HomeBattery metalsBase Resources' DFS2 boosts Toliara metrics

Base Resources’ DFS2 boosts Toliara metrics

Base Resources has released the outcomes of its enhanced Definitive Feasibility Study (DFS2) for its Toliara Project in Madagascar.

The increased scale of DFS2 (from the 2019 DFS1) has delivered a substantial improvement in the forecast financial returns for the Toliara Project, including a post tax/pre-debt (real) NPV10 of US$1.0 billion and an average revenue to cost of sales ratio of 3.5, over an initial 38-year mine life.

Executive Director Operations and Development of Base Resources, Colin Bwye, said:

“The true size and value of the Ranobe mineral sands deposit is only just beginning to reveal itself, as evidenced by the significant increase in the Ranobe Mineral Resources and Ore Reserves estimates, with more expected to come once we can complete the mineralogy work required to incorporate the lower sandy unit which holds great potential.

“Encouraged by this, and the expected future supply deficit in mineral sands markets, we have taken the opportunity to scale up the Toliara Project in DFS2.”

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“The scaled-up project now supports average annual production of 960kt of ilmenite, 66kt of zircon and 8kt of rutile, with the first 10 years of stage 2 operations materially higher at 1.2Mt of ilmenite and 82kt of zircon.”

“In addition, since the release of the 2019 DFS, significant effort has gone into optimising the mine plans and increasing the level of project engineering, as well as engaging with preferred suppliers to improve scope definition, giving greater confidence in the capital cost estimates and allowing a reduction in associated contingencies. While the initial stage 1 capital cost estimate has increased by US$78 million to US$520 million, primarily driven by sector-wide cost escalation for capital development, the economics of the project have been substantially enhanced.”

Managing Director of Base Resources, Tim Carstens, said:

“We are pleased to share the outcomes of our enhanced DFS2 which reaffirms our view that the Toliara Project is a world class mineral sands development opportunity.”

“While capital costs have increased, the subsequent expansion in production has materially improved the financial performance of the project, with a 55% lift in forecast NPV and free cash flow generated of almost US$6 billion over the life of the project. Importantly, and despite the increased development costs, the capital payback period is still only 4.5 years”

“We have always firmly believed in the Toliara Project’s potential to be a catalyst for growth in Madagascar, creating transformational opportunities for our communities, economic stimulus for the Toliara region and a flagship foreign investment for the government. The increased scale of DFS2 enhances these opportunities for all stakeholders with the project now forecast to generate almost US$2.0 billion in direct government revenue and community development expenditure over the 38-year mine life.”