Donald Project Phase 1 Shows 22.1% IRR with $439M Capex and Early Construction Started

Regulatory Milestones Achieved

Astron Corporation Limited (ASX – ATR) has reached a significant development milestone with the Victorian Government’s approval of the Work Plan for its Donald Rare Earth and Mineral Sands Project. This approval marks the final major regulatory clearance required before construction and operation can commence on Phase 1 of the project. With all key permits now secured, Astron is positioned to move forward confidently toward its Final Investment Decision (FID), targeted for later this year.

Robust Economic Outlook for Phase 1

Post quarter-end, Astron released an updated economic study for Phase 1, covering 17% of its total mineral resources. The study reveals a pre-tax real net present value (NPV8) of $837 million and an internal rate of return (IRR) of 22.1% over a 42-year mine life. Despite downward revisions in rare earth and mineral sands price forecasts since the 2023 Definitive Feasibility Study, the project maintains strong fundamentals, projecting $3.4 billion in free cash flow and $4.9 billion in EBITDA. Capital expenditure is estimated at $439 million (real March 2025), with 94% based on tendered or market prices, underscoring cost discipline and market alignment.

Production and Engineering Progress

Phase 1 is expected to produce 229,000 tonnes per annum of heavy mineral concentrate, including 43,000 tonnes of zircon and 99,000 tonnes of ilmenite, alongside 7,200 tonnes per annum of rare earth element concentrate (REEC). Notably, the REEC output contains significant quantities of critical rare earths such as neodymium, praseodymium, dysprosium, and terbium, meeting substantial portions of U.S. annual demand. Engineering design is well advanced, with 96% of the project at preliminary design stage or better, supported by early contractor involvement from Sedgman Pty Ltd. Early construction activities have commenced, including the raw water pipeline installation, signaling tangible progress on the ground.

Strategic Corporate Moves and Financing

In parallel with project development, Astron completed the sale of its interests in the Niafarang mineral sands project in Senegal to Harmony Group, while retaining a royalty and first right of refusal on future production. The company also secured near-unanimous shareholder approval to redomicile its parent entity from Hong Kong to Australia, a move expected to finalize in early September 2025. On the financing front, Astron is actively engaging with lenders and export credit agencies to secure a funding package targeting a balanced 50 – 50 debt-to-equity ratio, a critical step toward the FID.

Looking Ahead

While the Donald Project remains the company’s primary focus, Astron’s wholly owned Jackson Project, adjacent to Donald, holds substantial mineral resources and is earmarked for development following Phase 2 of Donald. Meanwhile, Astron’s China operations continue processing existing inventories with plans underway for plant expansion. Collectively, these developments position Astron as a growing player in the rare earth and mineral sands sector, with a clear pathway to production and value creation.