Anax Metals has released an updated Definitive Feasibility Study for its Whim Creek Copper Project, confirming robust economics with a pre-tax NPV of A$501 million and an IRR of 98%, underpinned by a 10-year mine life and rapid payback.
- Pre-tax NPV of A$501 million and IRR of 98% based on forecast prices
- Free cashflow forecast of A$723 million with rapid 14-month payback
- 10-year mine life producing copper, zinc, lead, silver, and gold concentrates
- Development cost estimated at A$91 million with Anax’s share at A$76 million
- Multiple non-binding debt funding offers up to A$57 million under evaluation
Robust Economics Confirmed
Anax Metals Limited has delivered a significant update to its Definitive Feasibility Study (DFS) for the Whim Creek Copper Project, located in Western Australia's Pilbara region. The updated study highlights a pre-tax Net Present Value (NPV) of A$501 million and an internal rate of return (IRR) of 98% based on forecast commodity prices, underscoring the project's strong economic potential.
The project’s free cashflow is forecast at A$723 million over its life, with a notably rapid payback period of just 14 months. These figures represent a substantial improvement over the previous 2023 DFS, with free cashflow increasing by 113% and NPV by 123%, reflecting the impact of higher commodity prices and updated cost assumptions.
Project Overview and Production Profile
Whim Creek is a fully permitted, development-ready base metals project with a proposed 400,000 tonnes per annum concentrator. The mine life is projected at 10 years, supported by proven and probable ore reserves of 4.6 million tonnes grading 1.36% copper, 2.31% zinc, 0.67% lead, 30 grams per tonne silver, and 0.27 grams per tonne gold. The project will produce separate concentrates of copper, zinc, and lead, with silver and gold as valuable by-products.
Average annual production is expected to be 13,000 tonnes of copper equivalent metal over the first eight years, benefiting from high-grade ore and existing infrastructure. The project’s capital intensity is competitive at approximately US$4,000 per annual tonne of copper equivalent, aided by pre-concentration technologies such as ore sorting and in-line pressure jigs that reduce waste and improve feed grade.
Development Costs and Funding
The total development cost is estimated at A$91 million, including A$77 million in pre-production capital expenditure and A$14 million in working capital. Anax Metals, holding an 80% interest, will contribute approximately A$76 million towards these costs. The company is actively evaluating multiple non-binding debt funding offers totaling up to A$57 million, covering about 75% of Anax’s development contribution.
While funding is not yet secured, Anax is encouraged by the quality and scale of interest from reputable debt and off-take providers. The company is also considering alternative value realisation strategies such as joint ventures or partial sales, which could impact ownership but potentially accelerate development.
Technical and Operational Highlights
The DFS update incorporates updated capital and operating costs, mine designs, and commodity price assumptions. Notably, the Evelyn underground mine design has been revised with increased level spacing, resulting in a modest increase in reserves. The project benefits from substantial existing infrastructure, including haul roads, power supply, and water resources, which significantly reduce upfront capital requirements.
Logistics are well supported by proximity to major ports at Port Hedland and Karratha, with concentrate transport optimised through containerisation and efficient port handling. The project also plans to investigate expanding concentrator capacity from 400ktpa to 500ktpa, which could boost production by 25%.
Future Upside and Exploration Potential
Anax Metals sees several avenues for future value enhancement, including reserve growth from ongoing drilling at the Salt Creek deposit, which remains open at depth. The company also plans to explore the addition of a pyrite flotation circuit to recover additional silver and gold currently reporting to tailings, potentially adding significant cashflow.
Further studies on heap leach processing of low-grade sulphides are underway, with prior work indicating potential incremental free cashflows of around A$70 million. Regional consolidation and satellite asset development are also part of Anax’s strategic vision to establish Whim Creek as a processing hub in the Pilbara.
Bottom Line?
With strong DFS metrics and active funding discussions, Anax Metals is poised to advance Whim Creek towards a Final Investment Decision, but funding and exploration outcomes remain key to unlocking full value.
Questions in the middle?
- Will Anax secure the full $76 million funding on favourable terms without significant dilution?
- How will exploration results at Salt Creek impact reserve growth and project economics?
- What is the timeline and likelihood for environmental approvals for the Evelyn underground mine?