Updated project economics for Phase 1 of Astron Corporation’s Donald rare earths and mineral sands project in Victoria has cemented the asset as a “financially robust investment”.
Described as a “globally significant, Tier 1 source”, Donald’s development has made great progress in areas such as engineering and design, value optimisation initiatives, pre-production drilling, land access arrangements and prospective debt financier engagement.
Astron has received Federal Government approval under the Environment Protection and Biodiversity Conservation Act 1999 and Victorian Government approval for its work plan, the latter of which will pave the way for construction and operation of Phase 1 at Donald to begin.
Now, Astron has released updated project economics for Phase 1 of Donald.
The first phase of operations is now expected to deliver a pre-tax NPV8 (net present value discounted by eight per cent) of $837 million at an internal rate of return of 22.1 per cent on a 100 per cent basis.
Over a 42-year mine life, Phase 1 of Donald is anticipated to generate $3.4 billion of free-cash flows, $12.1 billion of revenue and $4.9 billion of earnings before interest, taxes, depreciation and amortisation (EBITDA).
This would be achieved through a forecasted average annual revenue of $291 million and annual EBITDA of $118 million.
Phase 1 of Donald is also expected to contribute $2.2 billion to western Victoria’s gross regional product, providing local employment opportunities and reinvestment. Its total estimated capital expenditure currently sits at $439 million.
“The updated Donald project economics highlight the financial and technical viability of what will be a major new Australian source of critical minerals,” Astron managing director Tiger Brown said.
“The financial characteristics of the project, considering current rare earth market conditions, illustrate the resilience of the project and its expected ability to withstand market challenges with its dual revenue stream providing a defensive element in terms of commodity price cycles.”
Production wise, Phase 1 of Donald is projected to produce 229,000 tonnes (t) of heavy mineral concentrate (HMC) and 7200t of rare earth element concentrate (REEC) per annum.
The average annual HMC production would be equivalent to 43,000t of zircon and 99,000t of ilmenite, and the average annual REEC would contain a mixture of neodymium, praseodymium, samarium, dysprosium and terbium.
“The project is expected to enter the market at a time when the demand for heavy rare earth elements dysprosium and terbium is likely to be high due to the scarcity of economic resources around the globe,” Brown said.
“This scarcity, and the ready-made path to market through our joint venture and 100 per cent rare earth elements concentrate offtake agreement with Energy Fuels, underpins the updated project economics and strengthen the case for near-term commencement of construction.”
Equipped with key regulatory approvals, an environmental effects statement, and a mining licence, Donald’s final investment decision is scheduled for late 2025, with first production expected to follow in the fourth quarter of 2027.
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