RNS27 Sep 2021 08:21
DFS2 enhances scale and economics of the Toliara Project
Key points
• Increase in post-tax / pre-debt (real) NPV @ 10% discount rate to US$1.0 billion, measured at FID
• Average revenue to cost of sales ratio of 3.5
• Increase of LOM free cash flow by 60% to US$5.9 billion, with first 10 years averaging US$210 million pa
• Stage 2 scaled up to increase mining rates by 33% to ~25Mtpa and increasing MSP production capacity by 47%
• The increased scale of the Toliara Project is underpinned by significant increases to the Ranobe Mineral Resources and Ore Reserves estimates and the long-term supply-demand outlook for mineral sands:
o RanobeMineralResourcesestimatehasalmostdoubledto2,580Mtatanaverageheavymineralgrade of 4.3%
o RanobeOreReservesestimateincreasedto904Mtatanaverageheavymineralgradeof6.1%,a45% increase in contained heavy mineral, supporting an initial mine life of 38 years
• Stage 1 capex cost, to establish a 13Mtpa mining processing operation, has increased by 18% to US$520 million, primarily due to cost escalation
• Stage 2 capex cost increase to US$137 million due to scale up of the operation to 25Mtpa mining rate
• Annual averages (excluding first and last partial operating years):
o Productionof960ktilmenite(sulphate,****andchloride),66ktzirconand8ktrutile o RevenueofUS$317million–65%ilmenite,32%zirconand3%rutile
o OperatingcostsofUS$77millionorUS$90millionincl.a4%governmentroyalty
o Non-operatingcostsofUS$8million(community,externalaffairs,marketingetc.)
o EBITDAofUS$219million,NPATUS$152million
o FreecashflowofUS$174million
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