Democratic Republic of Congo – The 5 Mtpa case study provides a pre-tax, pre-royalty NPV at 10% of approximately US$2.63 billion and NPV at a 15% of US$1.63 billion (AVZ’s 60% share is US$1.54 billion and US$0.94Bn respectively). The IRR has been assessed at greater than 64%.
The independent scoping study was undertaken by CPC Project Design. In addition, an independent economic model and financial analysis was undertaken and completed by Alan Dickson & Associates. Both documents utilised measured, indicated and inferred resources as the basis for completion.
The basis for Case 2 are a throughput 5 Mtpa high grade open pit mine to supply material to a conventional crushing, high pressure grinding, dense media separation (DMS) and flotation plant, production life 20 years, price of US$750/t of concentrate at 5.8% Li2O, based on an average mill feed grade of 1.51% Li2O and metallurgical recovery of 80.9% of the Li2O. The 5 Mtpa capital costs for the processing plant and associated project infrastructure are estimated at approximately US$380 to $400 million (and includes US$78M contingency).
All costs have been assumed to occur in the period of activity and the revenue has been deferred 3 months from the time of processing on site.
AVZ Minerals MD Nigel Ferguson, said that “not only does the results of the 5 Mtpa (Case 2) study confirm the excellent quality of the Manono Project, it further underlines the expandability of the project. Management will now turn its attention to selecting the optimal throughput level in conjunction with consultants working on the DFS.”
AVZ Minerals has commenced a definitive feasibility study (DFS) on the Manono project. As well as improving the accuracy of cost estimates, the DFS will provide additional definition on the project’s infrastructure requirements such as water, power and transport.
AVZ believes there is potential to enhance the project’s economics by:
- Further optimisation of transport and logistics costings.
- Improving flowsheet design through the various feasibility test work studies.
- Investigation into the rehabilitation of the Piana Mwanga hydro facility.
- Completing further test-work on credits for tin and tantalum recovery
- Mining selectivity studies to quantify the economic impact of realising a higher plant feed grade.
The infill and exploration drilling programmes were completed at the end of 2018. These programmes were designed to:
- Infill and expand the current resource base.
- Select core to be utilised in the expanded metallurgical test-work programs.
- Further upgrade the resource classification from the maiden Resource estimate.
- Confirm initial geotechnical parameters for open pit mine planning.
- Confirm plant, associated infrastructure, waste dump and tailings storage facility locations.
The metallurgical test work is expected to take six months to complete and planned to be available by Q4, 2019. The company looks forward to updating the market regarding its progress. In parallel, the Company intends to continue engaging with potential off-takers and finance providers.