Anax Metals (ASX:ANX) has released its Definitive Feasibility Study (DFS) update for the Whim Creek Copper Project in Western Australia’s Pilbara, delivering a significant increase in the project valuation.
The DFS update outlines for Whim Creek to generate a pre-tax internal rate of return (IRR) of 98%, up from 54%, and free cash flows up 113% to $723 million, with a pre-tax net present value (7%, Real) of $501 million.
The project has a 10-year mine life supported by 4.6 million tonnes of reserves grading 1.36% copper, 2.31% zinc, 0.67% lead, 30 grams per tonne silver, and 0.27g/t gold. This underpins average annual production of 13 kilotonnes of copper equivalent over the first eight years from a 400 kiloton per annum (Ktpa) concentrator.
Development costs are $91 million, with Anax’s share at $76 million, and a payback expected in just 14 months.
Managing Director Geoff Laing says that the updated DFS results confirm the potential of Whim Creek to deliver substantial value to shareholders in the near-term.
“The company is closing in on debt and equity funding solutions to take advantage of current favourable market conditions,” Laing says.
“The project is endowed with crucial energy transition metals, copper and zinc, as well as surging safe-haven precious metals, silver and gold.
“The step-change in commodity prices observed over the last year for these metals are driving a substantial revaluation of Whim Creek and Anax is very excited about rapidly taking the Whim Creek Project to a Final Investment Decision and into production.”
Whim Creek benefits from existing infrastructure, full permitting, and low capital intensity. It will produce copper, zinc, and silver concentrates, with gold and lead byproducts.
Funding discussions are well advanced, with non-binding debt offers of up to $57 million received, covering most of Anax’s required contribution, and the company continues to engage with strategic partners and offtake providers.
Whim Creek is the only fully permitted, development ready base metal project in the region that is capable of treating both oxide and sulphide ores.
Anax outlines upside opportunities including reserve growth, increased concentrator capacity to 500Ktpa, improved recoveries through pyrite flotation, and heap leach potential that could add further cashflows of approximately $70 million at a copper price of US$9,223 per tonne.
Anax is planning now for additional exploration activities, regional consolidation to refocus its satellite assets, and an expanded relationship with Gold Valley Pilbara following their recent investment in Anax
Anax Metals is an Australian mineral exploration and development company, focused on becoming a near-term producer of copper and zinc through its 80% owned Whim Creek project in Western Australia.
Write to Amy Rotman at Mining.com.au
Images: Anax Metals
