Hastings Improves Yangibana Economy
PERTH (miningweekly.com) – A project economics update for the Yangibana rare earths project in Western Australia has increased the project’s after-tax net present value (NPV) by 84%, while its operating free cash flow expectations have increased by 71%.
Hastings Technology Metals, listed on the ASX, announced on Monday that due to an increase in neodymium praseodymium (NdPr) prices compared to 2019, as well as an increase in estimated ore reserves, the NPV of the project had risen from the previously estimated A$549. million to A$1.01 billion, while the after-tax internal rate of return increased from 21% to 26%.
The 2019 economic study is based on an ore reserve of 12.2 million tonnes, at 1.12% TREO, and an NdPr price of $103/kg, while the latest update is based on a reserve of ore of 16.7 million tonnes at 0.95% TREO. , and a NdPr price of $112/kg.
The new economic study has increased Yangibana’s projected life from 12 to 15 years, with the project still expected to produce 15,000 t/y of mixed rare earth carbonate, containing 3,400 t/y of NdPr.
Estimates for the total capital cost of the project also rose slightly from an estimated A$516 million in 2019 to A$658 million, while annual earnings before interest, tax, depreciation and amortization rose from A$183 million. Australian dollars to 295 million Australian dollars.
Life of mine operating cash flow is now expected to reach A$4.3 billion.
“Today is a significant milestone for the Hastings team that is the result of extensive work done over several years. The updated project economics tells the story of a world-class rare earths project that will not only be able to supply up to 8% of global NdPr demand for a period of at least 15 years, but will generate significant long-term value for all shareholders,” said Hastings Executive Chairman Charles Lev.
“The Hastings team has done a tremendous job since 2017 to optimize and de-risk the Yangibana project, both technically and commercially, to make it an even more compelling investment proposition. Since its discovery in 2014, we have always been confident in the quality of Yangibana’s rare earth endowment. As it turns out, the steady progress we have made over the years has converged into a strong global market for rare earth magnets, supported by the global energy transition and electric mobility. As demonstrated by the updated project economics, Yangibana will be a financially and operationally sound and long-lived project.
“We are well advanced in discussions with a range of financing partners and are now focused on finalizing the appropriate capital structure that best positions Hastings to successfully bring Yangibana into production by 2024. This includes completing of a corporate transaction or the search for joint venture partners.”
Plant construction activities are planned for the second half of 2022, and the first production of rare earths is planned for the September quarter of 2024.