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ASTRON LIMITED — Capital/Financing Update 2013
Aug 1, 2013
64449_rns_2013-08-01_1e5d8ef1-b524-4151-9c4a-7fc7e5ab1f80.pdf
Capital/Financing Update
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ASX CODE (GPP)
ABN 22 000 002 111
ASX RELEASE
ABOUT GREENPOWER
Greenpower Energy is a clean energy technology developer, and is currently progressing the development of 'zero carbon' processes for converting coal to transport fuels, which it can then apply to the company's own sizeable inferred resource of Victorian brown coal. Go to greenpowerenergy.com.au
CAPITAL STRUCTURE
| - Shares on issue | 72,933m |
|---|---|
| - Unlisted options | 0.7m |
| As at 30 June 2013: | |
| - Cash | 0.7m |
| - Shares in listed co | 1.8m |
| - Exploration assets | 2.0m |
CONTACT US
Alan Flavelle Chairman – 0438 599 252 Gerard King MD – 0418 852 700 John Watts CEO – 0427 943 919 Matt Suttling CFO/Secretary – 0425 215 349 [email protected] www.greenpowerenergy.com.au PO Box 1664 Pending a successful outcome Fremantle WA 6959
GREENPOWER INVESTMENT IN ASTRON LIMITED: UPDATE
1 August 2013: The Directors of Greenpower Energy Limited (ASX:GPP) advise that investee company Astron Limited (ASX:ATR) has completed a Definitive Feasibility Study (DFS) for its Donald Mineral Sands Project.
Greenpower, via a fully owned subsidiary, owns 1,804,366 shares in Astron with Astron ordinary shares’ closing price after its announcement yesterday of $1.00 per share. Greenpower’s equity represents 1.47 per cent of Astron’s issued capital.
The Key Elements of the study were released to the Australian Securities Exchange on 31/07/2013 and are set out below.
Alan Flavelle, Greenpower Executive Chairman commented, “our investment in Astron strengthens our financial situation going forward and we look forward to being a part of Astron’s development.”
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Key Elements of Astron Definitive Feasibility Study:
One of the largest known zircon and titanium resources in the world – 4,040Mt at average Heavy Mineral (“HM”) grade of 4.8% with proven and probable reserve of 461Mt.
The Project will be ramped up in phases, with initial production of 475ktpa Heavy Mineral Concentrate (“HMC ‖ ) production (Stage 1a) ramping up to 950ktpa HMC (Stage 1b) (subject to appropriate approvals).
At full production rate, the Project is expected to be one of the top 5 global zircon suppliers, supplying approximately 8% of the global zircon market and 4% of the global titanium feedstock market, with 59:41 zircon and titanium feedstock revenue spilt.
Ore from the mine will be processed into a HMC at site in Victoria, Australia. The HMC will then be transported to a processing plant located in Putian, Fujian province China for further processing into final products including primary zircon, secondary zircon, rutile (HiTi90), leucoxene (HiTi70), primary ilmenite, secondary ilmenite, zircon 60, zircon saleable tails, magnetic tailings and non-magnetic tailings. This is a change from the original project plan where all processing to end product was to be carried out in Australia. Significant capital cost savings have arisen from this change.
Total capital cost estimate of $518m1 to achieve full 950ktpa production rate, including $277m (inclusive of EPCM (engineering, procurement, and construction management) and allowance for a $29m contingency) for initial HMC production of 475ktpa.
Over the expected 31 year life of the Project, the average annual revenue is forecast to be $740m and the average operating expense is forecast to be $223m.
A high level project implementation schedule has been developed by Astron. Engineering and construction for Stage 1a is expected to take 24 months with commissioning and first production targeted for the first quarter of 2016. Construction of Stage 1b will commence on completion of Stage 1a and therefore is expected to be at full production within 21 months of construction commencement. The majority of approvals are in place with a Mining Licence awarded for Stage 1a in 2010.
A definitive start date for the Project is subject to a final investment decision, with work continuing on further detailed design work and securing financing for the Project.
The indicated NPV10 of the Project is $2,104 million and IRR of 36.5% (based on the first 31 years of mining). The financial model adopts price forecasts from Ruidow in China, the major market for the products of the Project. Sensitivity studies indicate that the price of products has the largest impact on NPV of all the variables. The directors believe that the project economics contained in the DFS are reasonably robust and capable of absorbing significant variations in price, currency and operations that will inevitably arise during the life of the Project.
Astron engaged SRK to carry out an independent assessment of the technical aspects of the Project as well as the capital and operating cost estimates and consequent impacts on the financial model. Their report addresses risk assessments including those surrounding fine grain material, and elevated uranium, thorium and chrome levels in the ore, and supports the project solutions Astron has developed to address these and the above mentioned risk issues.