Heavy Minerals (ASX:HVY) reports a post-tax net present value (NPV) of $322.8 million and an internal rate of return (IRR) of 47.6% for its Port Gregory Garnet Project in Western Australia.
The Prefeasibility Study (PFS) confirms a conventional, low-capital garnet operation with a 24-year mine life generating life-of-mine earnings before interest, tax, depreciation, and amortisation of $1.34 billion from a gross revenue of $3.07 billion.
The study also establishes a maiden probable ore reserve of 85.5 million tonnes (Mt) @ 4.43% total heavy minerals for 3.3Mt of contained garnet.
Meanwhile, development capital totals $122.1 million, delivering an NPV-to-capital ratio of 2.64-times on an 8% real discount rate.
Executive Chairman Adam Schofield says the PFS confirms Port Gregory as a “high-margin, long-life garnet project”.
“A post-tax NPV of $322.8 million and an IRR of 47.6%, on a modest capital base, gives us a clear and fundable pathway to development,” Schofield says.
“What gives the board the most confidence is not the headline number; it is what sits underneath it.
“This is a free-digging deposit with no drilling and blasting, no crushing or grinding, and no permanent tailings storage facility, feeding a conventional flowsheet proven on our own bulk sample rather than assumed.
“It sits in an established mining precinct with a workforce and port already in place.”
According to the study, peak funding requirements are approximately $89.5 million, with payback approximately 3.1 years from first production.
The PFS also shows the project remains most sensitive to product price and least sensitive to capital cost. A 20% reduction in product price reduces post-tax NPV to $137.3 million, while maintaining positive economics across the full range tested.
The study also applies a weighted average year-one basket price of US$555 ($799) per tonne, with a 2% real annual escalation for bulk grades.
Heavy Minerals selected an LNG, solar, and battery energy storage system hybrid for the study following a technical and commercial review. This route, the company says, features a projected renewable energy fraction of around 34% in the first year.
The company is currently progressing mining lease applications and environmental approvals while advancing product qualification discussions with end users.
Next steps include advancing the Definitive Feasibility Study and funding workstreams towards a final investment decision.
Heavy Minerals is an industrial mineral explorer and developer, with projects involving garnet, zircon, rutile, and ilmenite, among others.
Write to Paula Fabe at Mining.com.au
Images: Heavy Minerals
