Alkane Resources is keen to build the Dubbo Zirconia Project (DZP) in two stages using transportable modules that may reduce the cost of construction by about $160 million.
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The modules would be built off-site in a “lower-cost environment in Australia or overseas”, the company has told the Australian Securities Exchange (ASX) .
Managing director Ian Chalmers said fewer construction jobs was “possible”.
“It just depends where all the modularisation is done,” he said.
“There’s nothing to stop it being done in rural NSW.”
Released on Friday, the company’s new strategy follows its persistent investigation into ways to reduce the $1billion capital cost of the project that is yet to be fully financed.
Managing director Ian Chalmers said the modular and staged approach would make it “easier” for financiers to get on board.
“We still have to do the final financial analysis of it but all the work we’ve done to date suggests it’s the logical way to go, mainly because it de-risks more of that upfront capital.
“If you have to raise that $1billion people get a bit twitchy. If you can do the first stage for $450 million or $500 million or something like that, that is still a lot of money, but it doesn’t have the same sting as $1billion.”
If you have to raise that $1 billion people get a bit twitchy.
- Alkane Resources managing director Ian Chalmers
The company has reported to the ASX that building the “plant off-site in compact sections to transport economically” to Toongi would cost about $480 million for stage one and $360 million for stage two.
A proposed construction timeline suggests stage one and two would be built across two years from 2017 and 2022, respectively.
Each stage would process 500,000 tonnes of ore a year.
The company reports that the advantages of the modular and staged approach includes a reduced “initial capital spend”, “rapid advancement into production” and a “smaller commitment by counterparties that can grow within the project”.
The DZP, incorporating a mine and processing plant, will employ between 200 and 250 full-time staff when stage one is in production.