Release: Herald Resources: Dairi project update ? improved feasibility study results
Friday, August 19 2005 - 03:26 AM WIB
(All figures in US$, project totals)
RE: DAIRI PROJECT UPDATE ? IMPROVED FEASIBILITY STUDY RESULTS
August 19, 2005 ? Following the decision in the June quarter to transport the Dairi concentrates by truck to the east coast of Sumatra, rather than by pipeline to the west coast as contemplated in the original Dairi Feasibility Study (DFS), capital and operating costs for the project have been recalculated. This has resulted in an improvement in overall project economics.
Total capital costs have decreased by $18m (from $136m to $118m) due to cancellation of the pipeline, partly offset by an increased allowance for upgrading of roads and general contingency.
Total operating costs have increased due to the use of trucks versus the pipeline as well as increased fuel prices in the interim, partly offset by a fall in shipping rates over the same period.
All other parameters, including metal price and treatment charge assumptions, have remained the same, namely;
- Initial mine life of 7 years
- Diluted mined head grades of 15% Zn, 9% Pb (21% Zn equivalent)
- 1 mtpa production rate, utilizing underground mining with paste back-fill
- Conventional flotation treatment process, producing 220,000 and 100,000 tonnes of zinc and lead concentrates p.a. at full production
A comparison between the new figures and previously announced Dairi Feasibility Study results appears below:
? |
Revised DFS August 2005 |
Original DFS February 2005 |
Total project cashflows (after repayment of capital) |
? |
? |
Pre-tax |
$288m |
$277m |
Post-tax |
$202m |
$196m |
? |
? |
? |
Net present value at 10% |
? |
? |
Pre-tax |
$121m |
$109m |
Post-tax |
$73m |
$65m |
? |
? |
? |
Internal rate of return |
? |
? |
Pre-tax |
34% |
29% |
Post-tax |
25% |
22% |
? |
? |
? |
Total capital cost |
$118m |
$136m |
Cash operating cost (per lb of zinc produced) |
31? |
30? |
The detailed revised costings will now be re-submitted to the company?s mandated banking syndicate and selected offtake groups to enable them to complete their due diligence studies in relation to providing finance facilities for the Dairi Project. (end of release)