Anax Metals (ASX: ANX) has confirmed compelling economics for its Whim Creek project in a new Definitive Feasibility Study (DFS).
The updated DFS for the Whim Creek project outlines a base-case scenario that projects a pre-tax NPV7 of A$501 million and an Internal Rate of Return (IRR) of 98%.
At spot prices, the project's economics improve further, with a pre-tax NPV7 of A$649 million and an IRR of 118%.
The study forecasts A$723 million in free cash flow under the base case over a 10-year mine life.
The project demonstrates a rapid payback period of 14 months under the base case, reducing to 12 months at spot prices.
Anax Metals' share of the pre-production capital expenditure is a modest A$76 million out of a total A$91 million.
Robust Project Metrics
The current concentrator capacity stands at 400 ktpa, with potential for expansion to 500 ktpa.
The ore reserves total 4.61 Mt at grades of 1.36% copper, 2.31% zinc, 0.67% lead, 30 g/t silver, and 0.27 g/t gold.
The production target is supported by 94% Proven & Probable resources, with 6% Inferred resources contributing to growth potential.
Funding Remains Key Focus
Securing definitive funding remains a critical element for the Whim Creek project.
Anax Metals has received non-binding funding offers of up to A$57 million targeting its 80% interest in the project.
Recent strategic placements and loans have worked to improve liquidity, including a A$2.4 million strategic placement with Gold Valley Pilbara (GVP), which took a strategic 19.9% stake.
A A$3.5 million Jetosea loan also facilitated the repayment of previous convertible notes, concluding arrangements with Mineral Development Partners (MDP).
Anax Metals is actively engaged in discussions with various debt and equity funders to secure the necessary capital for a final investment decision (FID).
Development Path and Existing Infrastructure
The Whim Creek project is well-positioned for development, being fully permitted for mining and processing operations.
The timeline from FID to production is an efficient 18 months, underscoring the project's readiness.
Leveraging existing infrastructure at the site, the project is designed for a 10-year mine life.
It is expected to deliver average annual copper equivalent (CuEq) production of approximately ~13 kt for the first eight years of operation.
Upside Potential and Strategic Initiatives
Beyond the base-case economics, Anax Metals is pursuing several strategic initiatives and upside drivers.
These include further reserve re-estimation, optimising the concentrator capacity, and exploring expansion opportunities at the Salt Creek deposit.
Advancements in bioleaching technology and an advanced ore sorting intellectual property offer potential for improved processing efficiencies and recoveries across oxide, transitional, and satellite deposits.
The company also continues to pursue the monetisation of waste rock through road base and aggregate sales, providing a potential near-term revenue stream.
Regional consolidation with satellite assets forms another key strategy, aiming to increase overall throughput and unlock significant economies of scale for the Pilbara Base Metal Alliance.
Anax Metals' Compelling Economics and Clear Development Path
Anax Metals' updated DFS presents a highly attractive economic case for Whim Creek, characterised by strong NPV, IRR, and rapid payback, supported by a manageable capex and a fully permitted project.
While the project economics are robust, securing definitive funding remains the critical near-term catalyst, alongside realising the significant upside potential from exploration and strategic initiatives.
Ensuring the full A$76 million Anax share of capital expenditure is crucial moving forward.
