Mining

Heavy Minerals reveals robust garnet economics from Port Gregory scoping study

Go to Imelda Cotton author's page
By Imelda Cotton - 
Heavy Minerals ASX HVY Port Gregory Garnet project scoping Study preliminary economic assessment

Heavy Minerals aims to produce about 141,000t of garnet and 6,000t of ilmenite from Port Gregory annually.

Copied

A scoping study and preliminary economic assessment for Heavy Minerals’ (ASX: HVY) Port Gregory garnet project in Western Australia has confirmed a $253 million after tax net present value and a forecast $1.59 billion life-of-mine revenue over 16 years.

The study demonstrated the technically-simple and robust nature of the project as well as the significant potential economic value which would result from a future development.

Key highlights included a low $110 million capital expenditure requirement due to the project’s proximity to the town of Geraldton and existing infrastructure; and low operating expenditure and high margins due to simplistic and standard processing requirements to achieve an average annual production of 141,000 tonnes garnet and 6,000t ilmenite.

The after-tax internal rate of return has been estimated at 33%, while after-tax free cash flow is expected to be $588 million.

Heavy Minerals chief executive officer Nic Matich said Port Gregory was shaping up to be a long-life, economic mining operation.

“The scoping study results highlight the robust nature of this project and bodes well for the future, as we look to potentially transition to the development stage,” he said.

“With a second phase of drilling currently being planned, the next few months should put us in a position to conduct a feasibility study and progress offtake discussions with interested parties.”

Garnet market

Mr Matich said the primary constraint on the study related to the quantity of final product (garnet) which could be placed in the market given supply-demand forecasts researched by TZ Minerals International.

The garnet market is believed to be demand-driven and Heavy Minerals has taken a conservative approach with sizing the processing plant at Port Gregory to minimise excess production.

“Significant upside potential does exist should garnet demand increase or if offtakes exceed the proposed output of the plant,” Mr Matich said.

“The plant has been designed in such a way that additional throughput could be achieved via modularised additions.”

Port Gregory project

Port Gregory comprises six tenements across 227.28 square kilometres of land north of Geraldton.

It has a mineral resource estimate of 135Mt grading 4% total heavy minerals (THM) and 4.9Mt contained garnet.

The project will process mineralisation from surface or with limited overburden removal via conventional dozer trap mining from shallow pits to produce a slurry which will be pumped to a wet concentration plant.

A heavy mineral concentrate will be produced by processing sand fraction through a series of gravity spirals and up-current classifiers before being transferred to a dry mineral separation plant, where it will be further upgraded by removing material via magnetic separation.

The magnetic concentrate is dominated by ilmenite and will form a valuable by-product, which will attract about $640/t sold.

The garnet material will then be screened, bagged and shipped to Geraldton port for transport to overseas markets.