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FYI Resources (ASX:FYI) - Managing Director, Roland Hill
Managing Director, Roland Hill
Source: Sydney Morning Herald
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  • FYI Resources (FYI) has announced an 87 per cent increase in net present value to US$1.014 billion (roughly A$1.3 billion) for its WA-based high purity alumina (HPA) project
  • FYI released an updated definitive feasibility study to better reflect process improvements and the exchange rate since the first study was completed last year
  • Additional changes include higher annual production of 4N HPA and an annual earnings before interest, taxes, depreciation and amortisation (EBITDA) growth from US$133 million (roughly A$174.8 million) to US$186 million (roughly A$244.5 million)
  • Further, the AUD–USD exchange rate led to capital expenditure increasing from US$189 million (roughly A$248.4 million) to US$202 million (roughly A$265.5 million)
  • FYI Resources will now focus on securing a joint venture with alumina producer, Alcoa, making a final investment decision and completing further studies
  • Company shares are up 5.41 per cent to trade at 58.5 cents

FYI Resources (FYI) has released an updated definitive feasibility study (DFS) for its high purity alumina (HPA) project in WA.

The DFS was first released in March last year, however, FYI has delivered an updated version to better reflect process improvements and a clearer pathway to commercially producing HPA for the LED and lithium-ion battery markets.

Specifically, FYI has conducted flowsheet advances, process redesign, production optimisation and multiple test work programs to optimise and de-risk the project.

The biggest take away from today’s update is a post-tax net present value (NPV) increasing by 87 per cent to US$1.014 billion (roughly A$1.3 billion). This increase reflects technical and commercial improvements, market applied metrics, updated inputs and a discount rate of 8 per cent.

Additional changes to the original DFS include the AUD–USD exchange rate impacting the project capex from US$189 million (roughly A$248.4 million) to US$202 million (roughly A$265.5 million).

However, FYI Resources can expect an increased post-tax internal rate of return of 55 per cent compared to 46 per cent, and an annual earnings before interest, taxes, depreciation and amortisation (EBITDA) growth from US$133 million (roughly A$174.8 million) to US$186 million (roughly A$244.5 million).

Further updates include revised annual production which has gone from 8000 tonnes of 4N HPA (99.99 per cent aluminium oxide) per annum to 8500 tonnes and 1500 tonnes of 5N HPA (99.999 per cent aluminium oxide) per annum.

“The updated DFS outcome represents a persuasive economic case and demonstrates the merit of the project in being developed as potentially one of the HPA sector’s highest quality, lowest capital and operating cost projects,” Managing Director Roland Hill said.

While the revised DFS represents an important milestone, there remains some technical improves and other opportunities which haven’t been included.

The company will now focus on entering a joint venture with alumina producer Alcoa complete further studies and a final investment decision, sign customer agreements, investigate more internal revenue streams and new demand growth sectors.

Company shares are up 5.41 per cent to trade at 58.5 cents at 10:49 am AEDT.

FYI by the numbers
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