Venture Minerals (ASX: VMS) has reported that a new scoping study for its Mt Lindsay Tin/Tungsten Project in North-West Tasmania has confirmed a very robust and de-risked project, with a high margin per tonne and an excellent internal rate of return.
The new study has found that mining margins per tonne could increase by 300% to $80 per tonne, following the company’s latest resource estimate which includes the recently discovered high grade tin and tungsten zones at Mt Lindsay.
The scoping study assumes a one (1) million tonne per annum operation, focussed on the high grade zones within the Main and No.2 Skarns.
The study has found that capital expenditure can be cut in half to $130 million. It also delivers an internal rate of return of 55% (50% equity, 50% debt) and net cash per annum at full production of $80 million.
The study suggests a mine life of greater than seven years and tin production is estimated to be in the lowest cost quartile for current tin producers.
The company said the delivery of such a robust scoping study is the result of a series of exploration successes over the past 12 months, and compares very favourably to a previous scoping study released by the company in June 2009.
The discovery of broad, near surface, high grade tin and tungsten mineralization, within both the Main and No.2 Skarns, has dramatically changed the profile of the project, allowing the company to focus on a high grade, high margin mining operation.
The new study reveals the main driver for the project is now tin and tungsten with magnetite contributing less than 25% of the revenue.
With three commodities delivering revenue to the project, the company will be one of the lowest cost producers in the tin and tungsten industry, as well as being protected from individual commodity price risk.
Venture Minerals considers the new study to be a major milestone for the company, clearly demonstrating the long term economic potential of the Mt Lindsay Project.
With the successful completion of the scoping study the company will now commence a pre-feasibility study on the Mt Lindsay Project.
The study will include infill drilling on the Main and No 2 Skarns to increase the resource category to indicated, as well as additional work involving metallurgical, geotechnical, environmental, mining, ore processing and transport studies.
Hamish Halliday, managing director, said this announcement effectively lifts the trading halt that the company requested on Wednesday 12 May 2010.
The company is not aware of any reason why the ASX would not allow trading to recommence immediately.