CEO Andrew Taplin has been promising a significant increase to the size and quality of the resource from its recent infill and extensional aircore program, and today he delivered the outcome of the work by suggesting Port Gregory now has enough garnet to meet five years of global demand.

 

The total resource now stands at 166 million tonnes grading 4% total heavy minerals for 5.9Mt of contained garnet, with minor ilmenite and rutile credits.

 

Encouragingly for the company's development plans the majority of the resource is measured.

 

The deposit remains open to the south and north.

 

Taplin said the company will now move into a prefeasibility study, building on scoping studies that suggest Port Gregory has a capital cost of a modest $110 million, a four-year payback and a free cash flow of $588 million.

 

The project's net present value and internal rate of return were estimated at $253 million and 33%.

 

Dutch sovereign wealth fund Atradius last month issued a letter of support for funding.

 

Bulk sampling for end-user acceptance testing is scheduled to start later this year.

 

There are already two garnet mines north of Port Gregory, but with Indian, Australian and USA supply and production challenges materially impacting global supply, Taplin believes the market can support a third. 

 

The company also has a 90-150Mt at 4.1-5.4% THM exploration target for its nearby Red Hill project.

 

Heavy shares were up some 240% in early trade to hit an infra-day and 12-month peak of 39c per share.

 

At the time of writing the stock was still up 195% at 33c, capitalising it at $17.5 million. It closed at 11c on Friday.