After-tax NPV8 of
The technical report titled "Preliminary Economic Assessment - Carina Rare Earth Element Project -
Highlights
- Robust economics
- After-tax Net Present Value of
~US$1.2 billion using an 8% discount rate - 29% internal rate of return over the 17-year life of mine
- Low initial capital costs of
US$576 million with a payback period of 3.6 years - Average annual1 net revenue and EBITDA of
US$474 million andUS$340 million , respectively - Low average production cost of
US$13.1 per tonne - Long-term rare earth price forecasts provided by Argus Media and Adamas Intelligence, underpinned by compelling supply/demand fundamentals
- After-tax Net Present Value of
- Significant production of magnetic REEs
- Average annual1 production of 208 tonnes DyTb representing approximately 13.7% of
China's 2023 official production2 - Average annual1 production of 1,190 tonnes NdPr contributing to a balanced mix of light and heavy REEs in the final product
- Average annual1 production of 208 tonnes DyTb representing approximately 13.7% of
- High product quality
- Concentration of REEs in the mixed carbonate of 91.9%3
- Very high content of DyTb and NdPr at 4.7% and 26.4%, respectively
- High purity product facilitates further separation and recoveries
- Low environmental impact
- Process designed to minimize environmental impact: it does not use explosives; there is no crushing nor milling; approximately 95% of the water used is recirculated; the main reagent is a common fertilizer; no liquid residue is produced, negating the need of a tailings dam
- Minimal CO2 footprint is supported by a combination of low energy consumption and a high percentage of renewable energy within the
Goiás power grid
- Expedited path to early production
- The pilot plant, currently in operation, de-risks metallurgical recoveries
- The
State of Goiás has fully approved another ionic clay REE producer (Serra Verde ), thereby establishing a significant precedent that provides a positive permitting background for new projects in this State - Commissioning estimated to commence in 2029
- Upside potential
- Drilling campaign underway to increase mineral resources
- Metallurgical optimizations have been identified
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1 Annual average does not consider the first year of ramp-up and the last year of ramp-down. |
2 |
3 Purity is expressed as REO equivalent. |
"We extend our gratitude to our dedicated team for the swift progress achieved in bringing the Carina Project to this pivotal stage. As a company committed to making a lasting impact in the rare earths market, our strategic focus on sustainability and responsible production aligns with the success seen in the Project PEA. The positive results of the Carina Module PEA showcase a robust economic profile with an after-tax NPV of
We recognize the importance of minimizing environmental impact. The Project design emphasizes eco-friendly practices, avoiding explosives and milling, maximizing water recirculation, and employing a common fertilizer as the main reagent. With a process designed to minimize its CO2 footprint, we are dedicated to ensuring that our operations align with sustainable practices and global environmental standards.
As we embark on an ambitious drilling campaign and identify metallurgical optimizations, our sights are set on maximizing the upside potential of the Project. Permitting, a key aspect to be addressed in our expedited path to production, is expected to be well supported by our patented flowsheet, our focus on social development and maintaining a close relationship with the forward-looking State of
On
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Table 1 lists the relevant parameters associated with the Project's operating and financial metrics.
Table 1: Key Project Operating & Financial Parameters
Unit | Total | Annual Average* | |
Mining and Processing | |||
Life of Mine | years | 17 | - |
Total Process | million tonnes (dry) | 149.5 | 9.6 |
Total Waste Mined | million tonnes (dry) | 43.3 | 2.6 |
Strip Ratio | - | 0.3 | 0.3 |
Production | |||
Total Rare Earth Oxides | tonnes | 70,307 | 4,498 |
Neodymium & Praseodymium (NdPr) | tonnes | 18,546 | 1,190 |
Dysprosium (Dy) | tonnes | 2,802 | 178 |
Terbium (Tb) | tonnes | 479 | 30 |
Financials | |||
Net Revenue | US$ million | 7,355 | 474 |
Net Smelter Return | US$/t | 49.2 | - |
Production Cost | US$ million | 1,965 | 125 |
Unit Cost | US$/t | 13.1 | - |
EBITDA | US$ million | 5,243 | 340 |
EBITDA Margin | % | 71 | - |
Income Tax | US$ million | 1,532 | 101 |
Effective Tax Rate | % | 36.2 | - |
US$ million | 576 | - | |
Royalty Purchase Cost | US$ million | 6.5 | - |
Sustaining Capital | US$ million | 106 | - |
Financial Returns | |||
Pre-Tax Net Present Value (8%) | US$ million | 1,880 | - |
Pre-Tax Internal Rate of Return | % | 35.7 | - |
Post-Tax Net Present Value (8%) | US$ million | 1,186 | - |
Post-Tax Internal Rate of Return | % | 28.6 | - |
Payback Period | years | 3.6 | - |
*Note: Annual average does not include the first year of ramp-up and the last year of ramp-down |
A sensitivity analysis was undertaken to evaluate the impact on NPV by varying the following attributes:
- basket list price
- discount rate
- CAPEX
- OPEX
- metallurgical recoveries
The discount rate was evaluated by varying its value from 4 to 12% while the remaining attributes were evaluated by varying their values from 80 to 120% (Figure 2).
