CXX chairman on Panda Hill DFS: “numbers speak for themselves”
Cradle Resources (ASX:CXX) thinks its Panda Hill project will make $US122 million ($A156.4 million) a year before taxes for a total of 30 years.
It has the results of a definitive feasibility study on its Panda Hill niobium project back, and it’s told its investors that the project will have an annual EBITDA figure of $122 million, based on a project with an upfront capital cost of $196 million and production of 5400 tonnes of niobium per year.
The DFS is the latest step in the process of getting the Panda Hill project up and running, with CXX having previously focused on the ability to produce a saleable product from its ferrous niobium ore.
Still to go in the process are securing an offtake agreement and financing for the project – which is why no particular start date on the project has been offered as yet.
CXX has envisioned the project being a stepped process, whereby the first four years of plant throughput of 1.3 million tonnes per annum, and then scales up to 2.6Mtpa after the first for years of operation.
The scaling up process will be funded by the production in the first for years of production.
The post-tax net present value on the project has been pencilled in at $542 million for the first stage, with that to increase to $1.02 billion in the second phase.
It also pegged the post-tax internal rate of return at 27%.
For the economics of the project, CXX assumed a $37.56/kg niobium price – which is an amalgam of two desk prices.
CXX told investors that the first stage of the project would chew up 6% of niobium production, but with demand forecast to increase by 3-4% per year it would not be taking a huge chunk of the market growth.
Its chairman Craig Burton told investors that the company didn’t need to say too much about the project now the DFS was out.
“The numbers speak for themselves,” he said.
“This will be the first new niobium producer in 40 years and the only new producer of this rare metal in the foreseeable future.
“The demand for niobium continues to grow strongly due to the burgeoning worldwide demand for new-age materials and associated elements like lithium, graphite, and niobium. Panda Hill is only seeking to capture a modest portion of this ongoing demand growth.”
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.