A completed Scoping Study shows Black Canyon’s (ASX:BCA) KR1 and KR2 mineral resources within the Balfour Manganese Field will generate “attractive financial returns” based on a 16-year mine life with an average mining production rate of 3Mtpa.
The Scoping Study shows the project could produce 12 million tonnes of manganese concentrate over the life of mine (LOM).
The Australian manganese developer and explorer reports the $84 million capex project has a pre-tax NPV of $340 million (8% discount rate) and pre-tax IRR of 70% with a payback period of less than two years.
LOM revenue is projected to be $2.781 billion with EBITDA of $654 million and an average annual operating cash flow of $46.1 million.
The 44% manganese benchmark (CIF Tianjin) price has been used as the basis for the Scoping Study based on a long-term average price of US$5.60 per dry metric tonne unit (dmtu), with the current price over US$8.00/dmtu.
With a concentrate sales price of US$4.60/dmtu for a 33% manganese product, the Scoping Study shows C1 cash costs of US$3.02/dmtu and all-in sustaining cost (AISC) of US$3.38/dmtu/CIF.
Black Canyon Managing Director Brendan Cummins says the company can now focus on more detailed feasibility studies and prepare for the necessary permitting and environmental approvals, confident in the long-term market prospects for manganese products.
“We will also pursue investigations into opportunities to advance an HPMSM (high purity manganese sulphate monohydrate), project in Australia with key government initiatives continuing to support downstream processing of critical minerals,” he says.
Cummins adds that the study indicates competitive production costs and substantial manganese concentrate annual output.
“Looking ahead, the company plans to investigate further improvements, by optimising throughput, incorporating cost-effective mining techniques and refining transport/logistic solutions,” he says.
The LOM estimated production target contains 248.2 million tonnes at 10.9% manganese, with a low-strip ratio of 0.56:1 and a forecast annual production of 760,000 tonnes per year.
“We are not resource constrained, with multiple deposits with low strip ratios and higher grades from surface also providing potential upside as we progress the project,” Cummins says.
“The utilisation of low risk conventional dense media separation (DMS) as a primary separation technique will be further evaluated with the processing of life-of-mine composite metallurgical samples and several variability composites.
“Whilst we are satisfied that we can deliver a standard 30 to 33% Mn concentrate our next objective is to improve on the grade with ambitions to produce a higher grade concentrate as part of our product suite.”
The Scoping Study is based on developing a mine about 115km northeast of Newman. Most of the manganese concentrate will be utilised by smelters to produce non-substitutable alloys used in steel manufacturing.
The manganese concentrate would be mined from indicated and inferred resources of 103 million tonnes @ 10.4% containing 11 million tonnes of manganese. This includes a higher-grade subset, comprising indicated and inferred resources of 29 million tonnes @ 13.3% manganese across the KR1 and KR2 deposits
The Balfour Manganese Field is located some 400km southeast of Port Hedland and 115km northeast of Newman, in the east Pilbara region of Western Australia.
Black Canyon engaged with privately held BatteryLimits to undertake the Scoping Study which examined the potential development of the KR1 and KR2 deposits.
Write to Aaliyah Rogan at Mining.com.au
Images: Black Canyon
