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Old 04-11-2013, 01:10 AM
Sparty Sparty is offline
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Default Alkane: Definitive feasibility study confirms robust dubbo zirconia project

The DFS for the DZP has delivered a technically and financially robust project over an initial 20 year life with EBITDA of A$5.23 billion and NPV of A$1.23 billion.

The DZP is a strategic and alternate source of zirconium and heavy rare earth products with a resource capable of very long term supply

Several strategic partnerships have been established and product development work is continuing to ensure maximum return for the Project's output


The Project remains on track for development anticipated early in 2014

Summary


In comparison with the September 2011 feasibility study, this DFS confirms a1Mtpa production model.

Since the earlier study there has been a reduction in market prices for zircon-zirconium chemicals and for all the rare earths. The revised DFS is positive regarding future price trends for DZP products, especially heavy rare earths which have greater scarcity, and the impact of the Shin-Etsu agreement which provides the potential for the full spectrum of separated rare earths without the technical and financial risk of AZL developing its own separation facility.

The revised DFS shows higher total project capital costs and slightly higher operating costs in accord withindustry wide increases in Australiaover the last two years. These increases now appear to be contained.

The Project demonstrates a similar revenue outcomeand a slightly lower EBITDA of A$290Mpa compared to A$312Mpa in 2011. Project NPV is virtually identicalat A$1.2 billion. This result is also a substantial improvement on the October 2012 interim assessment which gave A$222Mpa EBITDA with a capex of A$1,064M.


Upside for the project is contained in the size of the resource which gives the DZP a project life of at least another 50 years beyond the 20 year life assessed in the previous and revised DFS.

With ongoing process optimisation other potential upside are in higher recoveries for all the metals, the potential for recovery and sale of a tantalum product, as well as positive outcomes from joint ventures.



More about ALKANE RESOURCES


 

Disclaimer: The author of this post, may or may not be a shareholder of any of the companies mentioned in this column. No company mentioned has sponsored or paid for this content. Comments on this forum should never be taken as investment advice.

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