The reserve sits within a small a sub-set of the larger and still open Cadoux kaolin deposit that has optimal HPA feedstock characteristics to match its simple flowsheet.
Managing director Roland Hill said the company had made significant steps forward with its HPA strategy, and improved confidence in the quality and characteristics of the in-ground kaolin deposit, which should translate into a superior and consistent quality feedstock for the HPA processing and refining at a proposed plant at the proposed new battery metals centre in Kwinana, some 250km from the deposit.
The plan for mining takes in 14 stages and production of around 8000tpa of high purity alumina for use in the high tech products market, such as electric vehicles and screens.
The probable reserve follows a busy few weeks for the company that has involved a revised resource estimate and the completion of the promising prefeasibility study.
The PFS supported the company's aim to become a vertically-integrated, long life producer of high quality HPA with an NPV10 of US$506 million for a 25-year project life at an internal rate of return of 46%.
Payback for the $180 million development is under four years and the plant should generate annual after-tax cashflow of $90.7 million based on delivering an operating margin of $17,500/t, assuming a $24,000 HPA price.
The HPA market is forecast to be $4.5 billion by 2022 based on dramatic rises in demand - around 17% per annum.
A bankable feasibility study is set to be completed in 2019, as is a search for potential offtake as a part of de-risking its production profile for its product, which has produced 99.997% HPA from Cadoux, although the aim is to produce a 99.999% premium product.
Additional project revenue opportunities have been identified from by-products derived from processing the kaolin.
With the reserves statement and PFS milestones the final 10 million shares to the vendors of Cadoux, Kokardine Kaolin, will be put to shareholders for approval.
Shares in FYI closed yesterday off 4.8% to A7.8c, capitalising the company at $14.5 million.
