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Avalon Rare Metals Inc. (TSX:AVL, AMEX:AVL, NYSE:AVL) announced that they have completed the Feasibility Study for its Nechalacho Rare Earth Elements Project, which revealed economic promise.
Avalon Rare Metals Inc. (TSX:AVL, AMEX:AVL, NYSE:AVL) announced that they have completed the Feasibility Study for its Nechalacho Rare Earth Elements Project, which revealed economic promise.
As quoted in the press release:
Feasibility Study Highlights
- The discounted cash flow (“DCF”) analysis yields a 22.5% internal rate of return (“IRR”) on a pre-tax basis and a 19.6% IRR on an after-tax basis, assuming 100% equity financing. The Project’s net present value at a 10% discount rate is $1.351 billion(1) pre-tax and $900 million after-tax.
- Total Project construction capital costs are $1.575 billion, which is inclusive of a 13% contingency and $122 million in sustaining capital. Of the total capital costs, approximately $1.152 billion is expected to be incurred in the Northwest Territories and $423 million is expected to be incurred in Louisiana.
- Operating costs average $264.5 million per year
Avalon’s President and CEO, Don Bubar, said:
We are very pleased to have delivered a positive Feasibility Study for the Nechalacho Project within the budget and the schedule we set for ourselves in May, 2012. The robust economics, despite a substantial CAPEX burden, testify to the exceptional quality of the Nechalacho deposit and its large size offers the potential for creating a scalable, multi-generational business. The successful completion of this study confirms Nechalacho’s status as the most advanced major heavy rare earth element project in the world outside China. With the FS in hand, we can now accelerate the process of securing commitments on future product sales and attracting financial partners to participate in the further development of the Project.
To view the whole press release, click here.
