Alkane Resources (ASX:ALK) has signed an agreement with global minerals and metals processing technology supplier Outotec to conduct an Early Contractor Involvement process for the Dubbo Zirconia Project (DZP) in New South Wales.
This is a key step in development of the project and will aid compilation of the financing package.
DZP is expected to generate annual revenue of $580 million delivering EBITDA of $320 million and a 20-year NPV of $1.22 billion.
Capital expenditure required to bring the project into operation is about $1.3 billion including a contingency of $103 million.
Outotec (HEL:OTE1V), a €621.9 million (A$1 billion) market cap, was identified during the tendering process conducted during the front-end engineering design process as a preferred supplier for many of the processing packages.
The ECI seeks to identify further value opportunities for project execution, both in application of technology and cost reductions.
After the initial phase of the ECI, the intention is for Outotec to execute the process plant segment of the scope for AZL on an Engineering, Procurement & Construction (EPC) basis.
Discussions on the financing are advancing and are run in parallel and in conjunction with completing product off-take agreements.
Alkane remains well-funded with A$14.8 million in cash at the end of June 2015, along with A$4.8 million in bullion and no debt.
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