Donald Project Phase 1 Shows 22.1% IRR on $439M Capital Spend

Robust Economics Signal Strong Project Viability

Astron Corporation Limited (ASX, ATR) has taken a significant stride towards the Final Investment Decision (FID) for its Donald Rare Earth and Mineral Sands Project in Victoria, Australia. The company released updated project economics for Phase 1, revealing a pre-tax net present value (NPV8) of AUD 837 million and an internal rate of return (IRR) of 22.1% over a 42-year mine life. These figures underscore the project's financial resilience amid evolving rare earth and mineral sands markets.

With a capital expenditure (CAPEX) estimate of AUD 439 million; 94% of which is based on tendered or market prices; the project is positioned for cost competitiveness. Operating expenditure (OPEX) is forecast at AUD 736 per tonne of product, supporting robust margins given average annual revenue projections of AUD 291 million and EBITDA of AUD 118 million.

Strategic Production and Market Positioning

Phase 1 production targets an average annual output of 229,000 tonnes of heavy mineral concentrate (HMC) and 7,200 tonnes of rare earth element concentrate (REEC). The REEC is rich in critical rare earths such as neodymium, praseodymium, dysprosium, and terbium; elements vital for electric vehicles, renewable energy technologies, and advanced manufacturing. Notably, the project’s REEC output could supply up to 250% of the annual U.S. demand for neodymium and praseodymium, and significant portions of dysprosium and terbium requirements.

Binding offtake agreements are in place, with Energy Fuels Inc. securing 100% of the REEC production, reinforcing the project's alignment with Western supply chain diversification efforts. The HMC product, containing zircon and titanium minerals, will be exported primarily to China, with processing optionality maintained through Astron’s downstream facilities.

Regulatory and Engineering Milestones Achieved

The project has secured key regulatory approvals, including the Victorian Government’s Work Plan and environmental clearances under the Environment Protection and Biodiversity Conservation Act. Engineering design is well advanced, with 96% of the process plant design at preliminary stage or better, supported by early contractor involvement with Sedgman Pty Ltd.

Phase 2, planned to duplicate Phase 1 mining and processing operations, is expected to be funded from operating cash flow and will materially enhance the project’s economics and production scale. The phased development approach leverages only 17% of Astron’s total estimated mineral resources, indicating substantial upside potential.

Community and Environmental Commitment

Astron has demonstrated a strong commitment to environmental management and community engagement. The project area, largely agricultural land in the Wimmera region, benefits from extensive stakeholder consultation and cultural heritage management plans developed in partnership with Traditional Owners. Environmental management frameworks address water, biodiversity, radiation, and rehabilitation, ensuring compliance with stringent regulatory standards.

Community benefits are projected to be significant, with an estimated contribution of AUD 2.2 billion to the regional economy over the mine life and creation of over 500 jobs annually. The company continues to address social risks proactively, focusing on rehabilitation, water management, and local employment.

Looking Ahead to Final Investment Decision

Astron targets a positive FID by late 2025, with first production expected in the fourth quarter of 2027. Key pre-FID activities include finalising project financing, awarding mining and logistics contracts, and completing remaining local approvals. The project’s timing is opportune, given tightening global supply of zircon and rare earth elements amid growing demand driven by urbanisation and the energy transition.