Rafaella Resources Limited (ASX:RFR) has received promising results in a detailed pre-feasibility study (PFS) for the Santa Comba Tungsten and Tin Project in Spain.
Conducted in-house with the support of industry leading consultants, the PFS follows the recent drilling campaign that resulted in an upgraded Mineral Resource Estimate announced in July and the results of extensive metallurgical test work on the disseminated near surface mineralisation.
The PFS shows the Santa Comba Tungsten and Tin Project to be economically robust offering near term cash flows and immediate scalability.
The detailed Santa Comba PFS sets out a 5-year open pit mine life at 1.3 mtpa demonstrating pre-tax NPV8 real of US$28.6M (A$40.3M) and an IRR of 156%
The Project is economically robust with rapid payback of five months providing substantial cash flow coverage to secure debt financing.
The Proven and Probable Ore Reserves are estimated to be 4.593 million tonnes at a grade of 0.148% WO3 (cut-off 0.05%).
The report identifies that the Project benefits from an existing approval to construct the process plant and to recommence underground mining operations. Initial open pit material will be sourced through a commercial arrangement with the local aggregate quarry operator as the tungsten mineralisation overlaps the quarry open pit permit boundaries.
This arrangement (Stage 1) will allow the company to fast-track the development of the Project.
Further test work is ongoing to optimise the recoveries, however this upside is shown in the sensitivities. For every 1% increase in recoveries, the Project generates approximately US$1M in additional NPV.
The Project implementation plan assumes the start of development commencing on January 1, 2021 with first sales by the end of 2021 as the Project benefits from considerable existing infrastructure, including existing site grid power, tailing storage facility, office building and concentrate shed, and process plant foundations that will be used to construct a simplified modular process plant based on a combination of new and second hand/refurbished units.
The PFS only focuses on the near surface resources with substantial upside available from recommissioning the high-grade underground operation (underway) and through additional drilling of identified mineralisation within the quarry area that is targeted to be converted to indicated or measured resource and be added to the mine plan (scheduled for early 2021).
Rafaella Resources will now look to move directly to development and commissioning of the Project with first sales targeted for the end of 2021. Recommissioning of the underground operation, the economics of which are not included in this PFS, has already commenced.