FYI Resources has edged closer to production at its high purity alumina project in Western Australia after completing a definitive feasibility study and securing equity financing with a European investment group.
FYI Resources has edged closer to production at its high purity alumina project in Western Australia after completing a definitive feasibility study and securing equity financing with a European investment group.
Shares in the company were up 9.62 per cent on the news to trade at 5.7 cents at 2:50pm AEDT.
FYI plans to mine kaolin from Cadoux, which hosts resources of 11.3 million tonnes, and process high purity alumina (HPA) at a proposed plant in Kwinana.
The DFS revealed project capex had risen to $US198 million ($A304 million), up from $US179 million ($A275 million) outlined in a 2018 preliminary feasibility study.
The project is forecast to have a net present value of $US543 million ($A834 million), up from the $US506 million ($A777 million) outlined in a 2018 preliminary feasibility study, with an internal rate of return of 46 per cent.
Forecast average annual earnings before interest, tax, depreciation and amortisation (EBITDA) has also increased from $US128 million ($A196 million) to $US133 million ($A204 million).
FYI Resources managing director Roland Hill said the outcome was within 5 per cent of results from the PFS.
“The DFS demonstrates that Cadoux has the merit to be developed as one of the sectors lowest capital and operating cost projects,” he said.
At the same time, FYI has secured a project financing facility with Luxembourg-based private equity group GEM Global Yield.
FYI said the equity was primarily targeted at capital requirements of the Cadoux project and would provide up to 30 per cent of its forecast capex.
The funding could also potentially represent all of the equity component required, FYI said.
It had been pursuing a number of financing options, including offtake agreements.
FYI said with the $80 million equity secured, other components of the overall financing needs would become more accessible.
Mr Hill said the financing was an outstanding achievement for the company.
“The financing facility assists in de-risking the project by providing access to equity funding at critical development stages,” he said.
“Sufficient equity financing is one of the larger challenges for a junior company; we intend to use this funding package to accelerate our development schedule.”
FYI said development of the project was expected to meet a forecast uplift in demand for HPA around 2022-24, as a result of projected electric vehicle growth.
Meanwhile, Emerald Resources has finalised a $US60 million ($A92 million) credit agreement with Sprott Private Resource Lending, as previously announced in June 2019, to help fund the development of its Okvau gold project in Cambodia.
The debt facility has also provided access to a $US100 million ($A154 million) acquisition and development facility to fund future opportunities for the project, Emerald said.
Managing director Morgan Hart said the company aims to become the first large-scale Cambodian gold producer by the second quarter of 2021.
Emerald shares were trading at 3.9 cents per share at 3:31pm AEDT.