Chaketma Scoping Study Confirms Strong Economic Potential
PhosCo has just released a scoping study confirming the long-life low-cost potential of its Chaketma phosphate project in Tunisia.
The study highlights solid economics, with an after-tax NPV10 of US$657M, IRR of 54% and payback of 1.5 years from commercial production.
“The Chaketma Phosphate project’s Scoping Study results are breathtaking,” PhosCo (ASX:PHO) executive director Taz Aldaoud said.
“The robust project economics confirm the potential to generate excellent financial returns over a long mine life of 46 years, and the capital expenditure of US$170M will be paid back in just 1.5 years.
“PhosCo has used a conservative long-term rock phosphate price of US$150/t to calculate a post-tax NPV of US$657M.
“By way of comparison, the World Bank has most recently reported a rock phosphate price of US$300/t.”
The project has a production target of 128Mt at 19.9% P2O5 for its mine-life, with the study considering low risk open-pit mining and processing to deliver 1.5Mtpa of high-quality concentrate at greater than 30% P2O5 and less than 1% MgO.
And the first 18 years of production would be from the KEL Resource with strip ratio of 3.6:1, scheduled from Measured (88%) and Indicated (12%).
However, the resource could support a higher production rate above 1.5Mtpa to match market demand – and nearby deposits have been identified for lower mining costs, including the SAB prospect.
There’s also the potential to direct-ship material in the higher-grade layer B early in project life, with simplified processing via single stage flotation and/or washing.
Plus, the company is also considering economies of scale – like an extension of a rail connection to the site for lower logistics costs.
Once the Chaketma Mining Concession has been received, PhosCo intends to study optimisation opportunities and to proceed to a Bankable Feasibility Study.
“These results confirm that the Chaketma Phosphate Project truly is world-class, but the work has not stopped there, with our technical team identifying several opportunities to optimise the project parameters even further,” Aldaoud says.
“The development of Chaketma will provide major benefits to Tunisia and its people.
“The Project is also being advanced at a critically important time, given the growing concerns globally around food security.
“With the Scoping Study now complete, the Company looks forward to commencing a BFS and progressing discussions with both the Tunisian Government and development and commercial banks.”
This article was developed in collaboration with Phosco Limited, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.