The results of a recently concluded Definitive Feasibility Study (DFS) at ASX-listed Base Resources’ Toliara project in Madagascar reinforces the project's status as a world class mineral sands development.

Madagascar – According to Base Resources, the DFS outcomes closely align with the Pre‐Feasibility Study (PFS) outcomes released in March 2019 and confirm a post‐tax/pre‐debt (real) NPV10 of US$652 million and an average revenue to cost ratio of 3.15 over the initial 33‐year mine life.

Highlights of the DFS include:

  • Average revenue to cost of sales ratio of 3.15;
  • Stage 1 capex cost of $442 million to establish a 13Mtpa mining processing operation;
  • Stage 2 capex cost of $69 million to increase the operation to 19Mtpa;
  • Ore reserves estimate of 586Mt @ 6.50% HM for an initial LOM of 33 years;
  • Mineral separation plant recoveries of 94.6% ilmenite, 79.4% zircon and 58.4% rutile;
  • Revenue of $248.2 million: 65% ilmenite, 32% zircon and 3% rutile
  • Operating costs of $71.9 million or $76.9 million including 2% Government royalty;
  • Non‐operating costs of $7.1 million (community, external affairs, marketing etc.); and
  • EBITDA of US$164.3 million, NPAT $110.2 million.

Read: Putting minerals sands in Madagascar on the map

Executive director: operations and development of Base Resources, Colin Bwye, added: ““We are very pleased that the DFS has re‐confirmed our view that the Toliara project is a world class mineral sands development opportunity. In the first 26 years of full production, Toliara is expected to produce an average of 814kt of ilmenite, 55kt of zircon and 7kt of rutile annually, over a period when a global supply deficit of titanium dioxide feedstocks and zircon is expected.

“This production profile, combined with a highly competitive revenue to cost of sales ratio, will generate estimated average annual free cash flows of $140.2 million over these years.”