations on a reduction in pricing for transport, the roll out of electric powered mining equipment and the establishment of the Special Economic Zone at Manono, which will potentially provide discounted rates on tax, duties, VAT and further significant benefits for the project.”
“All these aspects support a highly positive outlook for the Manono Project and I look forward to updating the market soon with respect to offtake agreements, financing and a decision to mine.”
SOURCE: AVZ Minerals
DATE: APRIL 21, 2020