Hastings Technology Metals Reports Quarterly Activities and Strategic Updates - 30 July 2024
HASTINGS TECHNOLOGY METALS LTD (HAS) Share Update July 2024 Tuesday 30th
Hastings Technology Metals Announces Major Cost Reductions and Strategic Investments
Hastings Technology Metals Ltd (ASX:HAS) has announced substantial cost reductions, strategic investments, and project advancements in its latest quarterly activities report for the period ending 30 June 2024.
Instant Summary:
- Capital cost for the Yangibana Rare Earths Project reduced to $320 million.
- Identified $56 million in total savings across operating costs.
- Completion of independent lenders’ due diligence review by Behre Dolbear Australia.
- Successful pro-rata renounceable rights issue raising $15.88 million.
- Cash and cash equivalents of $21.8 million as of 30 June 2024.
- JL Mag Green Tech to become a 9.8% strategic investor in Hastings.
- Quarterly dividend of CAD 762,800 from Neo Performance Materials Inc.
- High-grade heavy rare earths identified at Centipede Range.
- Organizational restructure implemented to align with strategy and deliver cost savings.
- Total Recordable Injury Frequency Rate of 0.0 with no recordable injuries during FY2024.
Capital Cost Update
In June 2024, Hastings announced the results of an in-depth cost review, with the remaining capital cost for the Yangibana Project reduced to $320 million (inclusive of $27 million in contingency). This reduction includes $154 million in incurred costs as of 30 June 2024 and a $30 million reduction in capital costs.
A review of construction costs identified approximately $30 million in savings, reflecting the increased maturity of designs, further scope clarity around unawarded work, and the reduction of non-essential activities. Additional savings of $26 million were identified across operating costs during ramp-up and commissioning, resulting in total savings of $56 million.
Development Activities
As of the end of June 2024, construction of the Yangibana Project was 32% complete, with $154 million spent on non-process infrastructure and long-lead equipment for the beneficiation plant. Long-lead equipment such as flotation cells and storage silos continued to arrive during the quarter.
Sustainability and Safety
The company maintained a Total Recordable Injury Frequency Rate of 0.00 for the quarter, with zero recordable injuries during the 2024 financial year. Several significant environmental initiatives and submissions were progressed, including streamlining the Yangibana Project’s Part V regulatory approvals and permits process.
Exploration
Hastings announced the identification of high-grade, heavy rare earths-bearing xenotime at its Centipede Range, located 30km southwest of the Yangibana Project site. The company plans to explore the potential of Centipede Range as a second ore source for the Yangibana Project in the next quarter.
Corporate and Financial Updates
In May 2024, Hastings implemented an organizational restructure to manage costs prudently, resulting in 30 positions being made redundant or canceled. The company successfully raised $15.88 million through a pro-rata renounceable rights issue and announced a $7 million strategic investment from JL Mag Green Tech, which will become a 9.8% strategic investor in Hastings.
Hastings continued to advance the arrangement of the project funding package for the remaining Yangibana Project costs, with independent lender technical due diligence confirming the updated $474 million capital cost revision.
The significant cost reductions and strategic investments announced by Hastings Technology Metals are likely to have a positive impact on the company's stock. The reduction in capital and operating costs will improve project economics, while the strategic investment from JL Mag Green Tech provides additional financial stability and industry expertise.
Investor Reaction:
Analysts are expected to react positively to the announcement, noting the substantial cost savings and the strategic investment from a leading rare earths producer. The improved project economics and financial stability should bolster investor confidence.
Conclusion:
Investors should closely monitor Hastings Technology Metals' progress on the Yangibana Rare Earths Project and the potential long-term impacts of the cost savings and strategic investments. The company's ability to execute its plans and maintain financial stability will be crucial in sustaining investor confidence.