McLaren Minerals (ASX:MML) has released the details of its Prefeasibility Study (PFS) for the wholly owned McLaren Titanium Project located in southern Western Australia.
The PFS confirms the project has the potential to generate $2.78 billion in total revenue and $899.7 million in EBITDA over an initial 15.9 year mine life, with a payback of 3.7 years.
The PFS outlines an expanded mineral resource estimate (MRE) of 529 million tonnes @ 4.5% heavy minerals (HM) (indicated and inferred), including an indicated portion totalling 249 million tonnes @ 4.7% HM.
The base case pricing estimates ilmenite concentrate at a price of US$250 ($372.62) free on board per dry metric tonne (DMT) and a non-magnetic concentrate price of US$366 per DMT. These pricing assumptions are supported by an independent market report from Specialised Mineral Services.
The project presents strong financial outcomes given the base case assumptions with an average annual EBITDA of approximately $56.5 million and an average EBITDA margin of $129 per dry tonne of finished product.
The project’s low technical and execution risk was validated by an engineering study carried out by IHC developed a simplified flowsheet using traditional mineral sands separation equipment and bulk mining by Dry Mining Unit, which demonstrated economies of scale.
Additionally, test work completed during the PFS improved and validated the slimes management and co-disposal methods that will be used at McLaren.
Managing Director Simon Finnis notes that the completion of the PFS was a key goal after acquiring McLaren and that the results have “validated and derisked the project”.
“Our updated MRE vastly exceeded our expectations and provides opportunities that will be studied during our bankable feasibility stage, which is due to commence shortly,” Finnis says.
“These outcomes should provide shareholders with confidence that McLaren is not only viable, but a very robust project, driven by our approach to minimising upfront capital while maximising returns.”
Over 60% of the total resource remains unmined currently, which provides the project with valuation upside, flexibility, and additional opportunities that will be evaluated in the bankable feasibility study.
McLaren Minerals is developing the McLaren titanium project in Western Australia.
Write to Amy Rotman at Mining.com.au
Images: McLaren Minerals
