A big jump in prices in the “rare earth space and zirconium space” will help Alkane Resources in its search for funding to launch the Dubbo Project, according to managing director Ian Chalmers.
He says an engineering study into a two-stage and modular approach to getting the project up and running will also support the financing process.
Mr Chalmers said the company was “extremely positive” about the project, based on one of the world’s largest in-ground resources of zirconium, hafnium, niobium, yttrium and rare earth elements at Toongi. “Internally...we’re still targeting late this year to start construction,” he told the Daily Liberal.
Alkane Resources reports that the Dubbo Project remains ready for construction, with all state and federal approvals and a solid business case in place. “The team is now working hard to secure financing for the project,” it reported in a community newsletter issued in February this year.
On Thursday Mr Chalmers detailed opportunity and effort that could expedite access to start-up cash.
“The thing we are starting to see, and it has been happening this year, is some of the prices for our key products in the rare earth space and the zirconium space, have definitely kicked up,” he said. “We’ve had 20 per cent, 30 per cent rises for some of the key products. That’s huge for us. It helps us with the financing.”
Mr Chalmers said the project had been “belted by low prices” for the past three or four years. “Which of course makes it more difficult to put off-take agreements in place and more difficult to put financing in place,” he said. “Hopefully we are getting into a position to make some decisions to go this year.”
The managing director said the company was advised by Japan's Sumitomo Mitsui Bank, “also involved in the financing program”. “These guys are telling us what we need to do and the people we need to speak to,” Mr Chalmers said.
The managing director said the decision to build the project’s processing plant using modules built off-site and transported to Dubbo was being costed in the engineering study by Finnish company Outotec.
He said the first stage of development would involve “two trains” processing 500,000 tonnes of rock a year.Two more trains would be introduced in the second stage, allowing the project to reach its target of one million tonnes a year, Mr Chalmers said. “It takes away the need to have a billion dollars up front,” he said. “We can break it up into $500 million and probably another $400 million after that.”