Winsome Resources (WR1.AX) has released the results of a scoping study on its Adina spodumene project. The company has outlined a 21 year mine life with an average production of 280,000 tonnes of spodumene per year, during a 17 year long so-called ‘active production period’.
The AISC per tonne of 5.5% spodumene is estimated at US$693/t, and using an average spodumene pricing of US$1375/t for the 5.5% product, the after-tax NPV8% is estimated at around C$1B while the IRR is 43% on an after-tax basis. The payback period is just two years.
Those are remarkable numbers, and these are boosted by the very low initial capex, which is estimated at just US$259M, followed by approximately US$542M in sustaining capex. Winsome was able to keep the capex very low as the study assumes full ownership of the processing facilities at the Renard diamond mine, which includes a fully functional 2.2 million tonnes per year processing facility, a power plant and all other required mine facilities. As the Adina project will need just 1.7 million tonnes per year of processing capacity, the Renard processing site is more than sufficient.
Disclosure: The author has no position in Winsome Resources. Please read the disclaimer.
