Nolans to start production in 2019
ARAFURA Resources has provided more detail on the development timeline for its Nolans rare earth project in the Northern Territory, forecasting production to start in 2019.
The site of Arafura’s Nolans project in the Northern Territory.
The new update came with the release of the Nolans development report, which will form the backbone of the project’s definitive feasibility study.
Arafura had always expressed an intention to start production at Nolans before the end of the decade, and previously foreshadowed a target around 2018 or 2019.
Today’s report is the first time it has outlined a solid timeline.
“Nolans remains on track to become a significant supplier of rare earths when it comes online in the latter part of this decade,” Arafura managing director Gavin Lockyer said.
“Importantly, the project’s production start coincides with a projected supply shortage of magnet-feed and other critical rare earths in which Nolans is particularly well endowed.”
The development report included a number of key metrics for Nolans previously released to the market, including a capital cost projection of $A1.4 billion and net present value of $2.04 billion.
The internal rate of return is expected to hit 21.4%, with payback being achieved in the fifth year of operations.
“This is a strategically important report for Arafura that supports our offtake and funding discussions with a number of parties,” Lockyer said.
The Nolans DFS is due for completion in mid to late 2015, and will incorporate results from ongoing optimisation work.
The study will be progressed alongside other key activities, including permitting, flow sheet validation and test work, and confirmation of early sales agreements.
Arafura shares were last trading 1.3% higher at 7.8c.
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