ENP Newswire -
Release date- 24072014 - The Directors of
The Company's key asset is the large scale Abu Dabbab tantalum-tin-feldspar deposit in
The key focus for the
An investment strategy has been developed whereby the Company is seeking to attract investment funds through divestment of a portion of
In early April, the Company relocated its head office in
The Company borrowed a further
Cash on hand at the close of the Quarter was
2. ABU DABBAB TANTALUM-TIN-FELDSPAR PROJECT (50% INTEREST)
The Company continues to work through a Project development and financing strategy centred around a 'low-capital' development model utilising contractors and suppliers to undertake activities such as mining, crushing and screening the ore and supplying water, power and other services on a 'through the fence' basis. During April and May negotiations with preferred supplier and contractor groups continued and the tendered prices have been utilised by
Running in parallel with this process,
Whilst the estimates are to a feasibility study standard according to Lycopodium, the summations do not represent estimates to complete the entire project; these are 'work in progress figures'. However from a capital cost perspective, given the intent to utilise contractor mining services, they do represent the majority or the core of the expected total expenditure.
The key omissions are capital and operating cost estimates related to mining and smelting. The Lycopodium scope did not include review of the mining plan or the construction or utilisation of an onsite smelter as explained below:
Mining: There appear to be many opportunities to improve on the existing mine design and schedule and with the involvement of a local mining contractor, the Company considered there was little value in undertaking this process prematurely.
Smelting: In regard to the smelter,
Aside from the deferral of capital, the Company considers that there may also be opportunities to install a smelter closer to power, labour and transport hubs rather than at the Abu Dabbab site where all of those inputs come at a considerable cost premium. Discussions with potential toll smelting groups include secondment of TE personnel for training and supervision purposes.
Capital Cost Estimates
Comparison of the 2008 FS with the 2014 PPFS indicates an overall escalation in the capital costs covered, of
The impact was to remove
Operating Cost Estimates
This does not include the mining or smelting costs which may be undertaken on a contract or toll basis but does include the cost of running the various utilities.
There is a significant
The move to outsourcing is regarded as an important 'de-risking' strategy, however it does not mitigate the ongoing exposure to fuel prices via international price movements or changes to Government fuel subsidies. As with the capital cost estimates, given the move toward outsourcing various inputs such as power, water, mining and feed preparation, these figures are indicative and regarded as 'work in progress' subject to completing the final feasibility study.
Reduced power consumption through design improvements has the potential to reduce operating costs significantly as power accounts for 50 to 55 % of the total operating cost;
Improved recovery of fine grained Ta and Sn minerals as 50% of the Sn and Ta report to the minus 38 micron size fraction and
Reduction in the use of desalinated water, by using raw seawater for dust suppression and possibly process water.
A complete definitive feasibility study still needs to be completed to bring together an updated mine plan, potential toll smelting agreement, the various supplier and contractor tender pricing and to verify the savings indicated above as well as to update several outstanding statutory project permit requirements. The new technical team has also identified several opportunities to optimise the process flow sheet which may lead to further cost savings.
These opportunities remain 'on the radar' and might be incorporated into the final definitive feasibility study subject to the completion of the financing and collective view of the TE Board in regard to the risk of further technical distractions delaying the project development. Having now updated to a feasibility study standard the 'core' of the project expenditure for the 2 Mtpa case, this provides a very solid platform from which to systematically plan further work to add value to the development case and complete a fully integrated feasibility study within a short time frame.
3. ALLUVIAL TIN OPERATION (50% INTEREST)
Mining of the alluvial tin deposits at Abu Dabbab was completed in late
In mid-April, given the poor operational performance treating the tailings material, suspension of concentrate exports and the delays in importing the crushers, management elected to suspend Spiral Plant operations pending resolution of the export permit issues and a review of restarting operations to treat the 81,000 tonnes stockpile.
Following the reinstatement of the import-export permits on 23 April, approximately 45 tonnes of tin concentrate was shipped in early May and the crushers also arrived on site in late May. The crushers have since been installed and commissioned with a small stockpile of crushed material accumulated.
All operations have been suspended for safety reasons during
Tel: +61 8 9340 6000
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