Definitive Feasibility Study. The Company shall have received, and delivered to the Purchasers and publicly filed with the SEC on Form 8-K, the final Definitive Feasibility Study, which final Definitive Feasibility Study shows (a) that the Xxxxxxxx Project's Capital Costs are not in excess of 10% of the Current Capital Estimate, (b) that over the life of the mine (measured on a reserves-only basis) the Xxxxxxxx Project's Operating Costs are not higher than $115/tonne (provided that Operating Costs in excess of $115/tonne will be permissible to the extent the Company demonstrates, to the Majority Purchasers' reasonable satisfaction, that (x) such excess Operating Costs are being incurred based on a tradeoff optimization study and (y) such tradeoffs that result in such excess Operating Costs are economically beneficial to the Company and add value to the Xxxxxxxx Project), (c) that ore grades and mineable reserve and resources estimates are consistent with what was provided for in the PEA and (d) forecasted production levels, ramp up rates, royalty rates and all other key commercial factors are consistent with what was provided for in the PEA (and in respect of royalty rates, including the royalties granted to the Karlsson Group Inc., Grandhaven Energy LLC and Buffalo Management LLC in the amounts as publicly disclosed prior to the date hereof).
Definitive Feasibility Study. The PFS was prepared based upon an initial period of mining kaolinized granite as DSO and toll wet-refining overseas to generate early cashflows and to then convert to onsite wet-processing in Year 2. This would produce concentrated kaolinitic product that is shipped in bulk as filter cake for final toll wet-refining overseas in order to produce a premium bright-white halloysite-kaolin product for high value ceramic applications. A pre-tax NPV of A$736M and IRR of 175% was estimated by the PFS from annual sales of 233ktpa of refined kaolin produced (refer ADN ASX announcement dated 1 June 2020 titled “Pre-Feasibility Study Further Improves Poochera Halloysite-Kaolin Project Economics”). In an attempt to de-risk the project the DFS will evaluate alternative scenarios of a start-up 500,000tpa plant or a two-staged 250,000tpa modular phased wet-processing plant to be constructed at site, in preference to an initial DSO phase moving to 500,000tpa from Year 2 as contemplated under the PFS. In addition, the product specifications under the DFS have been altered from those considered in the PFS to a product with approximately 70% passing 2 microns (PFS was 90%) to meet the requirements of high-end ceramic manufacturers. The processed kaolin product has the brand name ‘Great White CRM’. The expected benefit of the new DFS approach is that high value product will be manufactured at site from the commencement of operations, from either an immediate 500,000tpa or two-staged wet-processing plant, tasking Project management with direct control to meet product quality specifications. The option to undertake DSO in the first 2 years of operations as proposed by the PFS will be further analysed under the DFS to consider the technical capabilities of identified refineries and perform more cost benefit analysis to ensure this to be the best option for the Project. Either of the early start-up scenarios will require bringing forward capital expenditure for construction of the plant. Under the PFS processing plant, capital expenditure was initially deferred such that plant construction would be funded by DSO sale revenues generated in the first two years of operation. Funding options are being considered under the DFS and for the following Bankable Feasibility Study (BFS) with significant assistance being provided by highly experienced corporate advisors Origin Capital. Project debt funding will be sourced to the benefit of both parties to the joint venture, with similar term...
Definitive Feasibility Study. (a) Upon GBR acquiring the Stage 2 Interest, and until completion of a Definitive Feasibility Study (DFS), GBR shall:
