Hastings Technology Metals has reported that capital costs of its Yangibana rare earths project are expected to be approximately $427 million, compared to the $335.3 million figure it outlined in its definitive feasibility study.
Hastings Technology Metals has reported that capital costs of its Yangibana rare earths project are expected to be approximately $427 million, compared to the $335.3million figure it outlined in its definitive feasibility study.
In a statement, Hastings said the cost increase was due in part to the company wishing to procure process plant equipment only from tier one suppliers when possible to provide the best equipment performance guarantees and field support.
The company also announced an expected $42 million dollars in increased salary costs compared to the DFS in November 2017.
Hastings said salary cost rise was a result of more large scale mining projects being approved and executed in Western Australia, which led to greater competition for specialist construction employees.
As a result of the anticipated additional costs since its DFS, the project’s estimated net present value decreased by 4 per cent since to $447 million, and its expected internal rate of return had fallen from 78 per cent to 28 per cent.
However, the company said cost certainty of the project had substantially increased with 54 per cent of the total pre-production capital in lump sum and fixed priced contracts near finalisation.
The Yangibana project is located 270 kilometres north-east of Carnarvon and has a probable ore reserve of 10.35 million tonnes.
The mine will produce a mixed rare earths carbonate that is rich in neodymium and praseodymium, which are critical materials used in the manufacture of permanent magnets used in electric vehicles, wind turbines, and other electronic consumer products.
Shares in Hastings were flat at 3.30pm AEDT at 16 cents each.