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MINING | Centrex Metals
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CENTREX M E TA L S
Phosphate production for fertiliser markets across the APAC region
MINING | Centrex Metals Therefore, the decision to move into Centex Metals was formed phosphate mine development made sense back in 2001 and listed on the from a thematics perspective, according to ASX in 2006 as a developer Slesarewich. Centrex’s starting point in the of iron ore projects in South business was the Oxley Potash Project in Australia, signing two large Western Australia, which was acquired in joint venture agreements with 2015. Chinese steel firms in 2010. But, anticipating the oversupply of At around the same time it purchased the iron ore into global markets, Oxley project, Centrex identified the Ardmore Centrex soon began a process Phosphate Rock Project in Queensland as of diversification into other bulk a high priority, owing to its close alignment with the company’s new focus. While it took commodities. Today, Centrex is some time to unlock the project, it has been focused on the development of phosphate projects in Australia owned by Centrex for two years now and is to feed fertiliser markets in the the firm’s flagship development. Asia-Pacific (APAC) region. “We have an increasing middle class Slesarewich was appointed CEO of Centrex in April 2019, bringing a track record of success in the APAC region and arable in mine development across Queensland land is decreasing because of over a 20+ years career. Next to Slesarewich that growth,” says CEO Simon in the firm’s new look leadership is CFO Slesarewich. “Therefore, there Mark Terry. He also brings over 20 years of is a requirement to get more experience in financial roles for mining firms. productivity out of each of those Together, they lead the senior management hectares used for production team from Centrex’s head office in Adelaide. of important plant-based food The flagship project crops.” Based on the results of Centrex’s definitive
Phosphate is essential to the production
feasibility study (DFS), the Ardmore project
of fertilisers, which provide vital nutrients
is a high-quality asset with a relatively low
to plant-based crops, boosting yields and
capital requirement, low technical risk and
supporting food supplies for growing
the potential to provide strong returns.
global populations, particularly in the APAC region, which contains 60% of the world’s
“At Ardmore, we have been blessed with a
population and continues to grow at a rapid
combination of premium grade phosphate
rate.
rock and ultra-low cadmium content. Our product will be delivered to the processing
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MINING | Centrex Metals
plant at around 30% P2O5 [phosphorous
An optimised DFS was published in February
pentoxide], compared to the mid-teens for
2019 and laid bare the economics involved
most other projects around the world.
in the delivery of the project, including capex which has been estimated at AUS$69 million
“Therefore, we’re able to easily make a
providing an initial payback of 1.8 years for a
high grade product at around 34-35% P2O5,
10-year operation.
via simple washing of the ROM ore,” says Slesarewich. Meanwhile, the low cadmium
Although much of the infrastructure required
content of the ore means that local
for the project is already in place, with
manufacturers can use the product without
a railway line only 90 km away that can
the need for blending.
support the delivery of material to the Port
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of Townsville, thereby negating the need
items. That makes it a lower risk delivery
to develop costly and long lead logistics
methodology.
infrastructure.
Low risk capex requirements
“And, we think there is a very significant opportunity to decrease our operating costs by looking at bulk handling solutions. The
“Overall, the capex does not include any
base case in the DFS was to containerise the
high risk investments with large pieces of
material and use rotainers throughout the
capital that need to be delivered. Instead,
logistics chain, but we are now looking into a
it’s quite a group of small projects like roads,
bulk rail and bulk port solution.”
camps, office blocks and other infrastructure
MINING | Centrex Metals
On top of that, the state government recently
Global for the mineral resources, Optima
announced an annual $20 million subsidy
Consulting & Contracting for the ore reserves
to users of the Mount Isa to Townsville rail
and mining, GR Engineering Services for
line, for the next four years, which will reduce
process and mine site infrastructure as well
access charges on the line. Centrex hopes to
as overall compilation of the study.
take advantage of this in the final two years of the arrangement.
The start-up mine Centrex has designed a start-up mine facility
Elsewhere in the DFS, the optimisation
at Ardmore which will produce up to 30,000
increased the project’s pre-tax NPV by 56%
tonnes of premium concentrate, ahead
to $269 million with an IRR of 63%, while
of the upgrade to the full-scale mine. The
annual production at Ardmore has been set
start of June saw the arrival of the modular
at 800,000 wet tonnes – making it one of the
processing plant for the trial mine, which
most significant undeveloped phosphate
should be commissioned before the end of
deposits in Australia.
the year.
Key contributors to the DFS included RPM
Once the start-up mine is fully operational, the company plans to ship 5,000 tonnes trial
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shipments to priority potential customers.
“The company is very pleased to be
This underlines the importance of the start-
partnering with one of New Zealand’s
up mine with regards to securing long-term
leading fertiliser producers in Ballance,” said
offtake contracts for Centrex’s product.
Slesarewich after the deal was announced. “The contract validates the quality of
“What we need to do is get a couple of large
Ardmore’s product and its attractiveness to
bulk samples out to high priority customers,
target customers.”
let them process the product and that should underpin offtake negotiations for next year.”
Meanwhile, the Northern Australian Infrastructure Facility (NAIF) completed a
Centrex has already signed off two 5,000
strategic assessment of the Ardmore project
tonnes trial shipments with priority
in May and is currently engaged on a due
customers based in New Zealand, the latest
diligence investigation into the viability of
of which is with nutrient supplier Ballance
Centrex receiving funding assistance through
Agri-Nutrients, who previously trialled 400
the $5 billion facility, which aims to provide
wet tonnes of run-of-mine ore from Ardmore
loans and support the development of
to produce single superphosphate.
infrastructure projects in Northern Australia.
MINING | Centrex Metals
Full steam ahead
“We’ve also got some near-mine exploration
Centrex is continuing to make steady
that we can look at to increase the mine life
progress on its path towards full-scale
around the existing mine plan at Ardmore,
production at the Ardmore project, which
and there are some high priority exploration
is slated for late 2021. Before that, the
targets within trucking distance as well.
company must wrap up offtake and financing agreements next year, while construction of
“We will look at other similar style deposits
the mine is planned to commence at the end
in the Queensland region to see if we’re able
of 2020.
to get involved in those projects and use the
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“At Ardmore, we have been blessed with a combination of premium grade phosphate rock and ultra-low cadmium content. Therefore, we’re able to easily make a high grade product” Simon Slesarewich, CEO Centrex Metals In summary, Centrex is closing in on the development of the uniquely positioned Ardmore Rock Phosphate project in Queensland – a high grade, minimal capex project that will benefit from existing infrastructure, along with attractive state subsidies and funding support facilities. When it starts up full-scale production in 2021, the project will become the latest significant source of phosphate for fertiliser markets in the APAC region, helping to enhance the growth of plant-based crops knowledge from Ardmore to deliver those
that are vital in feeding the ever-expanding
projects as well.”
population in the region.
ASX:CXM
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Published by Anderson Murray Media Ltd
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