LONDON (Alliance News) - Amur Minerals Corp said Thursday its first assessments of the potential of constructing an owner-operated smelting facility could increase the earnings before interest, tax, depreciation and amortisation of its Kun-Manie nickel sulphide project in Russia.
The company has completed the first of two internal assessment for constructing the facility, based on a 15-year mine line producing six million tonnes of nickel copper sulphide ore per year.
This has helped it to determine specific operating costs related to the option of a owner-operated smelter option and determine four alternatives for the treatment of the concentrate. It has determined that three product streams provide the best indicated net present value for the project.
Earnings before interest, tax, depreciation and amortisation per ore tonne via a third-party toll smelter is projected at USD12.96 per ore tonne. However, under the owner-operated option, EBITDA for low-grade matte is USD29.38 per ore tonne, for high grade matte USD31.40 per ore tonne, and for a cathode/precipitate product USD38.70 per ore tonne.
The capital cost for the three product streams varies, with the low-grade matte option being the lowest capital cost, and cathode production substantially higher. Amur said its finalising its estimates to establish what the preferred product option will be.
"We are pleased to inform the shareholders that the construction of an Owner Operated Smelting facility located along the Baikal Amur Rail system could substantially increase the economic potential by a near tripling of the Ebitda of the Kun-Manie nickel sulphide project," said Chief Executive Officer Robin Young in a statement.
"Our last step in the assessment is the determination of the capital cost for the smelting option and the three products that could be generated. This will allow for the definition of the base design of Kun-Manie. We look forward to releasing the final results of the smelter analysis in due course," Young added.
Shares in Amur are trading down 1.2% at 12.36 pence Thursday midday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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