Astron Corporation confirms world class size of Donald project

Astron Corporation (ASX: ATR) has unveiled a significant 15% increase in an updated ore reserve estimate for the world-class Donald rare earth and mineral sands project in Victoria.

The company also confirmed an ore reserve for retention licence RL2002, which is the proposed site of Phase 2 of the Donald project, of 516Mt at a 4.6% heavy mineral (HM) grade containing 23.7Mt HM.

The RL2002 numbers, which include reserves from the Jackson and Donald deposits, comprises a proved ore reserve of 152Mt at 5.6% HM and a probable ore reserve of 364Mt at 4.1% HM.

The updated ore reserves estimate for Donald brings the total ore reserve for the deposit to 825Mt at 4.5% heavy mineral (HM).

The ore reserve for the Donald deposit has increased by 15.1%, whilst the HM reserves have increased by 15.2% to 36.9Mt.

Significant commercialisation milestone

Donald is now clearly positioned as a globally significant source of critical minerals, including the third largest rare earth minerals resource outside of China and the largest zircon resource globally.

Managing director, Tiger Brown, said the release of the RL2002 ore reserves is a significant milestone in the commercialisation of the Donald Project.

“This is an important step beyond Phase 1, for which an ore reserve, DFS and detailed project economics have been previously announced, and confirms its unique reserve and resource position.”

“This ore reserve upgrade, in association with the Phase 2 PFS, underpins the physical and financial robustness of future phases of the Donald project and, in conjunction with Astron’s technical background, is expected to lead to additional value realisation through the establishment of a vertically integrated critical minerals supply chain from resource to processed products.”

The company says current reserves already underpin commercial production for at least 58 years.

Mr Brown said Phase 1 and Phase 2 of the Donald Project represent a multi-generational opportunity at an advanced, globally significant critical minerals project located just 300km north-west of Melbourne.

“The upgraded ore reserve for RL2002 brings the Donald deposit into the reserves category, whereas the Jackson deposit, for which a mineral resource has been estimated, represents further project upside potential from future development opportunities including production expansion and downstream processing.”

“This reserve and resource position represents an ideal basis for Astron to explore and evaluate downstream opportunities in advanced materials and chemicals manufacturing in the rare earths, titanium, zirconium and hafnium industries.”

Environmental permits in place

Apart from its world-class size, Phase 1 of the Donald project also benefits from being favourably assessed Victorian Environmental Effects Statement (EES), a concluded Federal Environmental Protection and Biodiversity Conservation (EPBC) Licence and a granted Mining Licence (MIN5532).

The updated ore reserve estimate is also supported by a Phase 1 project definitive feasibility study (DFS) which was announced in late April.

The company is preparing to kick-off planning for the Phase 2 development immediately following the commissioning of the Phase 1 project with the objective of obtaining the requisite regulatory approvals, leading to the final investment decision (FID) for the project being made towards the end of calendar year 2028.

Phase 2 construction is currently scheduled to commence in CY29, with commissioning and the start of commercial operations towards the end of CY30.

Studies have identified robust economics for the combined Phase 1 and 2 project, including a post-tax real NPV of $2.2 billion at an IRR of 30.3%.

Donald is forecast to generate $13.4 billion of free-cashflows, $39.0 billion of gross revenue and $20.8 billion of EBITDA over its 58-year mine life.

Cashed-up for future work

In mid-May, Astron received firm commitments for a $7 million placement to well-known specialty metals investor, Tan Ruiqing.

Mr Ruiqing is a former vice chairman and one of the founders of Lomon Billions Group, a leading high-performance titanium dioxide pigments and zirconium chemicals manufacturing company with more than 30 years of experience in the global mineral sands and downstream markets.

Astron confirmed that the placement funds would be applied towards the next steps in the development of the Donald Project, including front end engineering and design (FEED).

The company said it will also invest capital into its offtake agreements negotiations.