DFS confirms Pilgangoora as ‘significant opportunity’ – Altura

JOHANNESBURG (miningweekly.com) – The Pilgangoora lithium project in the west Pilbara region of Western Australia is a “significant mining opportunity” and is likely to be the next producing Australian lithium mine, developer Altura Mining said on Monday.

Announcing the “strong outcomes” of the definitive feasibility study (DFS) results, the company reported that the Pilgangoora project would be based on a yearly ore feed rate of 1.54-million tonnes to deliver 219 000 t/y spodumene concentrate containing 6% lithium, with estimated life-of-mine cash costs of A$316/t of spodumene concentrate.

The April 2016 feasibility study is based on yearly production of 1.40-million tonnes of ore and 215 000 t/y of spodumene concentrate.

Altura said it considered the planned production rate of 219 000 t/y a “sensible entry point” to the spodumene market, which it believed was undersupplied.

The latest cash flow modelling shows that the Pilgangoora project will have a net present value (NPV) of A$411-million, generating earnings before interest, taxes, depreciation and amortisation of about A$1.06-billion over a 13-year mine life. The internal rate of return (IRR) is 58.1%.

The feasibility study delivered an NPV of A$382-million and an IRR of 59.5%.

The project will cost A$139.7-million to construct the Pilgangoora project and will have a repayment period of 1.8 years.

With a completed DFS, the required native title agreement and mining lease in hand, Altura said it was well positioned to secure the funding required to start production construction.

“Given the attractive returns expected from Pilgangoora, Altura anticipates strong interest from financiers who would also be gaining exposure to a project which has a short timeframe to first shipment of lithium product and which is likely to be Australia’s next producing lithium mine.”

The company said it would examine the full spectrum of financing options.