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Results of the Preliminary Economic Assessment on the Frontier Rare Earths Limited (TSX:FRO) Zandkopsdrift rare earth element (“REE”) project in South Africa indicate that the proposed development of the Zandkopsdrift Project is both technically feasible and economically robust with a low risk profile.
Results of the Preliminary Economic Assessment on the Frontier Rare Earths Limited (TSX:FRO) Zandkopsdrift rare earth element (“REE”) project in South Africa indicate that the proposed development of the Zandkopsdrift Project is both technically feasible and economically robust with a low risk profile.
As quoted in the press release:
HIGHLIGHTS
- Net Present Value (“NPV”) of $3.65 billion, after tax and royalties, at an 11% discount rate
- Internal rate of return (“IRR”) of 52.5% , after tax and royalties, and 2 year payback from start of production
- Average production of 20,000 tonnes of separated rare earth oxides (“REO”) per annum, generating average annual revenues of $1.1 billion and an estimated operating margin of 78%
- Twenty year mine life, supported by the mining and processing of 19.5 million tonnes of material with an average in-situ grade of 3.12% total REO (“TREO”) at an average metallurgical recovery of 67%
- Capital costs of $910 million for a 1 million tonne per annum open-pit mining operation and concentration and rare earth separation plant facilities
- Rare earth oxide ‘basket price’ of $58.23/kg used for Zandkopsdrift production, based on an average of three-yearChina Free on Board average REO prices and Roskill’s mid-point 2015 REO forecasts applied to Zandkopsdrift’s in situ REO relative distribution.
- Estimated average operating costs of $13.09/kg of separated REOs
- Conventional metallurgical process, comprising comminution, flotation, sulphuric acid cracking and solvent extraction
- Potential for life of mine to be extended beyond initial 20 years, as the PEA mine plan only exploits circa 60% of the current estimated TREO resource at Zandkopsdrift
- Pre-feasibility study (“PFS”) under way, with completion scheduled for Q4 2012
Frontier Rare Earths President and CEO James Kenny, said:
“The results of our PEA demonstrate the economic attractiveness of our project, and we have a world-class partner in Korea Resources Corporation (“KORES”), the Korean Government-owned mining and natural resources investment company. KORES intends to invest in Zandkopsdrift, provide technical and financial assistance, and secure off-take of up to 31% of Zandkopsdrift production.”
Click here to read theFrontier Rare Earths Limited (TSX:FRO) press release
Click here to see the Frontier Rare Earths Limited (TSX:FRO) profile.