Diatreme Resources Ltd. has confirmed Northern Silica Project’s (NSP) potential as a long-life, low-cost silica sand operation following a positive pre-feasibility study (PFS) for the Queensland project.
The study outlines an initial Phase 1 base case of three million tonnes per annum (Mtpa) over a 25-year mine life, generating a pre-tax net present value (NPV) of AU$1.29 billion and an internal rate of return (IRR) of 36 per cent.
Upfront construction capital is estimated at AU$443.5 million, with a payback period of four years underpinned by a C1 cash cost of AU$25 per tonne.
An optional Phase 2 expansion to 5 Mtpa starting in Year 3 could boost the pre-tax NPV to AU$2.4 billion and IRR to 46 per cent, requiring just AU$38.5 million in additional capital expenditure.
The development is underpinned by a maiden Ore Reserve of 151 million tonnes grading 99.25 per cent silicon dioxide within the Si2 deposit.
Diatreme CEO Neil McIntyre described the NSP as a world-class asset designed to supply the booming global solar energy and specialty glass sectors.
“The 3 Mtpa Phase 1 start up case, with a pre-tax NPV of AU$1.29 billion and a 36 per cent pre-tax IRR, delivered from a low-cost operation with a four-year payback, places NSP among the most compelling critical minerals developments in Australia,” McIntyre said.
The project will be developed in joint venture with industrial minerals leader Sibelco Asia Pacific, which holds a 27 per cent stake and offtake rights.
The NSP will employ 214 workers during construction and 128 during operations, with Diatreme committing to a 50 per cent Indigenous employment target to support the local Hope Vale and Cooktown communities.
“The NSP has also been recognised by the federal government as a Major Project and by the Queensland government as a Coordinated Project, with this Qld critical minerals project set to help power the booming solar energy sector, contributing to global decarbonisation and energy security as a key strategic asset for Queensland and Australia,” McIntyre said.