Cape Alumina's Pre-Feasibility Study delivers positive returns for Pisolite Hills

Cape Alumina's Pisolite Hills project has already been declared a Project of State Significance by the Queensland Government, with the project now delivering 'attractive financial returns'.

Signficantly, the study forecasted that at full production it could produce at an FOB cash operating cost of around $23 per tonne of product bauxite (excluding royalties).

A major advantage for the project is that the higher alumina content of Cape York bauxite provides a pricing premium when compared to Indonesian bauxite prices.

An updated Pre-Feasibility Study (PFS) for the company’s Pisolite Hills Mine and Port project (Pisolite Hills), has confirmed the technical and economic feasibility of as a 7.5 million dry product tonnes per annum bauxite mine producing high-quality, export-grade bauxite over a life of 14 years, based on a 134 million tonne bauxite resource.

Of the resource, 67% is in the higher confidence Measured or Indicated categories.

The project is located on the western Cape York in far North Queensland and estimated to have a capital cost of $396 million and an internal rate of return of 25.6%.

Cape Alumina is now potentially in a position to tap the bauxite demands of China, with prices having strengthened and remain firm.

Also helping Australian bauxite companies is Indonesia’s 20% export tax (applied since July 2012) which has added about US$4-5/t to the cost of Indonesian bauxite.

Indonesia has legislated to ban bauxite exports from 12 January 2014.

At the end of March 2013, Cape Alumina had around $3 million in cash.