American Pacific Borates Limited (ABR) has commenced a
revision to the Fort Cady Borate Mine DFS to potentially increase sulfate of potash (SOP or K2SO4)
production and EBITDA.
The Board is considering increasing SOP production for a variety of reasons, including:
- The US is a net importer of SOP and the only incumbent producer is a high cost producer;
- ABR will have a very low cost of production relative to US production and imported SOP;
- The Mine is located on the West Coast which is a major consuming area for SOP;
- Growth rates for SOP consumption are stronger than US GDP;
- The Mine will have the required electricity and gas to power the additional Mannheim furnaces, as the Mine has access to grid electricity and network gas; and
- The Mine will have access to a brilliant logistics solution for increased production, given the process plant is located within two kilometres of the national rail network and a major interstate highway.
There will be no change to Mineral Resources, Ore Reserves or assumed DFS mine life as the production targets for boric acid will remain unchanged.
The Board expects capital expenditure estimates for Phases 1B, 2 and 3 will increase and that operational expenditure estimates will decrease with fixed costs spread over larger production. The Board also expects these increases to be offset by additional EBITDA commensurate with high margin by-product production of SOP.