BASE Resources plans to produce monazite, a rare earth, from its proposed Toliara mineral sands project in Madagascar at an additional capital cost of $71m.
This follows publication of a prefeasibility study into the prospect of reprocessing slimes from mineral sands production at the site. Adding a monazite revenue stream would inflate the total capital cost of Toliara in its first phase development to $591m.
Tim Carstens, MD of Base Resources said monazite production would increase the net present value and free cash flow of Toliara 100% to $10.6bn over its life. “Put simply the outcomes from our monazite PFS reinforce our belief that Toliara is the best undeveloped mineral sands project in the world,” he said.
The project cannot proceed until new fiscal terms are agreed with the Madagascar government. However, negotiations have been regularly interrupted. Most recently talks were stopped while Madagascar installed a new government.
In November, President Andry Rajoelina won a third term, following a disputed election boycotted by the opposition and its supporters.
He won 59% of the vote to defeat his two closest rivals, ousted ex-President Marc Ravalomanana and Siteny Randrianasoloniaiko. The election recorded a voter turnout of 46%, considered to be the lowest in the island country’s history.
Said Carstens: “We believe the 2024 will see conditions supportive of the Toliara Project’s progression”. He added the company “looked forward” to resuming discussions.
Base Resources would have preferred Toliara to have been developed much earlier as it now faces financing the project without cash flow. That’s because it is due to close its only operating asset, the Kwale mine in Kenya during 2024.
Efforts to extend Kwale’s economic resource failed earlier this year. Carstens said the company would continue to look for new resources in Kenya.