The mineral resource has been estimated using the results obtained from 201 auger drill holes (1,630 m) and 1,418 samples. At a
Table 2. Carina Module Inferred Mineral Resource Estimate (Effective
Mineral Classification | Mass (Mt) | Total Oxide Grade (ppm) | Oxide Content (t) | ||||||
TREO | NdPr | Dy | Tb | TREO | NdPr | Dy | Tb | ||
Inferred | 168.1 | 1,510 | 296.5 | 42.1 | 6.9 | 253,853 | 49,832 | 7,077 | 1,163 |
Total | 168.1 | 1,510 | 296.5 | 42.1 | 6.9 | 253,853 | 49,832 | 7,077 | 1,163 |
Notes: |
1. CIM (2014) definitions were followed for mineral resources. |
2. Mineral resources are estimated above a net smelter return value of |
3. Mineral resources are estimated using average long term metal prices and metallurgical recoveries (see Carina Module PEA for details). |
4. Mineral resources are not mineral reserves and do not have demonstrated economic viability. |
The Project is based on standard open pit extraction techniques using conventional hydraulic excavators and 44-t payload haulage trucks to extract and deliver the clays to the process plant. The process plant has been located close to the centre of mass of the mining operation to minimise the total haulage distance over the life of the mine. Given the friable nature of the clays and the shallow depth of the extraction zones, no aggressive nor energy-intensive techniques such as drilling and blasting are required to extract the clays from the pits. Table 3 list the key input parameters used in the mine design.
Table 3: Key Mine Design Parameters
Description | Unit | Value |
Pit Optimization | ||
Overall Slope Angle | degree | 25 |
Reference | US$/t mined | 2.13 |
Mining Recovery | % | 95 |
Mining Dilution | % | 5 |
Processing Cost | US$/t processed | 10.46 |
Selling Cost | US$/kg REO | 7.032 |
Federal Royalty | % of revenue | 2 |
REO Price | US$/kg REO | variable by REO |
Pit design | ||
m | 4 | |
Berm Width | m | 3.5 |
Bench Slope Angle | degree | 38 |
Ramp Width | m | 12 |
Ramp Gradient | % | 10 |
Scheduling | ||
Minimum Operational Area | m | 25 |
Plant feed | Mt/year | 9.5 |
Mining Recovery | % | 98.5 |
Mining Dilution | % | 1.5 |
Once the clay is delivered to the process plant, it will be washed using an ammonium sulfate solution to extract the REEs from the clay surfaces. No crushing, grinding nor milling is needed to free the REEs from the clays as they are extracted through a non-invasive ion-exchange reaction process whereby ammonium sulfate ions replace REE ions on the surface of the clay thereby liberating the REEs into solution. The REEs in solution are then removed through a pH-adjusted precipitation process and then passed through a high-pressure filter to remove any remaining liquids, resulting in the production of a high-purity REE carbonate ready for shipment to a separation facility. The process plant will have an average production rate of 4,498 t/year of REO within the concentrates.
Any unwanted impurities such as aluminium and calcium that have been extracted from the clays during the ion exchange process are similarly removed through a precipitation process and then recombined with the washed clays before being transported to a dry stacking storage facility for the first five years of the life of mine. Beginning in Year 6, the washed clays will be back-filled to the mined-out extraction zones to initiate the mine closure process.
