ASX-listed Avenira has completed a feasibility study to expand its 80%-owned Baobab phosphate project in Senegal to a projected high-grade phosphate rock mine with a concentrate product capacity of 1 Mtpa.
The feasibility study (FS) confirms the technical and financial robustness of a long-life operation for the Baobab project.
It is classified as an AACE Class 4 estimate with a ± 20% estimated accuracy.
The bankable feasibility study phase intended to follow will target an AACE Class 3 estimate with a ±10% accuracy.
The Baobab project expansion is feasible at a targeted 1 Mtpa phosphate rock concentrate capacity.
It will deliver a “very high-grade” 36.4% P2O5 phosphate rock concentrate product.
Overall it has strong project economics with an unlevered, post-tax NPV8% of US$212 million and IRR of 25.5%. It will generate free cashflow (post all capital expenditures and tax) of $544 million and EBITDA of just above $1 billion.
It will require a pre-production capital expenditure of $183 million will have a payback period of 3.3 years from first production or 5.3 years from detailed engineering start.
The estimated average direct operating cost is $56/t of 36.4% P2O5 concentrate produced.
The initial 13.4-year mine life is based just on the project’s indicated mineral resource only.
Encouraging project finance discussions underway with potential partners the company confirms.
Avenira’s MD and CEO Louis Calvarin says:
“The just-completed Baobab phosphate project feasibility study clearly demonstrates the project's strong technical foundation and compelling financial returns, with cost-effective strip-mining and processing techniques delivering a high-grade premium quality product.”
The FS is based on an open-pit strip-mining design and conventional flotation and magnetic separation ore processing plant operating at an ore throughput of 2.9 Mtpa and a phosphate rock concentrate post ramp-up production rate of 1 Mtpa.
It determined that the project’s probable ore reserve is 39.3 Mt at 18.9% P2O5.
Finalisation of the FS represents a key milestone in the evolution of the project. The Company intends to initiate the BFS phase (Class 3 estimate) once the final project configuration has been confirmed as part of a planned value-engineering study.
Concurrently, Avenira intends to undertake more advanced and detailed discussions with potential funding parties. BFS completion is projected to take place during the December 2019 quarter.