LONDON, March 31, 2016 /PRNewswire/ -- Circum Minerals Ltd. ("Circum" or the "Company") today announced the results of the Optimized Definitive Feasibility Study ("Optimized DFS") for its potash project in the Danakil Basin in Ethiopia (the "Danakil Project"). The Optimized DFS improves a number of the project parameters set out in the original Definitive Feasibility Study completed in August 2015 (the "2015 DFS"). The Optimized DFS confirms that the Company's Danakil Project is expected to be a world-class project in terms of size and could potentially become the world's lowest cost potash producer and a major supplier to the Asia Pacific markets.
Project Highlights
The Company, together with its independent consultants Senet (Pty) Ltd of South Africa and K-UTEC AG Salt Technologies, reviewed the costs in the 2015 DFS. Through their work on the Optimized DFS, development capital costs were reduced by US$276 million and operating costs were reduced by approximately US$3 per tonne. These reductions have had a favorable impact on the project economics.
A summary of the Optimized DFS is presented below:
Real unless o/w indicated |
Optimized DFS |
2015 DFS |
Annual Production |
2 Mt MOP, 0.75 Mt SOP |
2 Mt MOP, 0.75 Mt SOP |
Operating costs (EXW) |
US$38/tonne MOP US$112/tonne SOP |
US$39/tonne MOP US$114/tonne SOP |
Operating costs (FOB Djibouti) |
US$81/tonne MOP US$156/tonne SOP |
US$84/tonne MOP US$159/tonne SOP |
Development Capital |
US$2.3 billion |
US$2.6 billion |
Pre-tax NPV @ 10% (Real) |
US$2.8 billion |
US$2.5 billion |
Pre-tax Nominal IRR |
29% |
26% |
Post-tax NPV @ 10% (Real) |
US$2.1 billion |
US$2.1 billion |
Post-tax Nominal IRR |
26% |
25% |
Note: Based on a flat, real MOP price of US$350/t and a flat, real SOP price of US$580/t, assuming 2% inflating factor. |
The Chairman and Co-founder of Circum, Stephen Dattels, is also pleased to announce that Morgan Stanley & Co. International PLC has been appointed as the financial adviser to conduct a strategic review of Circum's Danakil Project. The strategic review will focus on the potential introduction of third-party strategic investors and joint-venture parties at a corporate or project-level as well as corporate or project-level debt and/or equity investments. Circum has identified a number of strategic and financial parties interested in being involved in various aspects of the world-class Danakil Project's development, given its importance to the potash industry and the Asia Pacific markets.
About Circum Minerals Ltd.
Circum Minerals Ltd. is a private company focused on the development of a significant potash deposit in the Danakil Basin of Ethiopia. Through its wholly-owned subsidiary, Circum Minerals Potash Ltd., the Company holds a 100% interest in an exploration license covering 365 square kilometers. For more information visit its website at www.circumminerals.com.
For additional information please contact:
Chris Gilchrist
Chief Operating Officer
Circum Minerals Ltd.
Chris.gilchrist@circumminerals.com
+353419883409
Certain statements in this press release are forward looking statements. These forward looking statements are not based on historical facts but rather on management's expectations regarding the Company's future growth, results of operations, future capital and other expenditures, competitive advantages, exploration and development activity and the results of such activity, business prospects and opportunities. Such forward looking statements reflect management's current beliefs and assumptions and are based on information currently available to management. Forward looking statements involve significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements, many of which are beyond the control of the Company. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligations to update publicly or otherwise revise any forward-looking information.
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