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Metallica Minerals’ study supports development of bauxite project

Metallica Minerals (ASX:MLM) has successfully completed an independent pre-feasibility study (PFS) supporting the development of the Urquhart Bauxite project in Queensland’s Cape York.

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Metallica Minerals’ study supports development of bauxite project

The company’s shares were last trading at $0.053, up 15.22% intraday.

Metallica’s PFS estimates pre-tax project net present value of $78.4 million on sales of 6.5 million tonnes of bauxite (proved and probable reserves).

The PFS base case points to a potential revenue stream nearing $300 million across 5.5 years of production with a payback period of just five months.

The project is expected to generate a strong total operating margin of around $12 per tonne.

Metallica has a 50% share of the Urquhart Bauxite joint venture and plans to develop it via a contractor model so as to minimise mine start-up capital and maximise returns.

The joint venture is in the process of negotiating a mining and haulage contract with an appropriately qualified contractor.

The high-margin bauxite in Area A of the project is slated for first production in Q2 2017.

Metallica is targeting a production rate of 1.5 million tonnes per annum by 2019.

The company had a cash balance of circa $1.5 million as at 30 September 2016.

Quick facts: Metallica Minerals Limited

Price: 0.048 AUD

ASX:MLM
Market: ASX
Market Cap: $15.55 m
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