Metallica Minerals Limited (ASX: MLM) has executed a Memorandum of Understanding (MOU) with the Queensland Government owned corporation, Far North Queensland Ports Corporation Limited (Ports Norths).
Ports North is the Port Authority that manages the Cape Flattery Port.
The MOU is the first step towards formalising the commercial terms for the establishment of our purpose-built jetty for our silica sand project. Completion of the commercial terms remains subject to granting of regulatory approvals and finalising agreements with our Traditional Landowners,” Metallica Executive Chairman, Theo Psaros, said.
“We intend to barge from our planned jetty and load ocean going vessels within the Port Limit. We will continue to plan these activities with the Ports North team. We look forward to progressing the next stage of negotiations with Ports North to finalise the commercial agreements for our project.”
About the Cape Flattery Silica (CFS) Project
Metallica’s 100% owned Cape Flattery Silica Sands project is adjacent to the world class Cape Flattery Silica Sand mining and shipping operation owned by Mitsubishi.
Exploration drilling to date has now confirmed that the sand dunes within EPM 25734 contain high purity silica sands with an insitu quality which is understood to be comparable to Mitsubishi’s Cape Flattery Silica Mine.
In June 2021 the company announced that it had lodged a Mine Lease Application (MLA) for the project.
In March 2022 the company released the Pre-feasibility Study (PFS) for the CFS Project,
The key highlights of the PFS Report are as follows:
- Cape Flattery Silica Sand Project’s (CFS) Pre-Feasibility Study (PFS) confirms the Project can be a long-life silica sand project producing high-quality silica sand for the booming Asia-Pacific glass manufacturing markets supplying the solar panel industry.
- The PFS returns pre-tax Net Present Value (NPV) of A$290 million (M), Internal Rate of Return (IRR) of 34.9% and life of Project cash revenue of A$2,127M. This compares with the Updated Scoping Study (November 2021) which had an NPV 8 of A$253M.
- The Capital Cost of CFS is estimated to be $79M (including a 15% contingency of $10M) with a payback period from commencement of production of 3.9 years. All production is based on the Maiden Ore Reserve (refer table 2 – Ore reserves).
- The Maiden Ore Reserve of 46 million tonnes @ 99.18% SiO₂ (refer to table 2 below) is exploited over a 25-year Project life producing saleable product of 1.35Mt per annum.
- Sensitivity and scenario analysis demonstrate the Project is financially robust and can maintain a positive Net Present Value (NPV) through stress-testing of the various scenarios.
- Both the sand extraction area and the industry standard processing facility will have a small footprint and low environmental impact.
- A purpose-built jetty is planned to be constructed (subject to Development Approval (DA)) to allow barge loading and transhipping operations. This infrastructure, importantly, is located within the Port Limit of Cape Flattery.
- Development of CFS will deliver employment, apprenticeship and training opportunities to the Hope Vale and Cooktown communities, particularly the local indigenous communities.
- CFS will contribute to delivery of the Queensland Government’s commitment to the development of new economy minerals in Far North Queensland.
- The results from the PFS demonstrate a strong financial case and the company’s Board has approved commencement of a Definitive Feasibility Study (DFS) in Q2 2022.