It’s all adding up for RareX: Cummins Range scoping study returns attractive NPV and IRR
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With an NPV of $633m, 29% IRR and payback of 2.8 years, the study demonstrates a viable project and provides the board with confidence to approve a pre-feasibility study, set to begin this quarter.
The Cummins Range Rare Earths Project in the Kimberley region of Western Australia holds a mineral resource containing 18.8Mt of 1.15% TREO and 9.91% P2O5 with a high neodymium and praseodymium content of 20% at a 0.5% cut off.
Monzanite is the most well understood and processed rare earth mineral in the world and is the primary rare earth mineral at the project, which comprises neodymium and praseodymium (the magnet rare earths), appreciable amounts of scandium and niobium and, additionally, a significant grade of phosphate.
RareX (ASX:REE) is actively investigating ways in which it can develop Cummins Range in a manner which is carbon-neutral or produces minimal carbon emissions.
Not only is the facility to be largely powered by hydroelectricity, the phosphate by-product will be used in the agricultural sector – much of it locally – increasing crop yields.
Longer term, the facilities layout has the potential to support electrified vehicle fleets charged from hydroelectricity and the remaining diesel use at site can be transitioned to full electrification over time given appropriate renewable energy installations.
Although these longer-term goals are not currently priced into the study, REE managing director Jeremy Robinson says the scoping study highlights the Cummins Range Project could become a world leader in the application of low carbon energy solutions to rare earths projects.
Based on current 2021 indicated and inferred Resources, with 85% of the mine plan in the indicated category, Robinson adds there is good potential for the project to grow in scale within the next 12 months.
This article was developed in collaboration with RareX, 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.