The smart cookies over at Hastings Technology Metals have revised the company’s Yangibana project development strategy to not only further de-risk the project, but also enable a much quicker pathway to cashflows.

Wary of increased project budget costs, Hastings Technology Metals (ASX:HAS) has crunched the numbers and produced a two-stage development strategy that will provide the company with immediate cash flow in Q1 2025 and support the development of second-stage project development.

At a contingent cost of $470m, Stage 1 will focus on the construction of the Yangibana mine and beneficiation plant to produce 37,000 tonnes per annum (tpa) of REE concentrate at 27% TREO which will be trucked from site during Q1 2025.

The Staged 1 cost increase largely reflects inflation, project refinement, design growth and third-party conditions.

Alone, the Yangibana mine and beneficiation plant will provide a post-tax net present value of $538m with an internal rate of return (IRR) of an impressive 27.54%.

The real juice will come from the completion of Stage 2, the development of a hydrometallurgy plant at Onslow that will produce 15,000t of REE carbonate up to a TREO grade of 59%, and has been pegged to provide a post-tax NPV of $1.018bn at an IRR of 50.93%.

Importantly, Stage 2 funding will be able to be funded by cashflows from Stage 1, meaning the 44% increase to $948m for the overall project cost is astutely mitigated.

Following the announcement, analysts at Macquarie have maintained their outperform rating for the Yangibana Project, stating that the decision to stage the development was sensible and materially reduced Hasting’ pre-production funding requirements. They also noted the updated capex estimates were only marginally higher than they’d anticipated.


ASX HAS Hastings
Hastings is looking to make Yangibana Australia’s next major rare earths producing mine. Pic Supplied (HAS).


Smartly-backed strategy

The strategy is smartly backed by fixed-price construction contracts to avoid further cost blowouts and Hastings has signed on GR Engineering in a $210m deal to immediately start work on the construction of the beneficiation plant once the full-form contracts are processed.

Two-thirds of production from Yangibana is already consigned to industrial heavyweight Thyssenkrupp AG, with discussions on further offtake agreements for the Stage 1 concentrate already in the mix.


Advanced greenfield REE project

“The Yangibana rare earths project is one of the world’s most advanced greenfield rare earth projects and is well-timed to meet the forecast supply gap for magnet rare earth elements which are required to support the global transition to clean energy,” Hastings Executive Chairman Charles Lew said.

“A comprehensive project review undertaken by our new experienced management team has confirmed that this world-class project remains financially and operationally robust, with the investment in a Stage 1 mining and beneficiation plant being a compelling proposition.

“The implementation of a two-stage development strategy for Yangibana will lower the upfront capital funding requirements, reduce the project execution risk and enable a faster pathway to early project cash flows which can be used to fund Stage 2 plant construction.”

Early infrastructure works at Yangibana are in the final stages, with the arrival of the maiden flight at the new airstrip earlier this month.

Funding to support Stage 1 is well underway, with the Northern Australia Infrastructure Facility committing to a $220m loan together with another $150m in commitments from financial lenders.

A finalised project funding package will be completed by the end of September this year.



This article was developed in collaboration with Hastings Technology Metals, 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.