Cadence Minerals (KDNC ) said its joint venture partner, Hastings Technology Metals, has reported significant progress on, and improved project economics for the Yangibana Project.
The updated project economics, based on a Definitive Feasibility Study (DFS) from 2017 which was revised in 2021, follows an extensive and comprehensive review period which has sought to de-risk project execution, optimise the flowsheet and enhance project economics.
Hastings, an Australia-based exploration and development firm, is Cadence’s JV partner at the Yangibana Rare Earth Project located in the Gascoyne region of Western Australia.
The updated project economics showed the project’s post-tax internal rate of return (“IRR”) to be 26% while post-tax net present Value8 (“NPV8") had increased by 84% to $1,012 million.
The life of mine pre-tax free operating cash flow increased by 71% to $4,376 million while the project’s revised capital cost was estimated at A$582m (including contingency is $658m).
The project economics concluded that the project is ‘shovel-ready’ following a comprehensive review and assessment of current inflationary pressures present in Western Australia.
The capital payback period is forecast at 2.7 years from the commencement of production. The report found that a production of 3,400tpa of neodymium praseodymium (NdPr) Oxides would be capable of supplying up to 8% of forecast global NdPr demand, Cadence reiterated.
Shares in Cadence Minerals were trading 2.72% higher today at 20.75p following the news.
Following these updated project economics, the company said discussions relating to funding options with suitable partners continue to progress, adding that the $20 million early works program to deliver the core site infrastructure at the Yangibana Project is now well underway.Hasting’s intention was to validate the capex required to bring Yangibana into operation considering the current inflationary environment and tightening labour market in the region.
The management team said they now have a high degree of confidence in the quantum of capital required and are proceeding to finalise funding arrangements for Yangibana ahead of proposed commencement of plant construction activities forecast to commence in 2H22.
Commenting, Hastings’s Executive Chairman, Charles Lew stated: “Today is a significant milestone for the Hastings team that is the result of an extensive amount of work carried out over a number of years. The updated project economics tell a story of a world-class rare earths project that will be capable not only of delivering up to 8% of global NdPr demand for a period of at least 15 years but generate significant, long-term value for all shareholders.”
Cadence owns 30% of 3 Mining Leases, 6 Exploration Licences which form part of the Yangibana Rare Earth Deposit. Hastings Technology Metals owns the remaining 70%.
Follow News & Updates from Cadence Minerals: