Exhibit
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Description
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Press Release issued by IperionX Limited
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Technical Report Summary for the Titan Project, dated June 30, 2022.
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IPERIONX LIMITED
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(registrant)
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Date: July 1, 2022
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By:
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/s/ Anastasios Arima
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Name: Anastasios Arima
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Title: Chief Executive Officer
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![]() |
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PRESS RELEASE | NASDAQ: IPX | ASX: IPX
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June 30, 2022
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Corporate Office
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Tennessee Office
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Salt Lake City Office
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129 W Trade St, Suite 1405 Charlotte, NC 28202
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279 West Main Street Camden, TN 38320
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1782 W 2300 S, West Valley City, UT 84119
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o |
Scoping Study confirms the potential for the Project to be the largest U.S. producer of titanium and the rare earth minerals, monazite and xenotime, which includes both light and heavy rare
earths.
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o |
In-situ metal content of titanium and rare earths over the life of the Project represents potential production of ~60,500 Boeing 787s and ~24,000,000 electric vehicles.
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o |
Potential to satisfy 100% of the U.S. Department of Defense needs for titanium and the heavy rare earths required for national security.
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o |
Opportunity for a rapid and low capex entry to the U.S. rare earth supply chain, utilizing Energy Fuels’ existing White Mesa mill in Utah.
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o |
Potential to develop a domestic source of critical minerals in the U.S. with significant cashflow generation underpinned by low costs.
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o |
Compares favorably to global projects and is located in a leading jurisdiction significantly closer to a large number of end user facilities.
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o |
Importantly, the Scoping Study do not yet consider the potential upside associated with integration of the Titan Project (minerals business) and the Company’s breakthrough titanium metal
technologies (metals business).
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o |
100% interest in over 11,000 acres of titanium, rare earth minerals and zircon rich mineral sands properties in Tennessee, U.S.
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o |
Production target of 243 million tons of mineralized material over a life of mine of 25 years covers less than 4,500 acres of the current land position controlled by the Company.
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o |
Significant potential to grow production and Project life in the future.
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o |
Significant cost advantages due to the location and proximity to existing low cost, world-class infrastructure.
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o |
Major logistical advantage over many other critical minerals imported into the U.S. provides the potential for a further cost advantage and a lower carbon intensity supply chain.
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o |
Actively taking a “sustainable first” approach to all areas of development with a focus on zero carbon power, sustainable rehabilitation practices and community engagement.
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o |
Building trust, broadening support, improving knowledge and promoting community participation and engagement in the development of the Titan Project.
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o |
Mineral demonstration facility at Titan Project being completed to facilitate feasibility test work, customer offtake discussions, downstream R&D and community engagement.
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o |
Feasibility study metallurgical test work already underway after successful completion of pre-feasibility level test work in early 2022.
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o |
Optimization for mine planning, processing and permitting pathway underway to facilitate a 2023 construction ready timeline.
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Measure
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Unit
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Value
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Production
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Life of mine (LOM)
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years
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25
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Mineralized resource mined
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Mt
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242.6
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Annual average throughput
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Mt/y
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9.7
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Annual average production – rare earth concentrate
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t/y
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4,650
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Annual average production – rutile
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t/y
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16,700
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Annual average production – ilmenite
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t/y
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95,500
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Annual average production – premium zircon
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t/y
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22,400
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Annual average production – zircon concentrate
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t/y
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16,100
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Operating and Capital Costs
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Unit operating costs (incl. royalties & transport)
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US$/t ROM
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6.91
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Annual average operating costs (incl. royalties & transport)
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US$M/y
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67
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Total initial capital cost
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US$M
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237
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Direct capital cost
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US$M
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158
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Indirect capital cost
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US$M
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30
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Contingency (30%)
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US$M
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49
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NPV to capex cost ratio
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-
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2.9x
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Financial Performance
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LOM revenue
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US$M
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4,600
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LOM EBITDA
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US$M
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2,923
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Annual average revenue
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US$M/y
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184
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Annual average EBITDA
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US$M/y
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117
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Payback from start of operations
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years
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1.9
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EBITDA US$M
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Year 1
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Year 2
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Year 3
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|
Titan Project – Scoping Study
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122
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173
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116
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MP Materials – Forecast at De-SPAC3
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8
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29
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82
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Financial Performance
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Unit
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Base Case
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Prolonged supply constraints
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Average annual revenue
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US$M/y
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184
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234
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Average first five-year EBITDA
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US$M/y
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118
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178
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Payback from start of operations
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years
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1.9
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1.3
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Tennessee, U.S.
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Western Australia
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Power
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US$0.06/kWh (100% renewable)
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US$0.13/kWh
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Operator - base salary
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US$50,000
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US$125,000
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FIFO camp
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![]() |
✔
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Federal corporate tax
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21%
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30%
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Depletion allowance
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22% for HMS and 14% for monazite
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nil
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Shipping Route
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Distance
(km)
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CO2 per trip
(tons)
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CO2 / t product
(kg, approx)
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Western Australia – Mobile
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20,000
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5,000
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115
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South Africa – Mobile
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15,000
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3,750
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85
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Norway – Mobile
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9,000
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2,300
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50
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2022
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2023
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Q2
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Q3
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Q4
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Q1
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Q2
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Q3
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Q4
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Opportunities & permit review
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Pre-feasibility study
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||||||||
Feasibility bulk sample & test work
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Feasibility study
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Permitting
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||||||||
Shovel ready / FID
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Titan Project Opportunities
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Opportunity
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Potential Effect
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Mineral Extraction
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Evaluation of dozer push and other mineral extraction techniques
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Lower operating costs
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Conversion of inferred to indicated & measured resources and optimization of mineral extraction plan
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Lower operating costs
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Expansion of mineable mineral resources
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Increased production /
longer operation life
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Processing
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Evaluation of phased build-out of operations
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Lower capital costs
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Integration of product upgrading technologies including IperionX developed synthetic rutile process
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Increased sales pricing
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Further confirmation test work is planned to proceed during the next phase of the project development.
The following overall (WCP & MSP) recoveries are assumed in the Study based on test work interpretation and typical industrial practices.
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Mineral
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Overall Recovery
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Ilmenite |
82.6%
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Rutile |
60.9%
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Monazite | 77.1% |
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Zircon | 90.8% |
The Process Design can be described as following:
1. Run of Mine mineralized resource is processed in the Mobile Mining Unit (MMU) which removes trash & oversize. The undersize is pumped to the Feed Preparation Plant (FPP)
and Wet Concentrator Plant (WCP)
2. In the FPP, the feed is de-slimed to separate clay and the sand. The slimes are directed to the thickener where they are thickened and then filtered. The sand fed into a
constant density tank which is pumped to the rougher spiral stage at 1000 tph at the start of the WCP
3. The WCP comprises of multiple stages of spiral separators which produce a tailings and a heavy mineral concentrate (HMC) stream. The WCP tailings stream is dewatered and pumped
to the mining void while the HMC (at a target grade of >85% THM) is dewatered and trucked to the Monazite Separation Plant.
4. The Monazite Separation Plant which consists of a flotation circuit and wet gravity circuits, to produce a monazite product and an upgraded HMC which consists predominantly of
the titanium minerals & zircon minerals. The upgraded HMC is the feedstock for Mineral Separation Plant (MSP).
5. The MSP consists of a dryer, multiple stages of electrostatic separators, magnetic separators and wet gravity separators to produce ilmenite, rutile, premium zircon and zircon
concentrate.
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Infrastructure
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Refer to Section entitled ‘Infrastructure’ in the Announcement.
Titan Project is strategically located near Camden, Tennessee, and will benefit from significant cost advantages due to the location and proximity to low cost, world-class
infrastructure.
The existing infrastructure includes low-cost power and gas, with high-capacity transmission lines near the Project, abundant transportation infrastructure including the Norfolk
Southern mainline running through Camden, the major I-40 highway just 10 miles south of Camden and a major barge-loading point 15 miles from the Titan Project connecting to all major U.S. customers and export ports. Potential water
sources include nearby surface water bodies but will likely involve shallow groundwater.
The Project’s mineral sands resources and nearby Wet Concentrator Plant (WCP) are located approximately 17 miles northwest of the city of Camden, Tennessee. The Project also
includes a dry Mineral Separation Plant (MSP) that is located approximately 1.2 miles southwest of the city of Camden, Tennessee. The distance separating the two plants is approximately 19 miles and accessed via public roads and highways.
The Study was managed by Primero Group. Primero Group’s capabilities includes technical study, detailed engineering, procurement, construction management, and contract operations.
All infrastructure including on site non-process infrastructure related capital and operating costs were estimated by Primero Group.
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Marketing
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Refer to Section entitled ‘Market Studies’ in the Announcement.
Rare Earth Concentrates
Test work to date has highlighted that the rare earth minerals at the Titan Project contain a high percentage of rare earth oxides, with significant proportions of the highly
valuable heavy rare earths terbium and dysprosium as well as the valuable light rare earths neodymium and praseodymium identified within IperionX’s monazite and xenotime mineral concentrates.
In April 2021, IperionX and Energy Fuels signed a Memorandum of Understanding for the supply of monazite sands from IperionX’s Titan Project in Tennessee to Energy Fuels’ White
Mesa Mill in Utah. Energy Fuels and IperionX are continuing to evaluate expanding their collaboration to establish a fully integrated permanent rare earth magnet supply chain in the U.S.
In March 2022, Energy Fuels undertook laboratory evaluation of rare earth mineral concentrates from IperionX’s Titan Project in west Tennessee. Energy Fuels’ evaluation indicates
that IperionX’s rare earth minerals are suitable as a high quality feedstock to produce a high purity mixed rare earth carbonate at Energy Fuels’ White Mesa Mill in Utah. Energy Fuels is currently producing a mixed rare earth carbonate at
commercial scale at its mill. This commercial product is the most advanced rare earth material being produced in the U.S. today at scale.
Titanium Products
Titanium minerals found at the Titan Project are dominated by rutile and highly altered ilmenite, which are feedstocks for a variety of uses including for titanium dioxide,
titanium metal and other applications including welding and nanomaterials. Natural rutile is a high-grade titanium dioxide feedstock (typical TiO2 content of 92-95%), which commands a significant price premium in the titanium dioxide
market. Ilmenite is also a titanium dioxide feedstock (typical TiO2 content of 58-62%), which can be sold directly to pigment producers or can be used as a feedstock for synthetic rutile production.
Test work to date indicates that ilmenite mineral found at the Titan Project is likely to be suitable for the chloride ilmenite market, with a TiO2 content greater than 58%.
Additionally, the rutile product has the potential to be a high-grade feedstock, with a TiO2 content of between 93% and 97%.
In December 2021, the company entered into a Memorandum of Understanding with The Chemours Company (Chemours) for the supply of the titanium feedstocks ilmenite and rutile from
IperionX’s Titan Project in west Tennessee to Chemours. Chemours is one of the world’s largest producers of high quality titanium dioxide products for coatings, plastics, and laminates, with a nameplate titanium dioxide capacity of
1,250,000 tons globally, including New Johnsonville, Tennessee, located 20 miles from IperionX’s Titan Project, and DeLisle, Mississippi, located 1,100 miles by back haul barge on the Mississippi River.
The MoU contemplates the commencement of negotiations of a supply agreement between IperionX and Chemours for an initial five year term on an agreed market based pricing
methodology for the annual supply of up to 50,000 tons of ilmenite and 10,000 tons of rutile, which is equivalent to approximately 50% of total ilmenite production and approximately 60% of total rutile production over the first 5 years of
operations at the Titan Project.
Zircon Products
Test work to date indicates that zircon mineral found at the Titan Project is likely to be suitable for the premium zircon market, with a ZrO2+HfO2 content greater than 65%, with
the potential to be sold into the domestic U.S. zircon premium market.
In February 2022, the company entered into a Memorandum of Understanding with Mario Pilato BLAT S.A. (Mario Pilato) for the potential supply of zircon products. Mario Pilato is a
leading international supplier of raw materials for ceramics, glass and refractories, headquartered in Valencia, Spain The MoU contemplates the commencement of negotiations of a supply agreement between IperionX and Mario Pilato for an
initial five year term on an agreed market based pricing methodology for the annual supply of up to 20,000 tons of zircon products from the Titan Project, which is equivalent to approximately 50% of total zircon production over the first
5 years of operations at the Titan Project.
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Price Forecasts
The Company engaged Adamas Intelligence, an independent research and advisory consultant focused on strategic metals and minerals, to provide a pricing methodology and price forecast for rare earth
concentrates produced at the Titan Project. The pricing methodology is based upon Adamas’ forecast pricing of IperionX’s rare earth concentrates with reference to the value of rare earth oxides contained, with a premium applied by
Adamas for the specific rare earth oxide enrichment, including heavy rare earths, contained within the Titan Project product.
The Company has utilized commodity pricing based upon forecasts from TZMI for ilmenite, rutile and zircon products, adjusted for economic factors. TZMI is a global independent consulting and
publishing company which specializes in all aspects of the mineral sands, titanium dioxide and coatings industries, particularly the titanium and zirconium value chains. Zircon concentrate pricing forecasts have been assessed by the
Company as receiving a 55% discount to the price of premium zircon, a standard industry benchmark discount.
IperionX will continue to focus on developing market relationships and discussions with potential off-take partners.
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Economic
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Refer to Sections ‘Capital and Operating Costs’ and ‘Economic Analysis’ in the Announcement.
Capital Estimates for the mine and process plant have been prepared by Primero Group using a combination of cost estimates from suppliers, historical data, reference to recent
comparable projects. Costs are presented in US$ for Q2 2022 and are exclusive of escalation. The intended accuracy of the initial capital cost estimate for the Project is ± 35%.
Capital costs include the initial capital and deferred and sustaining capital. Capital costs make provision for mine closure and environmental costs.
The capital cost estimate (CAPEX) was developed in two parts:
1) Direct costs for the mine pre-production, wet concentrate plant (WCP), mineral separation plant (MSP), common services including
reagents and air/water services and non-process infrastructure.
2) Indirect costs were estimated for engineering, construction, and owner’s costs.
For the mine, the CAPEX estimation is based on the following aspects: clearing & grubbing, mine development, pumping & infrastructure, mobile mining equipment, and mining
contractor mobilization.
For the WCP and MSP facilities, the process design criteria, flowsheets and mass balance calculations were produced with sufficient detail to allow for the preparation of a
mechanical equipment list. Equipment pricing was collected from benchmark information. The Project used as a benchmark is a similar circuit producing both WCP and MSP products. The Project is currently under construction in Australia,
being managed by Primero. The overall supply cost of mechanical equipment was then used to factor all other direct discipline costs such as concrete, steelwork, platework, piping, electrical, and instrumentation and control. These
factors were also derived from the benchmarked project.
In-direct costs, including EPCM, off-site management, capital spares, flights and accommodation, first fills and commissioning costs were also factored from the Project direct
costs.
Project contingency was calculated as a factor of the total direct and in-direct costs.
For the (NPI) non-process infrastructure, allowances were made for some costs not related to the mechanical equipment supply including process buildings and non-process
infrastructure.
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The cost estimate basis along with the exchange rates used for the Project CAPEX is 0.73 USD/AUD.
There are no government royalties associated with the Project.
A royalty of 5% of revenue generated is included based on the average land lease agreement.
Rehabilitation and mine closure costs are included within the reported operating cost and sustaining capital figures.
A detailed financial model and discounted cash flow (DCF) analysis has been prepared by the Company, using inputs from the various expert consultants, in order to demonstrate
the economic viability of the Project. The financial model and DCF were modelled with conservative inputs to provide management with a baseline valuation of the Project.
The DCF analysis demonstrated compelling economics of the prospective Project, with an NPV (after-tax, at an 8% discount rate) of US$692 million and an IRR of 40%.
The DCF analysis also highlighted the low operating costs, low royalties, and low corporate tax rates.
Sensitivity analysis was performed on all key assumptions used. The robust Project economics insulate IperionX’s Titan Project from variation in market pricing, capital expense,
or operating expenses.
Payback period for the Project is 1.9 years from the start of operations. The payback period is based on free-cash flow, after taxes.
IperionX estimates the total capital cost to construct the mine and process plants to be US$237 million.
IperionX has been working on progressing the Project to be construction ready during 2023 and production in 2025.The Company engaged the services of advisory firm, Taylor
Collison, with regards to Project economics. Taylor Collison is a financial advisory firm which specializes in multiple sectors, including metals and oil & gas. Taylor Collison is well regarded as a specialist capital markets
service provider and have raised project development funding for companies across a range of commodities including substantial experience in the industrial and specialty minerals sector.
Following the assessment of a number of key criteria, Taylor Collison has confirmed that, on the basis that a definitive feasibility study arrives at a result that is not
materially worse than the Scoping Study as noted above, IperionX should be able to raise sufficient funding to develop the Project. Taylor Collison has come to this view by examining a range of relevant aspects that may influence
funding. These include:
● The favorable strategic setting for the specific commodities prevalent at the Titan Project;
● The likely appetite of resources industry equity fund managers to support a funding scenario, based on the Scoping Study outcomes;
● Recently completed funding arrangements for similar development projects;
● The range of potential funding options available;
● The favorable IRR and margins generated by the Project; and
● The track record of the IperionX Board and management team.
An assessment of various funding alternatives available to IperionX has been made based on precedent transactions that have occurred in the mining industry, including an
assessment of alternatives available to companies that operate in industrial and specialty minerals sector. The assessment and advice from Taylor Collison indicates that, given the nature of the Project, funding is likely to be
available from a combination of resources funds (both traditional equity fund managers and strategic/private equity investors), debt (from commercial banks or non-bank resources lenders) and offtake backed funding agreements (with end
users). It is important to note that no funding arrangements have yet been put in place as these discussions continue to take place. The composition of the funding arrangements ultimately put in place may also vary, so it is not
possible at this stage to provide any further information about the composition of potential funding arrangement.
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The support of the local community is fundamental to IperionX’s license to operate, and the Company has conducted significant and regular community engagement activities since
it was established.
IperionX is dedicated to building sustainable community relationships, and is working in a structured way to allow the Company to continue to build trust, broaden support,
improve knowledge and promote community participation and engagement in the development of the Titan Project.
Groups and organizations with who IperionX regularly engages with include the Tennessee Department of Environment and Conservation, the Tennessee Valley Authority, the
University of Tennessee, Tennessee state government officials, local residents and business owners, local government officials, local school systems and technical colleges.
At March 31, 2022, the Titan Project comprised of approximately 11,071 acres of surface and associated mineral rights in Tennessee, of which approximately 137 acres are owned
and approximately 10,934 acres are subject to exclusive option agreements. These exclusive option agreements, upon exercise, allow us to lease or, in some cases, purchase the surface property and associated mineral rights. Other than
the option agreements, there currently are no material liens or encumbrances on the property comprising the Titan Project.
IperionX has received a Memorandum of Option or Memorandum of Contract signed by each landowner and each Memorandum is recorded in the local register of deeds. IperionX has
engaged Johnston, Allison & Hord, P.A. (“JAH”) to coordinate and review title searches for each optioned property to confirm that the respective landowners own and control both the surface real estate and mineral rights for the
Project. Preliminary title searches on all properties were completed as of the date of recording of each Memorandum of Option.
In order to develop the Project, we will be required to obtain new governmental permits authorizing, among other things, any site development activities and site operating
activities.
IperionX has engaged HDR to support permitting activities on the proposed Project.
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Study Overview
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Life of project
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25 Years
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Cost and pricing basis
|
2022 US$
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|
Currency
|
US Dollars
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Cost escalation
|
0%
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Revenue escalation
|
0%
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|
Study accuracy
|
±35%
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Mining
|
||
Mineral resource
|
431 Mt
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|
Portion of production target – indicated
|
57%
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Portion of production target - inferred
|
43%
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Annual average ROM production
|
9.7 Mt/y
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Life-of-mine average feed grade
|
3% HMS in-situ
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Mining recovery
|
100%
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Total mineralized resource mined
|
243 Mt
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Total waste rock
|
163 Mt
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Life-of-mine average strip ratio
|
0.67:1 waste:ROM
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|
Processing Plant
|
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Annual average production – rare earth concentrate
|
4,600 tons
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Annual average production – rutile
|
16,700 tons
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Annual average production – ilmenite
|
95,500 tons
|
|
Annual average production – premium zircon
|
22,400 tons
|
|
Annual average production – zircon concentrate
|
16,100 tons
|
|
Ilmenite recovery
|
82.60%
|
|
Rutile recovery
|
60.90%
|
|
Monazite recovery
|
77.10%
|
|
Zircon recovery
|
90.80%
|
|
Pricing
|
||
Ilmenite LOM weighted average realized price
|
US$311/t
|
|
Rutile LOM weighted average realized price
|
US$1,311/t
|
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Monazite LOM weighted average realized price
|
US$17,356/t
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Premium zircon LOM weighted average realized price
|
US$1,748/t
|
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Zircon concentrate LOM weighted average realized price
|
US$787/t
|
|
Other
|
||
Initial capital
|
US$237.2 million
|
|
Sustaining and deferred capital
|
US$198.5 million
|
|
Corporate tax rate
|
21% Federal & 6.5% State
|
|
Discount rate
|
8%
|
Contents | ||
1. | Executive Summary | 3 |
2. | Introduction |
8 |
3. | Property Description |
10 |
4. |
Accessibility, Climate, Local Resources, Infrastructure and Physiography | 12 |
5. | History | 14 |
6. |
Geological Setting, Mineralization, and Deposit | 15 |
7. | Exploration | 16 |
8. | Sample Preparation, Analyses, and Security |
17 |
9. | Data Verification | 19 |
10. | Mineral Processing and Metallurgical Testing |
20 |
11. |
Mineral Resource Estimate |
22 |
12. | Mineral Reserve Estimate |
29 |
13. |
Mining Methods |
30 |
14. |
Processing and Recovery Methods |
35 |
15. |
Infrastructure | 39 |
16. | Market Studies |
42 |
17. | Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups | 49 |
18. |
Capital and Operating Costs | 55 |
19. | Economic Analysis | 57 |
20. | Adjacent Properties |
61 |
21. |
Other Relevant Data and Information |
62 |
22. | Interpretation and Conclusions | 63 |
23. | Recommendations | 64 |
24. |
References |
65 |
25. |
Reliance on Information Provided by the Registrant |
66 |
1.
