Lindian Resources' Kangankunde Project Feasibility Study Shows Strong Economic Potential
LIN (LIN) Share Update July 2024 Monday 29th
Lindian Resources Releases Promising Feasibility Study for Kangankunde Rare Earths Project
Lindian Resources Limited (ASX: LIN; OTCQB: LINIF) has announced the results of its feasibility study for Stage 1 of the Kangankunde Rare Earths Project in Malawi, revealing promising economic and technical prospects.
Instant Summary:
- Feasibility study confirms low risk and robust economic potential.
- Updated Mineral Resource Estimate: 61 Mt of Indicated Resource at 2.43% TREO.
- Maiden Ore Reserve: 23.7 Mt at 2.9% TREO.
- All required permits and licenses secured for Stage 1 construction.
- Detailed design works for process plant and infrastructure commenced.
- Resettlement program and Community Engagement Plan implemented.
Feasibility Study Results
The feasibility study for Stage 1 of the Kangankunde Rare Earths Project, completed during the quarter ended 30 June 2024, confirms the project's technical robustness and economic viability. The study highlights a pre-tax net present value (NPV8 real) of US$794M, an internal rate of return (IRR) of 99%, and an average annual EBITDA of US$84M.
The pre-production capital cost is estimated at US$40M, including a 12.5% contingency, making it one of the lowest capital cost rare earths projects under development. The project is expected to have an average annual FOB operating cost of US$2.92/kg TREO, placing it in the lowest quartile of the global rare earths industry.
Mineral Resource and Ore Reserve Estimates
The updated Mineral Resource Estimate includes 61 Mt of Indicated Resource at an average grade of 2.43% TREO, based on a cut-off grade of 0.5% TREO. Additionally, the maiden Ore Reserve is estimated at 23.7 Mt at an average grade of 2.9% TREO, based on a cut-off grade of 1.00% TREO.
Permits and Licenses
All necessary permits and licenses for Stage 1 construction and operations have been secured, including the Water Abstraction Licence. This allows Lindian to proceed with awarding construction contracts to preferred tenderers once funding is secured.
Community Engagement
Lindian has implemented a resettlement program and a Community Engagement Plan in collaboration with local government and community leaders. This plan ensures ongoing communication and engagement with the community, addressing any issues that may arise during the project's development.
The feasibility study's positive results and the securing of necessary permits position Lindian Resources favorably for future development. The project's low capital and operating costs, combined with its robust economic potential, are likely to attract investor interest and positively impact the company's stock price.
Investor Reaction:
Analysts are expected to react positively to the feasibility study results, given the project's strong economic indicators and the progress in securing permits and licenses. The low capital and operating costs are particularly noteworthy, making the project attractive to investors.
Conclusion:
Investors should keep an eye on Lindian Resources as the company advances the Kangankunde Rare Earths Project. The feasibility study results and the securing of necessary permits are significant milestones that indicate a promising future for the project. Investors are encouraged to monitor further developments and consider the potential long-term benefits of this investment.