Metallica Minerals (ASX:MLM) has doubled the saleable product to 3 million tonnes per annum at its Cape Flattery Silica Sand Project in North Queensland following an updated Definitive Feasibility Study.
The $24.95 million market capitalisation company is on track to enter the silica sand market with a project poised to deliver cash revenue of $3.065 billion over the life the mine.
Metallica says the update builds on the July DFS and shows Cape Flattery will have a capital cost estimated to be $236.7 million, including a 10% contingency of $21.5 million and with a payback period from the start of production of 3.2 years.
The DFS also demonstrates pre-tax net present value (NPV) of $702.4 million and an internal rate of return (IRR) of 37.2%.
The company notes the average cash margin from the project has increased to $53.06 per tonne and the average earnings before interest, taxes, depreciation, and amortisation (EBITDA) is now $134.6 million per annum.
The updated DFS does not include the inferred resource for the western area of tenement EPM25734 — which holds a maiden Inferred resource of 12 million tonnes @ 99.15% silicon dioxide and iron oxide — which may represent an additional opportunity to further improve the economics of the project.
An additional dry mining unit, process plant, stockpile, and stacker are included in the additional capital estimate. The marine infrastructure and transhipping operation did not require any additional capital resulting from the additional processing capacity.
Metallica Minerals Executive Chairman Theo Psaros says the company is impressed with the economic potential of the CFS project after completing the updated DFS.
“The improvement in the project economics from the updated DFS illustrates the benefit of economies of scale, a shorter mine life with no change to the total project footprint and delivery of the same level of economic contribution to the local communities in a shorter time frame.
Our planned timing for production and the potential for increased sales tonnes positions the CFS Project to meet the growth in demand for HPSS and the increasing manufacturing of solar panels in the Northern Asian region.”
Metallica Minerals is an Australian developer focused on delivering ‘high-purity’ silica sand to a diversified global customer base.
The company’s Cape Flattery Silica Sand Project sits in North Queensland and is poised to deliver employment, apprenticeship training, and new business opportunities to townships of Hope Vale and Cooktown, particularly the local indigenous communities.
As of 30 September 2023, Metallica Minerals had $5.670 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Metallica Minerals