|
Executive Summary
|
Production Target
|
Average
Value
|
Units
|
|
ROM
|
9.7
|
Mt/y
|
|
Ilmenite
|
95,500
|
t/y
|
|
Rutile
|
16,700
|
t/y
|
|
Monazite
|
4,600
|
t/y
|
|
Zircon - Premium
|
22,400
|
t/y
|
|
Zircon - Concentrate
|
16,000
|
t/y
|
1.1
|
Exploration and Mineral Resource Estimate
|
THM Assemblage
|
||||||||||
Cut off
|
Tons
|
THM %
|
THM
|
Zircon
|
Rutile
|
Ilmenite
|
REE
|
Staurolite
|
||
(THM %)
|
(Mt)
|
(%)
|
(Mt)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
||
Indicated
|
0.4
|
241
|
2.2
|
5.3
|
11.3
|
9.3
|
39.7
|
2.1
|
15.6
|
|
Inferred
|
0.4
|
190
|
2.2
|
4.2
|
11.7
|
9.7
|
41.2
|
2.2
|
13.7
|
|
Total
|
0.4
|
431
|
2.2
|
9.5
|
11.5
|
9.5
|
40.3
|
2.1
|
14.8
|
1.2
|
Mining Methods
|
Year
|
ROM Tons
|
Inferred Tons
|
Indicated Tons
|
% Indicated Tons
|
(Mt)
|
(Mt)
|
(Mt)
|
(%)
|
|
1-14
|
136.5
|
0
|
136.5
|
100%
|
15-25
|
106.1
|
105.3
|
0.8
|
1%
|
LOM
|
242.6
|
105.3
|
137.3
|
57%
|
1.3
|
Mineral Processing and Metallurgical Testing
|
1.4
|
Processing and Recovery Methods
|
1.5
|
Capital Cost Estimate
|
Capital Cost Estimate Breakdown
|
US$ Million
|
|
Mine and Wet Concentration Plant
|
94.6
|
|
Mineral Separation Plant
|
22.3
|
|
Common Services
|
12.5
|
|
Project Indirects
|
35.2
|
|
Mobile Mining Units Turnkey
|
23.3
|
|
Contingency (30%)
|
49.4
|
|
Total Initial Capital
|
237.2
|
|
Deferred and sustaining capital
|
198.5
|
1.6
|
Operating Cost Estimate
|
1.7
|
Economic Analysis
|
Economic Measures Summary (After Tax)
|
Value
|
|
Annual EBITDA (first five years)
|
$118M
|
|
Project NPV (discounted at 8.0%)
|
$692M
|
|
Internal rate of return (IRR)
|
40%
|
|
Payback period (from start of operations)
|
1.9 y
|
1.8
|
Interpretation and Conclusions
|
• |
Low complexity mining practices can be employed utilizing local service providers.
|
• |
Mining footprint can be controlled to limit environmental and social impacts.
|
• |
Mining approach presented returns land mass to pre-mining conditions as minimum.
|
• |
Signed Memorandum of Understanding (MOU) for rare earth concentrate and titanium minerals (rutile and ilmenite) and zircon products.
|
• |
Shipping advantage, given that a large proportion of the rare earth concentrate and titanium (rutile and ilmenite) products are anticipated to be sold within the U.S.
|
• |
Exposure to high-demand, future-facing commodities experiencing increasing commodity prices.
|
• |
The net present value of the 25-year based project is $692M at an 8% discount rate and after tax.
|
• |
The internal rate of return (IRR) is 40%.
|
1.9
|
Recommendations
|
• |
Continued exploration and expansion of the Company’s land position;
|
• |
Advancing project permitting and development approvals;
|
• |
Commencement of a pre-feasibility study to optimize mine and process design;
|
• |
Performing feasibility study level flowsheet development test work (ongoing);
|
• |
Develop a Mineral Demonstration Facility on site (completed desliming, planning wet concentration and mineral separation stages.)
|
• |
Investigation of product upgrading and downstream processing;
|
• |
Undertaking a lifecycle analysis for the Company’s mineral and metal projects and operations;
|
• |
Continue implementation of sustainable operating and rehabilitation practices with UTIA;
|
• |
Continued stakeholder awareness and engagement; and
|
• |
Formalizing agreements with a number of prospective strategic, technical and offtake partners.
|
2.
|
Introduction
|
Scope of Work
|
Consultant / Basis of Estimate
|
|
Mine design, process design, capex & opex, financial analysis
|
Primero and its sub-consultants
|
|
Mineral Resource Estimate
|
Karst Geo Solutions
|
|
Metallurgical testwork and analysis
|
Mineral Technologies & SGS
|
|
Pricing – Titanium feedstock and zircon products
|
TZMI
|
|
Pricing – Rare earth concentrates
|
Adamas Intelligence
|
|
Permitting
|
HDR
|
|
Rehabilitation program
|
University of Tennessee
|
|
ESG assessment and integration
|
PGS Consults
|
2.1
|
Registrant and Terms of Reference
|
2.2
|
Information Sources
|
2.3
|
Personal Inspections
|
2.4
|
Previously Filed Technical Report Summary
|
2.5
|
Abbreviations, Acronyms and Units of Measure
|
Symbol
|
Description
|
||
B
|
Billion
|
||
CAPEX
|
Capital Expenditure
|
||
COG
|
Cut Off Grade
|
||
EBITDA
|
Earnings Before Interest, Taxes, Depreciation and Amortization
|
||
EBT
|
Earnings Before Taxes
|
||
FEED
|
Front End Engineering Detail
|
||
HMC
|
Heavy Mineral Concentrate
|
||
HMS
|
Heavy Mineral Sand
|
||
HTR
|
Electrostatic High Tension Roll Separator
|
||
IRR
|
Internal Rate of Return
|
||
M
|
Million
|
||
MMU
|
Mobile Mining Unit
|
||
MSP
|
Mineral Separation Plant
|
||
MRE
|
Mineral Resource Estimate
|
||
Mtpy
|
Million tons (metric) per year
|
||
NPAT
|
Net Profit After Tax
|
||
NPI
|
Non-Process Infrastructure
|
||
NPV
|
Net Present Value
|
||
OPEX
|
Operational Expenditure
|
||
PFDs
|
Process Flow Diagrams
|
||
PFS
|
Pre-feasibility Study
|
||
Primero
|
Primero Group
|
||
RED
|
Rare Earth Drum
|
||
REE
|
Rare Earth Element
|
||
RER
|
Rare Earth Rolls
|
||
RHF
|
Rougher Head Feed
|
||
ROM
|
Run of Mine
|
||
SL
|
Slimes
|
||
SS
|
Scoping Study
|
||
SMP
|
Structural Mechanical and Piping
|
||
$
|
United States Dollars
|
||
WCP
|
Wet Concentrator Plant
|
3.
|
Property Description
|
3.1
|
Location
|
3.2
|
Titles, Claims or Leases
|
3.3
|
Mineral Rights
|
3.4
|
Encumbrances
|
3.5
|
Other Risks
|
4.
|
Accessibility, Climate, Local Resources, Infrastructure and Physiography
|
4.1
|
Topography, Elevation and Vegetation
|
4.2
|
Access and Transport
|
4.3
|
Climate and Length of Operating Season
|
4.4
|
Infrastructure
|
4.5
|
Location
|
5.
|
History
|
5.1
|
Previous Heavy Mineral Sand Mining in the Region
|
5.2
|
Previous Exploration
|
6.
|
Geological Setting, Mineralization, and Deposit
|
6.1
|
Regional, Local and Property Geology
|
6.2
|
Deposit Model
|
7.
|
Exploration
|
7.1
|
Non-Drilling Procedures and Parameters
|
7.2
|
Drilling Procedures
|
7.3
|
Hydrology and Hydrogeology
|
7.4
|
Geotechnical Data
|
8.
|
Sample Preparation, Analyses, and Security
|
8.1
|
Sample Collection and Security
|
8.2
|
Laboratory Procedures
|
8.3
|
QA and QC Controls
|
8.4
|
Opinion of Qualified Person
|
9.
|
Data Verification
|
9.1
|
Procedures of Qualified Person
|
9.2
|
Limitations
|
9.3
|
Opinion of Qualified Person
|
10.
|
Mineral Processing and Metallurgical Testing
|
11.
|
Mineral Resource Estimate
|
11.1
|
Assumptions, Parameters and Methods
|
11.2
|
Mineral Resource Estimate
|
THM Assemblage
|
||||||||||
Cut off
|
Tons
|
THM %
|
THM
|
Zircon
|
Rutile
|
Ilmenite
|
REE
|
Staurolite
|
||
(THM %)
|
(Mt)
|
(%)
|
(Mt)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
||
Indicated
|
0.4
|
241
|
2.2
|
5.3
|
11.3
|
9.3
|
39.7
|
2.1
|
15.6
|
|
Inferred
|
0.4
|
190
|
2.2
|
4.2
|
11.7
|
9.7
|
41.2
|
2.2
|
13.7
|
|
Total
|
0.4
|
431
|
2.2
|
9.5
|
11.5
|
9.5
|
40.3
|
2.1
|
14.8
|
THM Assemblage
|
||||||||||
Cut off
|
Tons
|
THM %
|
THM
|
Zircon
|
Rutile
|
Ilmenite
|
REE
|
Staurolite
|
||
(THM %)
|
(Mt)
|
(%)
|
(Mt)
|
(%)
|
(%)
|
(%)
|
(%)
|
(%)
|
||
Indicated
|
2.0
|
105
|
3.8
|
3.9
|
11.7
|
9.8
|
42.0
|
2.3
|
10.7
|
|
Inferred
|
2.0
|
90
|
3.5
|
3.2
|
12.1
|
9.9
|
42.1
|
2.3
|
10.8
|
|
Total
|
2.0
|
195
|
3.7
|
7.1
|
12.1
|
9.9
|
42.0
|
2.3
|
10.7
|
11.3
|
Geology and Geological Interpretation
|
11.4
|
Drilling and Sampling Techniques
|
11.5
|
Sample Analysis Methodology
|
11.6
|
Resource Estimation Methodology
|
11.7
|
Classification Criteria
|
Source of Uncertainty
|
Discussion
|
||
Drilling
|
All drilling has been roto-sonic drilling. The roto-sonic drill rig provides a representative sample, with sufficient recoveries of unconsolidated sand, in order to represent the
in-ground material and is suitable for use in the MRE.
|
||
Sampling
|
Field duplicates are taken at a rate of 3% in order to identify in biases or inconsistencies. Examination of these duplicates indicates satisfactory performance of the sampling.
|
||
Geological Modelling
|
The geological model is supported with sufficient drill data. The Coon Creek formation is reached in >95% of the holes used the model. This provides a sufficient base to the
extractable mineralization. Discrimination between the upper and lower members of the McNairy Sand Formation is easily identified by the relative difference in grain size and the presence of micas within the lower member.
|
||
Estimation
|
The estimation techniques used are suitable for the deposit type and mineralization style. All data is log transformed and shows normally distributed grade data. A validation infill
program will be executed in a future study in order to gain additional confidence in the estimation.
|
11.8
|
Cut-off Grade
|
11.9
|
Mining and Metallurgical Methods and Parameters
|
11.10
|
Qualified Person’s Opinion
|
12.
|
Mineral Reserve Estimate
|
13.
|
Mining Methods
|
13.1
|
Geotechnical and Hydrogeology
|
13.1.1
|
Hydrology
|
1.
|
Restricted areas due to region surface water management have adequately been defined with the provision of surface water buffer zones.
|
2.
|
Ground water is not expected to present a pit wall stability issue and will be managed through the use of in-pit pumping associated with the sand tailing water reclaim
system.
|
3.
|
All surface water that interacts with the active mining areas will remain in the mine water management system and all surface water that does not interact with the active
mining area will be diverted to natural water ways that move the water from the mining areas.
|
4.
|
All mine water used for the transportation of the mineralized material to the Wet Concentrator Plant (WCP) and used in the transportation of sand tails returned to the pit
working area will be controlled within the mine water management system which will prevent mine water from leaving the boundary of the mining areas in an uncontrolled fashion.
|
5.
|
All mine water management system components (pumps, storage dams and pump lines) are adequately sized to manage expected peak performance requirements for high flow rates.
|
6.
|
Ancillary mine water for use in dust suppression and all WCP water supply will be drawn from the Mine Water Management System.
|
13.1.2
|
Geotechnical
|
13.2
|
Mine Design and Rehabilitation
|
13.3
|
Production Target and Mine Schedule
|
Year
|
ROM Tons
|
Inferred Tons
|
Indicated Tons
|
% Indicated Tons
|
(Mt)
|
(Mt)
|
(Mt)
|
(%)
|
|
1-14
|
136.5
|
-
|
136.5
|
100%
|
15-25
|
106.1
|
105.3
|
0.8
|
1%
|
LOM
|
242.6
|
105.3
|
137.3
|
57%
|
14.
|
Processing and Recovery Methods
|
1.
|
Run of mine mineralized resource is processed in the Mobile Mining Unit (MMU) which removes trash & oversize. The undersize is pumped to the Feed Preparation Plant (FPP)
and Wet Concentrator Plant (WCP).
|
2.
|
In the FPP, the feed is de-slimed to separate clay and the sand. The slimes are directed to the thickener where they are thickened and then filtered. The sand fed into a
constant density tank which is pumped to the rougher spiral stage at 1,000 tph at the start of the WCP.
|
3.
|
The WCP comprises of multiple stages of spiral separators which produce a tailings and a Heavy Mineral Concentrate (HMC) stream. The WCP tailings stream is dewatered and
pumped to the mining void while the HMC (at a target grade of >85% THM) is dewatered and trucked to the Monazite Separation Plant.
|
4.
|
The Monazite Separation Plant which consists of a flotation circuit and wet gravity circuits, to produce a monazite product and an upgraded HMC which consists predominantly
of the titanium minerals & zircon minerals. The upgraded HMC is the feedstock for Mineral Separation Plant (MSP).
|
5.
|
The MSP consists of a dryer, multiple stages of electrostatic separators, magnetic separators and wet gravity separators to produce ilmenite, rutile, premium zircon and
zircon concentrate.
|
14.1
|
Mobile Mining Units (MMU)
|
14.2
|
Feed Preparation Plant (FPP) and Wet Concentration Plant (WCP)
|
14.2.1
|
Feed Preparation Plant (FPP)
|
14.2.2
|
Wet Concentrator Plant (WCP)
|
14.3
|
Mineral Separation Plant (MSP)
|
14.3.1
|
Monazite Flotation Plant (MFP)
|
14.3.2
|
Mineral Separation Plant (MSP)
|
15.
|
Infrastructure
|
15.1
|
Site Layout
|
15.2
|
Potable Water
|
15.3
|
Wastewater Treatment
|
15.4
|
Fire Services
|
15.5
|
Natural Gas
|
15.6
|
Roads
|
15.7
|
Diesel
|
15.8
|
Compressed Air
|
15.9
|
Renewable Power
|
15.10
|
Communication
|
15.11
|
Buildings
|
16.
|
Market Studies
|
16.1
|
Market Fundamentals and Product Sales
|
16.1.1
|
Critical Minerals Overview
|
16.1.2
|
Rare Earth Concentrates
|
(%)
|
Typical Monazite Concentrate
|
IperionX REE Concentrate
|
|
TREO
|
53 – 55
|
58 – 59
|
|
Monazite / Xenotime
|
-
|
80 / 10
|
|
LREO (% TREO)
|
90.7
|
79.5
|
|
HREO (% TREO)
|
9.3
|
20.5
|
|
NdPr Oxides (%TREO)
|
22.0
|
21.2
|
|
DyTb Oxides (%TREO)
|
0.9
|
2.4
|
16.1.3
|
Titanium Products
|
16.1.4
|
Zircon Products
|
16.2
|
Price Forecasts
|
Product
|
Spot pricing12
|
2023 – 2027
(annual average, US$/t)
|
2028+
(annual average, US$/t)
|
|
Rare earth concentrate
|
$11,180 – $12,850
|
$14,325
|
$17,690
|
|
Rutile
|
$1,960 – $2,280
|
$1,475
|
$1,285
|
|
Chloride Ilmenite
|
$390 – $470
|
$305
|
$310
|
|
Zircon (premium)
|
$2,500 – $3,025
|
$2,240
|
$1,685
|
|
Zircon (concentrate)
|
$945 – $1,330
|
$1,010
|
$760
|
17.
|
Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups
|
17.1
|
Environmental Studies
|
17.1.1
|
Critical Issues Analysis
|
• |
Clean Water Act (Sections 404 and 401);
|
• |
National Pollutant Discharge Elimination System (NPDES) for Storm Water Discharges associated with Construction;
|
• |
Section 10 (Rivers and Harbors Act);
|
• |
Federal and State Threatened & Endangered Species;
|
• |
Section 106 Historic Preservation Act;
|
• |
Public Lands Permitting;
|
• |
State and Local Floodplain;
|
• |
State and Local Construction Dewatering;
|
• |
Local Soil Erosion and Sedimentation Control requirements;
|
• |
State Mining Permit; and,
|
• |
Other applicable state and local environmental requirements.
|
17.1.2
|
USACE Wetland Delineation and TDEC Hydrologic Determination Field Work
|
17.1.3
|
Federally and State Threatened and Endangered Habitat Survey
|
17.1.4
|
Cultural Resources Background Research
|
17.1.5
|
Groundwater Quality and Quantity Testing Program
|
17.2
|
ESG Assessment and Integration
|
17.2.1
|
ESG Materiality Assessment
|
17.2.2
|
ESG Factors Most Material to IperionX
|
• |
ESG Focus Area 1 – Business Conduct & Ethics and Regulatory Compliance.
|
• |
ESG Focus Area 2 – Health & Safety – Community & Employees.
|
• |
ESG Focus Area 3 – End-State Vision: Tailings Management & Closure Planning.
|
• |
ESG Focus Area 4 – Community & Labor Relations: Employment & Diversity/Equity/Inclusion.
|
• |
ESG Focus Area 5 – Environmental Management: GHG Emissions, Air quality, water, energy, waste, biodiversity.