A water recovery system integrated into the process plant cleans and regenerates the remaining process liquors such that they can be reintroduced into the feed. The treated water is reused in a closed circuit to reduce water consumption thereby preventing the release of process water into the environment. This allows the process plant to operate with the minimum of make-up water and allows the main reagents to be regenerated and reused within the process plant.
Before the barren clays exit the process plant, they are washed with clean water within standard plate-and-frame filter presses. This will remove any residual ammonium sulfate from the clays before they are returned to either a dry stacking facility or used to back-fill the extraction zones to be safely used during revegetation.
The Project include the necessary infrastructure to provide of make-up water for the process plant, supply power to the site, and provide a road network to service the operation, amongst others.
Electrical power for the processing plant, truck shop, administration offices, and other facilities will be supplied by the national power utility through overhead power transmission lines from a sub-station located approximately 90 km from the Project site.
Vehicle electrification, wind turbines and the transition to renewable energy sources will continue to drive demand for REEs in terms of volume and, especially, value. This will primarily affect the REEs used in alloys to fabricate permanent magnets: Dy, Nd, Pr, and Tb. The supply of clean heavy REEs, especially Dy, has become problematic because few projects target heavy REE deposits. For the medium term, the market will continue to rely on
The near-term forecast is for further price gains and the average prices of permanent magnet REEs are expected to be 15–25% higher in 2024 than 2023. In the medium to long term, Argus Media expects permanent magnet REE prices to increase steadily for the remainder of the decade, with the possibility that they could pick up more quickly in the early 2030s without more supply from new projects. Dy prices are expected to continue to outperform the general permanent magnet REE market due to a significant supply/demand imbalance in the early 2030s (Table 4, Figure 3).
Table 4: Dysprosium Price Forecast
2022 | 2023 | 2025 | 2028 | 2033 | |
Price (US$/kg) Base Case | 384 | 330 | 415 | 510 | 945 |
Price (US$/kg) Optimistic | 384 | 330 | 435 | 520 | 1,140 |
Price (US$/kg) Pessimistic | 384 | 330 | 395 | 465 | 760 |
Total supply (1,000 t REO) | 1.9 | 2.8 | 3.1 | 3.8 | 4.0 |
Total demand (1,000 t REO) | 2.8 | 3.4 | 4.3 | 5.3 | 7.0 |
Surplus/deficit index (2018=100) | 98 | 97 | 93 | 84 | 60 |
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4 Argus Media |
Two external factors could affect future REE prices, both with the potential to push prices upwards: so-called 'green' premiums; and critical material policies (especially in
Perhaps even more relevant to future REE prices are the critical materials policies/regulations being enacted globally, specifically the EU Critical Raw Materials Act and the US Inflation Reduction Act. These regulations/legislations are focussed on creating raw material supply chains that are not reliant on
The permitting process is already underway and the technical development of the Project will continue with a bankable feasibility study scheduled to be delivered in 2026 and the commencement of operations in 2030 (Table 5).
Proposed Next Steps
- Q1 2024: produce REE carbonate samples by processing the Project's ionic clays at
Aclara's pilot plant inChile - Q1 2024: initiate environmental baseline, radiography, archeological, speleological (cave) and hydrogeological studies
- Q2 2024: commence prefeasibility study
- Q2 2024: complete a 9,090-meter reverse circulation drilling campaign across the Project's mineral resource to test the extension of the mineralization at depth. Currently, 1,374 meters within 52 drill holes have already been executed with an average saprolite mineralization depth of 22 meters
The technical information in this press release has been reviewed and approved by geologist Fábio Xavier and mining engineer Porfírio Cabaleiro Rodriguez, both associated with GE21 Consultoria Mineral, as well as Chemical Engineer Stuart J Saich of Promet101 Consulting Pty Ltd. GE21 is a specialized, independent mineral consulting company based in
Messrs. Rodriguez and Xavier visited the Project from
Mr. Saich is a professional chemical engineer with more than 37 years' relevant experience in metallurgy and process design development. He is with a member of the
Simultaneously, alongside the development of the Carina and
This press release contains "forward-looking information" within the meaning of applicable securities legislation, which reflects the Company's current expectations regarding future events, including statements with regard to: mineral continuity, grade, methodology, development timeline, production timing and upside at the Carina Module, the Company's exploration plan, drilling campaigns and activities in
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