Perpetual Resources Ltd (ASX:PEC) has been granted a mining lease (M70/1406) for the Beharra High-Grade Silica Sand project, around 96 kilometres south of Geraldton, in Western Australia.
The mining lease covers a total area of 1,035 hectares and is coincident with the area that contains Beharra’s probable ore reserve estimate of 48 million tonnes at 99.6% silicon dioxide, 276 parts per million (ppm) iron oxide and 1,789 ppm aluminium oxide, that supports a 32-year mine life.
Investors have responded positively with shares as much as 18.2% higher intra-day to 13 cents.
The company released a pre-feasibility study (PFS) for the project in March which confirmed that Beharra end product achieved the lowest known impurity profile of any end product streams in the Mid-West region of Western Australia, which appear ideal for the burgeoning APAC Markets.
“Paves way for definitive planning”
The certainty of tenure clears the way for further development of the Beharra Project, which the company believes has the potential to become the leading Mid-West export silica sand project with the lowest known impurity profile.
Perpetual executive chairman Julian Babarczy said: “We are extremely grateful for the Government’s support in issuing the Beharra Mining Lease to Perpetual.
“This granted mining lease now paves the way for Perpetual to progress definitive planning and execution at our flagship silica sand project at Beharra, which, due to its low-level impurity profile, is in our opinion, shaping as the pre-eminent Mid-West export silica sand project.
“We eagerly await the upcoming white sand only testing results which have potential to further enhance what is already a highly compelling project and we look forward to updating shareholders in the coming quarter.”
Outline of granted mining lease (M70/1406) at Beharra.
Beharra Project metrics
The PFS also outlined compelling financial metrics that demonstrate the robustness of the project, which also affords expansion potential and the ability to respond to increases in market demand.
The PFS contemplates a 2 million tonnes per annum run-of-mine operation, producing 1.5 million tonnes per annum of saleable product per annum, which generates total life of mine revenue of A$5 billion and total life of mine EBITDA of A$1.7 billion, with modest start-up capital of A$39 million.
The Beharra project study also delivered an ungeared NPV10 of A$231 million and a compelling ungeared IRR of 55%.
White Sand test results pending
Additional testing undertaken by Perpetual on the white sand only horizon at Beharra has demonstrated the potential to significantly reduce the impurity profile under a white sand only mining and processing scenario.
The company recently completed an 86-hole drill program at the project aimed at confirming whether previous white sand only test results could be replicated in a representative testing scenario.
The testing program for the recent drill program is underway and is aimed at replicating the previously announced 300-kilogram white sand only laboratory tests which demonstrated that Beharra white sand could be upgraded, using only gravity and magnetic separation process methods, to 99.8% silicon dioxide and iron oxide content of 120 ppm.
The company believes that Beharra white sand could be suitable for the higher-priced and fast-growing solar PV-cell manufacturing industry, which requires low Fe2O3 silica sand.
The results are due in the third quarter of 2021, and once received, planning will commence for an updated Beharra pre-feasibility study that will form the basis for a feasibility study.