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PERTH (miningweekly.com) – A definitive feasibility study (DFS) into the Watershed tungsten project, in Queensland, has placed a A$172-million price tag on the project’s development, owner Vital Metals reported on Wednesday.
The DFS concluded that the project could support a 2.5-million-tonne-a-year operation for a mine life of ten years, based on a maiden ore reserve of 21.3-million tonnes, grading 0.15% tungsten, for 31 400 t of contained tungsten.
Operating costs have been estimated at an average of A$56-million a year.
The project was expected to generate revenue of more than A$1-billion over its mine life, and would have a net present value of A$112-million and an internal rate of return of 22%.
Vital MD Mark Strizek said on Wednesday that the completion of the DFS was a major milestone for the company, with the results demonstrating the project’s strong technical fundamentals and financial returns.
The delivery of the DFS was expected to act as the catalyst for project partner Japan Oil, Gas and Metals National Corporation (Jogmec) to transfer its 30% shareholding into a new joint venture (JV) partner that would have an offtake interest in the project, and the responsibility for arranging its share of the project finance.
Strizek said that Vital would work with Jogmec to secure the new Japanese JV partner to progress the Watershed project.
“The process is already well under way, and pending the successful transfer of Jogmec’s interest and the completion of a suitable financing package for Vital’s share of the development costs, we hope to start construction at Watershed in 2015 and have first ore production before the end of 2016.”
The project was currently fully permitted and had all its mining leases, environmental and indigenous land use agreements in place.