Emerging phosphate producer Centrex Metals (ASX: CXM) has secured a second sales deal for its flagship Ardmore project in Queensland’s north-west.
Leading New Zealand-based fertiliser group Ballance Agri-Nutrients has agreed to purchase 5,000 wet tonnes of phosphate rock concentrate from Ardmore.
The deal comes after Ballance trialled 400wt of Ardmore’s run-of-mine ore to produce a single superphosphate.
Ballance will now trial the 5,000wt of phosphate rock with its current import blend, with the view to the parties establishing long term offtake contracts.
“The company is very pleased to be partnering with one of New Zealand’s leading fertiliser producers in Ballance,” Centrex chief executive officer Simon Slesarewich said.
“The contract validates the quality of Ardmore’s product and its attractiveness to target customers.”
Ardmore phosphate project
Ballance will purchase the 5,000wt of concentrate that Centrex plans to begin producing later this year as part of its trial operation.
A 70t per hour modular wet processing plant is currently on its way to Ardmore and is upgradable to the 140tph for the proposed 800,000wtpa full scale operation.
An optimised definitive feasibility study was completed on Ardmore during the March 2019 quarter that estimates capital start up costs of US$49 million (A$70.55 million) for a 10-year operation, with full scale production scheduled to begin in 2021.
The study also estimates a pre-tax net present value for the project of $269 million with a 63% internal rate of return.
Payback is estimated to be completed in 1.8 years, with net cash flow of $561 million, based on a forecast average sales price of $214/t and operating costs of $138/dmt.
Centrex is also in ongoing discussions with a number of potential long-term offtake customers regarding trial shipments of Ardmore phosphate.
All up, the company plans to send out up to 30,000t of trial shipments during 2019.
Shares in Centrex shot up 10% in early morning trade to reach $0.11.