Highlights of the financial results of the BFS include a project pre-tax NPV of $135m, an internal rate of return of 64%, capital payback in 1.8 years, and project start-up capital cost of $52m.
In addition to the very positive financial results, the BFS also highlighted many other positive aspects of the project;
- Only 6 months construction and plant already owned
- Fully developed infrastructure in place
- One of the lowest development capital mineral sand projects globally
- Development at a low point in the product price cycle into a rising market
- High sensitivity to rising zircon and titanium mineral prices, e.g. a 20% increase in mineral sand prices on the base case increases the project NPV to over $250m
- Offtake arrangement for 100% of the product on favourable terms
- Potential for long life project with other high-grade deposits along a 100km trend.
What this adds up to is a low cost, low risk project for rapid development.
The upside potential of the project is substantial through improving product prices and optimising a number of value-add opportunities. The greatest upside potential value lies within the additional deposits and mineralised zones identified along the 60-kilometre long corridor of the North Perth Basin that has been Image's exploration focus. A number of these are very high grade. They are capable of adding substantial profitability and supporting long-term production.
Patrick Mutz and his team at Image are to be congratulated on achieving such a high standard of design and analysis for the project development that completed the Bankable Feasibility Study in a short time and within budget. This team has the experience and capability to successfully bring the Boonanarring-Atlas Project through development and into production within tight schedules and budgets.
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About Image Resources NL
Image Resources NL (ASX:IMA) is an emerging Mineral Sands producer focused on the development of its high-grade Boonanarring Project in the North Perth Basin while continuing to expand its resources and reserves base.
Image Resources NL