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1st stage of Alufer's 30Mtpa bauxite development plan
Stage 1: Bel Air Project
- 12 month construction period
- Peak production from Bel Air of 10.3Mtpa
Stage 2: Labe Project
- Develop the 2.5Bt Lab project using cashflows from Bel Air project
- Labe has high grade areas with 583Mt @50% Al2O3 and 3% SiO2
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HONG KONG, Nov 17, 2014 - (ACN Newswire) - Alufer Mining Limited ("Alufer" or the "Company"), the leading bauxite exploration and development company, is pleased to announce the completion of the bankable feasibility study ("the BFS") at the Bel Air Project. Construction of the Bel Air Mine is the 1st Stage in Alufer's plan to produce 30Mtpa to meet the growing bauxite needs of China's refineries.
Alufer plans to start construction on the Bel Air Project in March 2015 with first production expected in January 2016. Production will start at 4.8Mtpa, increasing to 10.3Mtpa.
Stage 2 will be the development of the Labe Project which has a 2.5 billion tonne JORC resource. This includes high grade areas with 583Mt @50% Al2O3 and 3% SiO2 (low silica). Once construction has been completed at both sites, Alufer will be able to provide 30Mtpa of high quality bauxite to Chinese refineries for over 20 years.
Bel Air Project Highlights:
- A technically robust open-pit project that offers low capital and operating costs, rapid payback and strong financial performance at current bauxite prices;
- Twin development strategy allows fast track to 4.8 Mtpa production for immediate cashflow generation;
- 12 month initial construction phase; first production targeted for January 2016;
- Ramp up phase to 10.3 Mtpa maximises throughput and reduces operating costs without disruption to production; and
- Includes development of dedicated export loading jetty infrastructure for transhipment of Direct Shipping Ore ("DSO") to Capesize or Panamax vessels.
Bel Air Economic Highlights:
- Post-tax internal rate of return ("IRR") of 72%;
- Post-tax net present value ("NPV") of US$766 million (at a 12% discount rate);
- Initial construction capital requirement, including financing costs, of US$110 million;
- Peak fundraising requirement of US$120 million with post-commercial production capex largely funded by internal cashflows;
- LOM cash operating costs of US$22/tonne free on board ("FOB"); and
- Breakeven price, including working capital, in-country taxes and royalties of US$25/tonne FOB.
Danny Keating, CEO, commented:
"The BFS economics have confirmed the Bel Air project to be the industry's pre-eminent undeveloped bauxite project. Bel Air's potential scale demonstrates it will be a significant producer providing a high quality product to the market in the near term. The Project is technically straightforward and can be fast tracked to production with just 12 months of construction. With very low capex and opex requirements, combined with immediate cashflow, the Project is economically resilient and has competitive advantages over alternative sources of supply.
In combining the near-term Bel Air Project with the world class resource base at the Labe Project, we believe that Alufer is perfectly positioned to be a core part of the solution to China's bauxite requirements for the next 20 years."
Project Overview:
The Bel Air bauxite project is located 15 km from the coast near the Cap Verga peninsula, 120 km north of Guinea's capital, Conakry. For the past four years Alufer's strategy has been to rapidly advance the Bel Air project into production to capitalise on the strong fundamentals of the bauxite market. To date, Alufer has completed the Project BFS, the Social and Environmental Impact Assessment ("SEIA") and in September 2013, it was granted the Exploitation Licence (Mining Title) for Bel Air Mining Ltd.
Bel Air has defined reserves and resources for a premium quality, tri-hydrate DSO. The ore lies at surface and will be mined by surface miners, then trucked down a haul road to the coast for loading onto the transhipment barges at the dedicated export loading jetty at Cap Verga. DSO will be loaded onto Capesize or Panamax class ocean-going vessels for delivery globally to China, Europe and North American customers.
The development of the Project will be separated into two phases; an initial 'rapid production' phase based on a shorter causeway with semi-automated barge loading; this has a 12 month construction period including mobilisation. Without disrupting production, the causeway will be widened and extended and an automated materials handling unit will be added in order to increase throughput to 10.3 Mtpa, reducing the overall operating costs. The 'ramp-up' phase only requires incremental investment and, at current bauxite prices, will be almost entirely financed by the cash flows generated by the 'rapid production' phase.
Bel Air enjoys strong support from local communities and national Government. The Project will have a material positive impact on Guinea's GDP creating over 500 permanent jobs and provide significant tax revenues for the Government's social welfare programmes.
Technical Overview:
Mining & Hauling
Following detailed investigation, the use of surface miners has been selected as the optimal mining solution for Bel Air. By utilising surface miners rather than a drill and blast methodology, the dilution and mining loss can be minimised, the primary crushing requirement can be significantly reduced and, importantly, there is an improvement in geotechnical conditions.
