On 21 March 2019, mining and exploration company, King River Resources Limited (ASX: KRR) provided a Prefeasibility Study update on the company’s wholly owned Speewah Specialty Metals (SSM) Project, located in the East Kimberley of Western Australia. In the update, the company has provided Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) cost estimates of its Processing Facility and Acid Plants.
The company has estimated capital expenditure of A$359 million for its Processing Facility and A$580 million for its Acid Contact and Regeneration Plants. Further, the company has estimated operating expenditure of A$46.44/tonne mined for both Processing Facility and Acid Plants. Although the Opex is below the company’s initial target range but it will require additional costs added which includes mining, power plant operation, borefield water, tailing disposal, campsite, and product transport and sales. It should be noted that the CAPEX costings include a 20% contingency.
The company’s board is encouraged by these initial CAPEX and OPEX estimates, as they have fallen within the lower range of KRR’s initial target of US$650-750 Mn for a three-commodity project (V2O5, TiO2 and Fe2O3). These results will help the company in focusing on future test work and studies.
The Processing Facility comprises three main units- Beneficiation Circuit, Agitated Tank leach Circuit, Metal Recovery Circuit. The Sulphuric Acid Plant is the heart of the process plant which produces sulphuric acid, steam, and electricity to drive the entire process.
The company is investigating various strategies and trade-off studies to help further reduce the capital and operation costs which will be quoted at ±25% accuracy in the Prefeasibility Study of SSM project. The SSM project plan is to produce vanadium, titanium and iron products, along with other potential high-value specialty commodities.
One of the strategies that the company will investigate to reduce the capital and operation costs is regarding reducing the acid consumption which will include investigating shorter leach times, optimizing agitation, pulp density and grain size, and increasing the feed and concentrate grades and reducing the mass yield.
Following the release of this update, the company’s shares were placed in a trading halt, pending the company releasing an announcement regarding ASX queries and clarification of Capex and Opex information included in the Specialty Metals Project PFS update. The trading halt will remain in place until the earlier of the commencement of trading on Monday 25 March 2019, or when an announcement is made.
The stock last traded at a price of $0.029, up by 11.538% during the day’s trade with a market capitalisation of ~$32.2 million as on 21 March 2019. The counter opened the day at $0.027 and reached the day’s high of $0.030 and touched a day’s low of $0.027 with a daily volume of ~ 2,713,826. It had a 52-week high price of $0.190 and touched 52 weeks low of $0.026, with an average volume of ~1,139,306.
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