Anax Metals eyes potential alliance with GreenTech Metals to advance its Pilbara base metals processing hub
Move could combine their respective Whim Creek and Whundo projects, increasing open pit mine life
This will in turn deliver more favourable funding and offtake while improving operational efficiencies
Special Report: Anax Metals has lined up GreenTech Metals as a potential partner for its planned Whim Creek base metal processing hub in the Pilbara, which would also offer owners of smaller deposits the opportunity to monetise their assets.
Under the non-binding memorandum of understanding, the two companies agreed to jointly assess the potential to treat ore from GreenTech Metal’s (ASX:GRE) Whundo base metals deposit and other suitable assets at the fully-permitted Whim Creek processing hub.
Anax Metals (ASX:ANX) is already using its robust Whim Creek project to underpin plans to build a regional hub that would offer owners of smaller and otherwise uneconomical deposits the opportunity to monetise their assets.
This joint venture with 20% partner Develop Global (ASX:DVP) will consist of a new 400,000tpa concentrator and a refurbished heap leach facility capable of treating oxide, transitional and supergene ore.
By maxing out its processing capacity with third-party ore, Whim Creek could become a substantial WA producer with a potential production profile of 20,000-30,000tpa of copper equivalent and a mine life of more than 10 years.
Whim Creek itself has seriously attractive economics with a definitive feasibility study released in April 2023 outlining a base metals operation with a 8.5 year production life and modest pre-production capex of $71m that can generate free cash flow of $340m along with NPV and IRR – both measures of profitability – of $224m and 54.3% respectively.
This has since been upgraded to ~$520m in free cash flow and pre-tax NPV and IRR of $357m and 74% thanks to a copper price of $9,900/t at the time of the update.
Not far apart. The Whim Creek and Whundo projects. Pic: Anax Metals
New alliance
ANX has also formed the Pilbara Base Metal Alliance with GRE, which is envisaged to consist of base metal explorers that are seeking to monetise assets within trucking distance of Whim Creek.
This will include collaborating on feasibility studies and permitting work.
Combining Whim Creek with GRE’s Whundo/Ayisha assets will result in a combined measured, indicated, and inferred resource base of 17.2Mt with over 185,000t of contained copper and 256,000t of contained zinc.
This has the potential to significantly increase the up-front open pit mine-life of the operation, which will improve open pit mining contract rates while securing more favourable funding and offtake terms.
It will also deliver economics of scale while improving operational efficiencies by having a single mining and processing team.
Additionally, it will reduce the environmental footprint by having a single processing facility.
“We are extremely pleased to take these first steps towards creating an expanded Pilbara copper business with our neighbours, GreenTech. We look forward to delivering scalable assets with near term “energy metals” production,” ANX managing director Geoff Laing said.
GRE executive director Tom Reddicliffe added that the MoU was a great opportunity that could see a formalised alliance that would establish near-term mining operations at the Whundo project.
“Our project already has defined open-pittable copper and zinc resources and potential to define additional near surface resource tonnes at both Yannery and Ayshia,” he noted.
“The alliance could be the catalyst that the West Pilbara needs to become a significant copper producer and we look forward to working closely with Anax to make this a reality.”
This article was developed in collaboration with Anax Metals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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