Tasmanian poly-metallic deposit company Venture Minerals (ASX: VMS) has released an independent Scoping Study on the Mt Lindsay deposit with positive project results.
The study indicated a starting mine life of 7 years and generating $700 million in net cash from developing the Tin/Tungsten/Magnetite deposit.
One of the economic advantages of Mt Lindsay is that mining and processing costs can be amortised over the three commodities - delivering a higher profit margin per tonne mined.
Main parameters of the Scoping Study included:
- Annual Production - 4.4Mt
- Greater than 7 years of mine life
- Net Cash LOM (“Life Of Mine”) - $702 million
- Average Annual Operating Revenue - $241 million (at full production)
- Average Annual Operating Cost - $132 million (at full production)
- Average Annual Net Revenue - $109 million (at full production)
- Estimated Capital Expenditure - $255 million
- Internal Rate of Return - 30% (assuming 75% Equity 25% Debt)
However, the caveats to the Study are as important and provide potential for greater upside:
Less than 10% of exploration targets have been drill tested at Mt Lindsay. There is scope for a 10 - 15 year mine life for the Mt Lindsay Deposit. Importantly, the Stanley River DSO Project is not included in the scoping study.
Both the Mt Lindsay and Stanley River projects have exceptional access to existing infrastructure - Power, Road, Rail and Port - and the envy of many emerging producers. With three commodities, there is some partial protection versus one commodity price volatility.
Perhaps forgotten, with focus on three commodities is that Venture owns the third largest JORC compliant tin resource in Australia.
Venture will now complete a major drilling campaign over the coming months focussed on expanding the Mt Lindsay resource base and extending the potential mine life of the project. A full feasibility study will commence as soon as additional resource tonnes are defined.
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