Sky Metals (ASX:SKY) has announced it is targeting a final investment decision for its Tallebung Tin–Tungsten–Silver Project during 2027 after completing a Prefeasibility Study outlining a $138.8 million development.
The study models a 3 million-tonne-per-annum open-cut operation over an initial 7.3-year mine life. Annual production is forecast to average 2,040 tonnes of tin, 31,700 metric tonne units of tungsten trioxide, and 315,000 ounces of silver.
Under base-case prices of US$45,000 (around $63,712) per tonne tin, US$1,500 per metric tonne unit tungsten trioxide, and US$50 per ounce silver, the project delivers a pre-tax net present value of $438 million at an 8% discount rate and a pre-tax internal rate of return of 69%.
Capital payback is estimated at less than 17 months, while life-of-mine annual earnings before interest, tax, depreciation, and amortisation average more than $115 million.
A sensitivity based on spot prices as at 6 August increases the modelled pre-tax net present value to about $1 billion and the internal rate of return to 130%.
CEO Oliver Davies says the study outlines “exceptional project economics, rapid capital payback, modest upfront capital requirements, and strong cash generation”.
The mine plan schedules 21.5 million tonnes (Mt) of ore, equivalent to about 66% of Tallebung’s 32.7Mt mineral resource estimate. However, the production target itself is underpinned by approximately 66% measured and indicated resources and 34% inferred resources.
No ore reserve has been declared. Sky Metals notes there is no certainty that further work will convert inferred material to indicated resources or that the production target and forecast financial outcomes will be achieved.
Drilling has restarted to upgrade more than 11Mt of inferred resources outside the current mine plan and test extensions to the deposit.
The proposed flowsheet uses crushing, X-ray transmission ore sorting, and gravity concentration to produce separate tin, tungsten, and silver streams. According to the company, initial operations would not require flotation, while dry-stack filtered tailings are expected to allow about 90% of process water to be reused.
Sky Metals says it is targeting environmental impact statement lodgement by May 2027, development approval in late 2027, and first production in mid-2028. The company held $17.6 million in cash at 30 June and has begun funding and offtake discussions.
Write to France Pinzon at Mining.com.au
Images: Sky Metals