The surface miners will mine, crush and load ore onto 40 tonne Articulated Dump Trucks ("ADTs"), which will transport ore to temporary transfer stockpiles and waste to permanent waste dumps. Mobile stackers will be utilised to automate the management of the ore transfer stockpiles. Dedicated 65 tonne long haul trucks will transport ore along the purpose-built haul road to the export facility run-of-mine ("ROM") tip.
Transhipment & Stockpiling
In the initial phase, stockpiled ore will be loaded onto 40 tonne ADTs for transport along the causeway to the barge berth. Ore will be tipped into two shiploader feed bins located parallel to the berth and loaded onto transhipment barges through a semi-automated mobile shiploader (conveyer boom feeder). As part of the ramp-up phase, a fully-automated causeway conveyor will be installed to feed a longitudinal shiploader at design capacity of 5,000 tph.
Multiple Berth Export Facility
The optimised solution for delivering rapid production, globally significant bauxite output and low operating costs requires the construction of a multiple berth export facility. Initially the causeway will be developed to sufficient depth to allow tide-assisted loading of transhipment barges via a mobile barge loader. The widening and extension of the causeway will continue without interrupting production until the continuous loading of transhipment barges is possible. There will be an export conveyor, tripping conveyor and longitudinal shiploader built on the expanded causeway with an additional throughput capacity of 5.5 Mtpa.
Transhipment Operations
The shallow marine conditions at Cap Verga require transhipment to load ocean going vessels ("OGVs"). The transhipment operation has been designed for the loading of both Panamax and Capesize vessels, similar to the practices employed in the iron ore and thermal coal markets. For Bel Air, a contractor transhipment solution has been developed, with specially designed floating cranes, tugs and barges. By utilising this equipment, Alufer will be able to load Capesize vessels without incurring large demurrage costs and this will offer a considerable economic advantage over projects that are only able to load smaller Panamax vessels.
Financial Overview:
The Project will fast track to production within 12 months, initially at 4.8 Mtpa ramping up to 10.3 Mtpa utilising the internal cashflows of the business. The increased throughput will also significantly reduce operating costs through greater economies of scale and improved levels of automation of the haulage and export process. The Project has a peak fundraising requirement of US$120 million with post-commercial production capex being almost entirely funded from project cashflows. This is significantly less than other pending bauxite mine development plans, with the key advantage being the Project's proximity to the port and its simple mining methodology. The key financials are shown below:
Initial construction capital: US$ 66.5 million
P&Gs: US$ 24.7 million
Peak project fundraising requirement (nominal): US$ 120 million1
Total LOM Operating Cost (10.3Mtpa): US$ 22/tonne (FOB)
NPV: US$ 766 million1
IRR: 72% (1)
(1): Based on average bauxite price of US$70.2/t CFR China
Ebola Virus Update
The situation in Guinea continues to be severe and Alufer is responding by supporting the efforts of the WHO and Medecins Sans Frontieres ("MSF"). To date the Company has implemented all precautions as prescribed by the WHO/MSF.
The Project construction and implementation schedule currently requires 'boots on the ground' by March 2015 and this could be impacted by the Ebola virus. The extent of any delay to the Project is a function of the timeframe taken to bring the spread of the disease under control. In the meantime, Alufer will lay all the groundwork to enable immediate commencement of the construction phase as soon as is practicable.
The Labe Project
The Labe Project is one of the world;s largest, high quality bauxite resources. The Project is located inland in Central Guinea and forms the 2nd stage of Alufer's 30Mtpa bauxite development plan. Alufer was granted the Exploration licence at Labe in September 2010 and has since completed 11,130m auger drill programme on 600m and 300m grids, a 252m core drill programme and analysed over 13,000 samples by XRF, with about 20% put through a bomb digest process.
From this, Alufer has defined a high grade JORC compliant resource of 583Mt at 50% Al2O3 and 3% SiO2 from a total resource of 2.5Bt at 43% Al2O3. To date only 25% of the Exploration Licence area has been explored and significant exploration potential remains across the rest of the licence area.
An Engineering Concept Study, including detailed railway and logistics assessments, has been completed and demonstrated the Project to be economically viable, with significant synergies from using the Bel Air infrastructure. A Pre-Feasibility Study will commence in 2015, in conjunction with a new drilling programme.
Contact:
Alufer Mining Limited
Danny Keating, CEO
+44 (0) 7799 214 083
danny.keating@alufermining.com
Tavistock
Jos Simson / Emily Fenton
+44 (0) 207 920 3150
Topic: Press release summary
Source: Alufer Mining Limited
Sectors: Metals & Mining, Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
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