The company now expects that market demand for its petalite can be met by processing less ore and that all of the petalite produced can be marketed as a high-grade product averaging 4.41% Li2O with a low iron content.
On a pretax basis, the project will likely yield a rate-of-return of 39.5%, and the net present value is estimated to be $53.5 million at an 8% discount rate. These estimates are based on a debt-to-equity ratio of 75-to-25, with the payback period projected at 3.2 years.
This improvement in profitability is partly due to a smaller, more-efficient plant design that has reduced estimated capital costs by 30% to $29.8 million.
Avalon proposes annual petalite production beginning at 17,000 tonnes and increasing to more than 32,000 tonnes in the fifth year.
Bulk-sampling in combination with a full feasibility will begin this winter.
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