Australia’s next rare earths producer Hastings Technology Metals Ltd (ASX: HAS) announces significant progress on, and improved project economics for, its Yangibana rare earths project in Western Australia’s Gascoyne region.
Yangibana is on track to become Australia’s next new significant rare earths project, with targeted first production in the September 2024 quarter.
The highlights of the updated project economics and progress include:
- Post-tax Net Present Value increases by 84% to $1,012 million;
- Post-tax Internal Rate of Return of 26%;
- Life of Mine pre-tax Free Operating Cashflow increases by 71% to $4,376 million;
- Revised capital cost estimated at $582 million (including contingency is $658 million). Yangibana is ‘shovel-ready’ following a comprehensive review and assessment of current inflationary pressures present in Western Australia;
- Capital payback period forecast at 2.7 years from commencement of production;
- Production of 3,400tpa of NdPr oxides, capable of supplying up to 8% of forecast global NdPr demand;
- Discussions on funding options with suitable partners continue to progress; and
- $20 million early works program to deliver the core site infrastructure at Yangibana is well underway.
The updated project economics, based on a definitive feasibility study completed by Hastings in 2017 and revised in late 2021, follow an extensive and comprehensive review period, extending over three years, which has sought to de-risk project execution, optimise the flowsheet and enhance project economics. Key to this process was validating the capex required to bring Yangibana into operation considering the current inflationary environment and tightening labour market in Western Australia.
“Today is a significant milestone for the Hastings team that is the result of an extensive amount of work carried out over a number of years,” executive chairman Charles Lew said.
“The updated project economics tell a story of a world-class rare earths project that will be capable not only of delivering up to 8% of global NdPr demand for a period of at least 15 years but generate significant, long-term value for all shareholders.
“The Hastings team has done a tremendous job since 2017 to optimise and de-risk the Yangibana project, both technically and commercially, to make it an even more compelling investment proposition.
“Since its discovery in 2014, we were always confident in the quality of the rare earths resource endowment at Yangibana. As it turned out, the steady progress we have made over the years has converged with a strong global rare earths magnet market underpinned by the global energy transition and electric mobility. As the updated project economics demonstrate, Yangibana will be a financially and operationally robust, long-life project.
“We are well advanced on discussions with a range of funding partners (in addition to NAIF) and are now focused on finalising the appropriate capital structure that best positions Hastings for success in bringing Yangibana into production by 2024. This includes undertaking a corporate transaction or seeking a joint venture partner(s).”
