TVI Pacific and Mindoro Resources have announced an NI 43-101-compliant feasibility study indicating robust economics for a direct shipping ore operation of high iron laterite resources at the Agata project in Agusan del Norte, Mindanao.
The study shows initial start-up capital of US$10.1 million; a high internal rate of return (IRR) of 187% and payback within first year of operation; post-tax net present value (at 10% discount) of US$37.9 million; DSO product to grade 48% iron and 0.9% nickel - a consistently in demand product; and remaining infrastructure development planned for quarter 4 of 2013.
DSO deliveries to China are planned to commence in quarter 1 of 2014, while annual shipping rates will accelerate to 2.5 million wet metric tonnes (wmt) in 2015.
TVI Pacific’s chairman and president Cliff James says the study signifies a milestone in developing new cash-flow opportunities beyond TVI’s producing Canatuan copper-zinc mine. “The study demonstrates robust economics that provide a path towards further development at Agata and advancing our goal of eventually building a nickel processing plant.”
Mindoro’s CEO Tony Climie was also upbeat. “The Agata DSO project provides a unique opportunity to generate revenue and to start rebuilding value in our company.”
TVI and Mindoro have signed four JV agreements relating to the Agata and Pan de Azucar mining projects. These allow both companies near and medium-term growth. Mindoro has 75% in the projects and an option to acquire the remaining 25% stake from a private Philippine company while TVI may earn up to a 60% interest from Mindoro and operates the projects.
Agata mining opportunities include a near-term high-iron laterite direct shipping ore operation (DSO); near-term limestone DSO; medium-term lime production facility and medium-term nickel-processing plant. The high iron limonite DSO sale price of US$22 per wet metric tonne is 10% lower than the average sale price realized by off-takers shipping similar ore over the past 18 months.
Installed capital cost estimates include the port loading facility, general infrastructure, mining-related capital costs, duties and taxes for equipment, sustaining capital and an estimate of working capital. A 10% contingency has been allowed within the capital cost estimate.
The close proximity of the planned port loading facility to the ore stockpile (3.5km) provides a significant economic advantage through low transportation costs. The port will consist of a causeway extending about 160 metres offshore, allowing for two barges to be moored and loaded simultaneously.
The region in which the Agata project is situated, in northeastern Mindanao, hosts about 15 DSO operations at present that cumulatively exported 17.3 million wmt and 19.2 million wmt in 2011 and 2012, respectively.
www.mindoro.com or www.tvipacific.com