Cape Alumina's Pre-Feasibility Study delivers positive returns for Pisolite Hills
Cape Alumina's (ASX: CBX) Pisolite Hills project has already been declared a Project of State Significance by the Queensland Government, with the project now delivering 'attractive financial returns'.
Signficantly, the study forecasted that at full production
it could produce at an FOB cash operating cost of around $23 per tonne of
product bauxite (excluding royalties).
A major advantage for the project is that the higher alumina content of Cape York bauxite provides a pricing premium when
compared to Indonesian bauxite prices.
An updated Pre-Feasibility Study (PFS) for the company’s Pisolite Hills Mine
and Port project (Pisolite Hills), has confirmed the technical and economic
feasibility of as a 7.5 million dry product tonnes per annum bauxite mine
producing high-quality, export-grade bauxite over a life of 14 years, based on
a 134 million tonne bauxite resource.
Of the resource, 67% is in the higher confidence Measured or Indicated
categories.
The project is located on the western Cape York in far North
Queensland and estimated to have a capital cost of $396 million
and an internal rate of return of 25.6%.
Cape
Alumina is now potentially in a position to tap the bauxite
demands of China,
with prices having strengthened and remain firm.
Also helping Australian bauxite companies is Indonesia’s 20% export tax (applied
since July 2012) which has added about US$4-5/t to the cost of Indonesian
bauxite.
Indonesia
has legislated to ban bauxite exports from 12 January 2014.
At the end of March 2013, Cape Alumina had around $3 million in cash.
Key outcomes
- The shallow, free digging bauxite averages 2.4 metres, and ranges up to 6
metres in thickness, with an average overburden depth of 0.4 metres resulting
in very low strip ratios.
- The proposed mine fleet includes front-end loaders and mine trucks, to load
and transport the raw bauxite to the beneficiation plant, and road trains to
transport the bauxite product to Port Musgrave.
- Run of mine raw bauxite will be washed in three 650 tonne per hour beneficiation
plants which incorporate crushing, sizing, screening and conveying.
- Transhipping of the bauxite product is a key value driver for the operation
and the use of 6,000 to 10,000 tonne barges, loading 71,000 tonne Panamax or
166,000 tonne Cape-size vessels, has been incorporated in the design.
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