Astron Corporation gains $2.68 million in backing for promising Donald project
Astron Corporation (ASX: ATR) has received firm commitments from a select group of private investors to raise $2.68 million to support its rapidly growing Donald mineral sands and rare earths project in Victoria.
Managing director Tiger Brown said the strong support for the share placement has highlighted the growing interest in the company’s recent exploration and development study successes at the Donald project.
“This placement shows continued strong support for Astron by sophisticated investors, allowing these funds to be applied towards the development of the Donald Project.”
Funds from the placement will be invested in progressing the Donald project, working capital and offer costs.
Growing financial strength
The successful new share placement builds on the company’s recent private placement of $7 million to Tan Ruiqing, the former vice chairman and one of the founders of Lomon Billions Group.
Mr Brown said Astron’s recent development activities have continued the strong progress the company has made at the Donald rare earth and mineral sands project, which is strategically located approximately 300 kilometres north-west of Melbourne in regional Victoria.
He said the company continues to advance what it believes is a tier 1 global mining project across a number of key areas, with a final investment decision (FID) the ultimate target.
Promising DFS release
The potential of the project was highlighted by the unveiling in April of a compelling phase 1 definitive feasibility study (DFS) which demonstrated an after-tax net present value (NPV) of $852 million over a 41.5-year mine life.
The phase 1 project study also estimated an internal rate of return (IRR) of 25.8%, with Donald forecast to generate $4.3 billion of free-cashflows, $13.0 billion of revenue and $6.1 billion of EBITDA over its mine life.
In a very active 2023, the company also recently updated ore reserves for retention licence area RL2002, the proposed site for phase 2 of the project.
The licence is now estimated to contain 516 million tonnes of ore at 4.6% heavy mineral sands which, when combined with the ore reserve estimate for permit MIN5532, brings the total ore reserves of the Donald project to 825 million tonnes at 4.4% heavy mineral sands.
Phase 2 studies
The company has also undertaken significant work on the proposed phase 2 development at Donald.
Phase 2 is planned to commence approximately five years following the commencement of the Phase 1 operations with a positive scoping study already completed for the second phase.
The next phase will include a duplication of the phase 1 project on the present retention licence RL2002 and include a mineral separation plant to take the heavy mineral concentrate to final zircon and titanium mineral products.
A PFS and ore reserves update for licence RL2002 is planned prior to the end of the current quarter.
Project upside identified
Mr Brown says the Donald project has the potential to become a globally significant, long-life supplier of critical minerals containing rare earth elements including neodymium, praseodymium, dysprosium, and terbium, as well as zirconium, hafnium and titanium.
The key features of phase 1 operations include the production of a heavy mineral concentrate containing zircon (80% of which is premium quality) and titanium minerals, as well as a rare earth element concentrate containing xenotime, which is a source of valuable heavy rare earth elements and monazite, which is a source of light rare earth elements.
The two concentrate revenue streams will be directed to different customers for varying end- use applications, providing revenue diversification and reduced cyclicality when compared to a single commodity project.
Open pit mining operations will be conducted with conventional truck and shovel by an independent contractor to produce 7.5 million tonnes per annum of ore for feed to an adjacent mining unit plant and then to a processing plant comprising spiral concentration and rare earth flotation.