|
17.2.3
|
Life Cycle Assessment
|
17.2.4
|
ESG Playbook
|
17.2.5
|
EHS Management System
|
17.2.6
|
ESG – Next Steps
|
17.3
|
Community Engagement
|
17.4
|
Partnership with University of Tennessee’s Institute of Agriculture (UTIA)
|
17.4.1
|
Native Warm Season Grasses
|
17.4.2
|
Biochar and Gypsum Soil Amendments
|
17.4.3
|
Carbon Sequestrating
|
17.5
|
Waste Disposal and Closure Planning
|
• |
Dry waste from the overburden waste and inter-burden waste.
|
• |
Plus 250mm reject trash at MMU feed hopper grizzly.
|
• |
Plus 2mm oversize material reject from the feed preparation trommel generated from the ROM feed.
|
• |
Wet waste from the return of the sand tailing from the WCP generated from the ROM feed.
|
• |
Dewatered slimes from the WCP generated from the ROM feed.
|
18.
|
Capital and Operating Costs
|
18.1
|
Capital Cost Estimate
|
• |
Direct costs for the mine pre-production, wet concentrate plant (WCP), mineral separation plant (MSP), common services including reagents and air/water services and non-process infrastructure.
|
• |
Indirect costs were estimated for engineering, construction, and owner’s costs.
|
Capital Cost Estimate Breakdown
|
US$ Million
|
|
Mine and Wet Concentration Plant
|
94.6
|
|
Mineral Separation Plant
|
22.3
|
|
Common Services
|
12.5
|
|
Project Indirects
|
35.2
|
|
Mobile Mining Units Turnkey
|
23.3
|
|
Contingency (30%)
|
49.4
|
|
Total Initial Capital
|
237.2
|
|
Deferred and sustaining capital
|
198.5
|
18.2
|
Operating Cost Estimate
|
Operating Cost Estimate Breakdown
|
Average Annual Cost
(US$ Million/y)
|
US$/t ROM
|
|
Mining
|
25.8
|
2.66
|
|
Processing
|
28.2
|
2.91
|
|
Transport
|
2.1
|
0.22
|
|
General & Admin
|
6.9
|
0.71
|
|
Royalties
|
4.0
|
0.41
|
|
Total Operating Costs
|
67.1
|
6.91
|
19.
|
Economic Analysis
|
19.1
|
Royalties, Taxes, Depreciation, and Depletion
|
• |
Royalties of 5% of revenue generated are based on the average land lease agreement.
|
• |
Federal tax rate of 21% and Tennessee state corporate tax rate of 6.5% are applied.
|
• |
Depletion allowance of 22% of heavy mineral sands is applied to sales price.
|
• |
Depletion allowances for rare earth concentrate are assumed as 14%.
|
• |
Depreciation in the mine and concentrate operations is based on Asset Class 10 – Mining in IRS Table B-1 using GDS of 7 years with the double declining balance method.
|
19.2
|
Scoping Study Economics
|
Financial Assumptions
|
UoM
|
Value
|
|
Ilmenite LOM weighted average realized price
|
$/t
|
311
|
|
Rutile LOM weighted average realized price
|
$/t
|
1,311
|
|
Monazite LOM weighted average realized price
|
$/t
|
17,356
|
|
Zircon premium LOM weighted average realized price
|
$/t
|
1,748
|
|
Zircon concentrate LOM weighted average realized price
|
$/t
|
787
|
|
Discount rate
|
%
|
8
|
|
Royalties (leased land only)
|
%
|
5
|
|
Federal tax rate
|
%
|
21
|
|
Tennessee state corporate tax rate
|
%
|
6.5
|
|
Ilmenite depletion
|
%
|
22
|
|
Rutile depletion
|
%
|
22
|
|
Monazite depletion
|
%
|
14
|
|
Zircon premium
|
%
|
22
|
|
Zircon concentrate
|
%
|
22
|
|
Depreciation
|
-
|
7 year double declining method
|
19.3
|
Sensitivity Analysis
|
20.
|
Adjacent Properties
|
21.
|
Other Relevant Data and Information
|
22.
|
Interpretation and Conclusions
|
• |
Low complexity mining practices can be employed utilizing local service providers.
|
•
|
Mining footprint can be controlled to limit environmental and social impacts.
|
•
|
Mining approach presented returns land mass to pre-mining conditions as minimum.
|
•
|
Signed Memorandum of Understanding (MOU) for rare earth concentrate and titanium minerals (rutile and ilmenite) and zircon products.
|
• |
Shipping advantage, given that a large proportion of the rare earth concentrate and titanium (rutile and ilmenite) products are anticipated to be sold within the U.S.
|
• |
Exposure to high-demand, future-facing commodities experiencing increasing commodity prices.
|
• |
The net present value of the 25-year based Project is $692M at an 8% discount rate and after tax.
|
• |
The internal rate of return (IRR) is 40%.
|
23.
|
Recommendations
|
• |
Continued exploration and expansion of the Company’s land position;
|
•
|
Advancing project permitting and development approvals;
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Commencement of a pre-feasibility study to optimize mine and process design;
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Performing feasibility study level flowsheet development test work (ongoing);
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Develop a Mineral Demonstration Facility on site (completed desliming, planning wet concentration and mineral separation stages.)
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Investigation of product upgrading and downstream processing;
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Undertaking a lifecycle analysis for the Company’s mineral and metal projects and operations;
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Continue implementation of sustainable operating and rehabilitation practices with UTIA;
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Continued stakeholder awareness and engagement; and
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Formalizing agreements with a number of prospective strategic, technical and offtake partners.
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24.
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References
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25.
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Reliance on Information Provided by the Registrant
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Section 16: Market Studies. Pricing information was based on data sourced from Adamas Intelligence, TZMI and IperionX.
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Section 17: Environmental Studies, Permitting, and Plans, Negotiations, or Agreements with Local Individuals or Groups. This is based on the information from HDR, PGS Consults, UTIA and IperionX.
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