Global borate trends prompt American Pacific to increase mine size
American Pacific Borate and Limited (ASX:ABR) has provided an update on its progress as it seeks to complete the DFS for its Fort Cady Borate Project in Q4, CY2018.
Major milestones completed in the current quarter include:
- Bulk sample from onsite testworks sent to equipment manufacturers to enable completion of flow sheet and capex estimates.
- The decision to increase the targeted scale of the mine to include a third phase, financed through cash flow, to take advantage of the upgraded JORC compliant Mineral Resource Estimate, positive trends in the global borate market, the company’s approved railroad spur under its current mining permit, and the company’s ability to sell by-product gypsum into the Californian agricultural and industrial markets.
This third phase adds to the December 2017 Scoping Study that targeted steady state production of 246k tonnes of boric acid per annum over a two phase construction with phase two to be funded from cash flow.
- The approval to commence construction from the Mojave Desert Air Quality Management District.
ABR’s CEO and Managing Director Michael Schlumpberger commented on today’s update: “Our decision to increase our target mine size to include a third phase is supported by: the size of our Resource; positive borate market trends; our permitted railroad spur providing the necessary logistics solution for an increase in production; and our ability to sell by-product gypsum and sulphate of potash (SOP) into large Californian agricultural and industrial markets.
“Demonstrating our ongoing intent to accelerate Fort Cady into production, we have delivered further milestones of bulk samples from on-site testworks being sent to equipment vendors and the approval from the Air Quality district to enable the commencement of construction.
“The relatively quick approval from the Air Quality Management District highlights the support from the authorities in California and brings us one step closer to developing the project,” he said.
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Fort Cady Borate Project — DFS progress
The convergence of the following factors has resulted in the company making the decision to incorporate a third phase into its targeted mine:
- a large multi-generational borate Resource (JORC compliant MRE of 120m tonnes at 6.5% B2O3, or 11.6% boric acid (H3BO3) for 13.9m tonnes of contained boric acid, the company’s Fort Cady Borate Project hosts the largest known contained borate JORC or NI43-101 Mineral Resource Estimate in the world not owned by major borate producers Rio Tinto and Eti Maden);
- a brilliant railroad dominated logistics’ solution (current mining permit allows a 3km to 4km rail spur from the main national railway line running close to the Project boundary);
- large by-product markets in California for agricultural and industrial gypsum and SOP consumption supported in part by the railroad logistics’ solution; and
- a borate market growing at up to6%CAGR with limited additional supply capacity outside of Turkey.
This additional third phase, expected to be financed through cash flows, is currently being incorporated into the upcoming DFS.