Perpetual Resources (ASX:PEC) - Executive Chairman, Julian Babarczy
Executive Chairman, Julian Babarczy
Source: Livewire Markets [YouTube]
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  • Perpetual Resources (PEC) has released its long-awaited pre-feasibility study (PFS) for the Beharra Project in Western Australia
  • Additionally, the company released a maiden probable ore reserve of 64.1 million tonnes at 98.6 per cent silicon dioxide
  • The PFS highlighted Beharra as a long-term key supplier of silica sands for the glass and foundry sand markets
  • The study outlined an annual production rate of 1.5 million tonnes over 32 years
  • It also noted a life-of-mine (LOM) revenue of $4.98 billion and pre-production capital of $34.4 million (excluding contingency) with a two-year payback period
  • Now that Perpetual has achieved this milestone, it will move towards a project-wide study and funding options with an aim to start production from late 2022
  • Perpetual ended the day 11.8 per cent in the red with shares closing at 8.2 cents

Perpetual Resources (PEC) has released its long-awaited pre-feasibility study (PFS) for the Beharra Project in Western Australia.

The PFS has outlined Beharra to be a highly compelling, long-life silica sands project that’s set to become a key supplier of high-quality silica sands for the glass and foundry sand markets.

Not only did the study outline strong financial metrics, it also assigned the Beharra Project a maiden probable ore reserve of 64.1 million tonnes at 98.6 per cent silicon dioxide.

This is estimated to produce a saleable product of 47.6 million tonnes at 99.6 per cent silicon dioxide. The saleable products were produced as part of metallurgical test work.

“This test work and the resultant ore reserve estimate clearly demonstrates that the Beharra end product is suitable for sale into the Asia Pacific glass and foundry sand industries, with the product readily positioned in a higher end segment of the market,” Managing Director Robert Benussi said.

Pleasingly, Perpetual recently upgraded Beharra’s mineral resource estimate by 25 per cent from 111 million tonnes to 139 million tonnes at 98.6 per cent silicon dioxide. The resource also shifted from the inferred to the indicated category.

In terms of the PFS results, it estimated an annual production rate of 1.5 million tonnes to total 48 million tonnes of silica sand over an initial 32-year mine life.

It also outlined a life-of-mine (LOM) revenue of $4.98 billion and an ungeared internal rate of return of 55 per cent.

To get the project into production by late next year, Perpetual will need to fork out $34.4 million in pre-production capital, excluding about a $4.8 billion contingency. However, the payback period is two years which is fairly rapid.

Further, the study detailed total LOM capital expenditure to be $77 million, earnings before interest, taxes, depreciation and amortisation to be $1.7 billion and total LOM free cashflow to be $1.1 billion.

“In the Perpetual board’s view, Beharra now sits atop all other projects in the region and we are excited to continue our rapid development as we move towards a subsequent project study and/or a decision to fund later in calendar year 2021,” Robert concluded.

Perpetual ended the day 11.8 per cent in the red with shares closing at 8.2 cents.

PEC by the numbers
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