Legend International Holdings Announces Paradise Phosphate Project Update
Legend International Holdings, Inc (OTCBB:LGDI) is pleased to announce
this update on its Paradise Phosphate Project currently being developed
near Mt. Isa, Queensland, Australia.
The Company is currently dealing with multi-national corporations that
are conducting extensive due diligence for a potential strategic
transaction relating to the development and financing of the phosphate
assets. During discussions a number of potential partners have expressed
interest in pursuing a dual track development strategy involving the
production and sale of the high analysis fertiliser di-ammonium
phosphate and mono-ammonium phosphate (DAP/MAP), in conjunction with
producing high quality phosphate rock concentrate. Given current high
prices being received for phosphate rock (approx. US$200/t cfr India)
and the potentially smaller development lead time involved in producing
phosphate rock, both rock and value added products is a viable
development route.
Negotiations, although taking longer than expected, are continuing and
the Company is still confident that a deal will be completed as interest
in the project remains strong.
Paradise Project declared a Project of Regional Significance
Queensland Premier Anna Bligh has announced that Legend′s Paradise South
mining project had been deemed a Project of Regional Significance. For
the full newspaper article published in Queensland′s North West Star
please see Legend′s website:
http://www.lgdi.net/resources/i/north_west_star_220911.pdf
'The project is one of significance because it would contribute to the
local, regional, state and national economies,? Ms Bligh said.
'Projects that are of regional or state significance under the Gulf
Water Resource Plan are eligible to acquire water from a strategic
reserve ? which means no water will be taken from existing allocations.?
This declaration by the Premier is an important milestone for the
project particularly with relation to securing water supply. The
declaration means that water for the project will come from unallocated
reserves of water and will have no effect on existing water users. The
water will be used to process the ore and create the slurry which will
transport the phosphate rock through a 142km pipeline to the proposed
fertiliser complex south of Mount Isa. The Paradise South mining project
is Legend′s flagship deposit and the status of a Project of Regional
Significance indicates its importance to the State of Queensland,
Australia.
Updated Feasibility Study Financials
CRU Strategies (CRU), a division of CRU International Limited, is an
independent commodity analyst which provides Legend with forecasts for
DAP, MAP, sulphur, ammonia, phosphoric acid and phosphate rock. Legend
has used these forecasts in its Definitive Feasibility Study (DFS) and
Ore Reserve estimates. CRU Strategies has recently updated their long
term forecast out to 2020 for DAP and MAP fertiliser. CRU′s outlook for
DAP and MAP prices over the next ten years has become significantly more
bullish given the lack of production capacity growth, strength of food
prices and a growing global population with higher income earning
capacity.
Legend has updated its financial model used in the DFS with these
updated CRU forecasts. Other operating and capital cost estimates have
also been updated and the summary of the new financial results are
provided in the table below.
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| SUMMARY OF THE PARADISE FEASIBILITY STUDY RESULTS | ||||
Scenario | ? | Base Case | ? | Expanded Case |
Proven & Probable Ore Reserve ? Paradise South | 55Mt @ 33%P2O5 | |||
Annual Production (DAP/MAP/AlF3) | 400Kt MAP, 200Kt DAP, 15Kt AlF3 | 400Kt MAP, 800Kt DAP, 30Kt AlF3 | ||
Mine Life | 60yrs | 30yrs | ||
Total Nominal MAP Production ? 30 yrs | 12Mt | 12Mt | ||
Total Nominal DAP Production ? 30 yrs | 6Mt | 24Mt | ||
Total DAP/MAP/AlF3Revenue Generated (30 yrs)1 | US$13,327M | US$25,937 M | ||
Total Free Cash Flow (after tax and capital, 30 yrs) 1 | US$3,666M | US$8,954 M | ||
Average Annual EBITDA1 | US$201M | US$485M | ||
Average Annual Free Cash after tax1 | US$143M | US$335M | ||
Development Capital (Inc Working Capital) | US$830M | US$1,776M | ||
Capital Payback1 | 5.8 yrs | 5.3 yrs | ||
Life of Mine Average MAP Price (fob Townsville)1 | US$650/t | |||
Life of Mine Average DAP Price (fob Townsville)1 | US$653/t | |||
MAP Average Cash Operating Margin2 | US$322/t | US$392/t | ||
DAP Average Cash Operating Margin2 | US$325/t | US$395/t | ||
Pre Tax IRR 3 | 31.0% | 31.8% | ||
Pre Tax NPV 3 8.0% | US$2,425M | US$5,865M | ||
After Tax IRR 3 | 25.4% | 26.1% | ||
After Tax NPV 3 8.0% | ? | US$1,592M | ? | US$3,877M |
Notes: | ? | 1: Excludes inflation and discount rate |
2: Excludes inflation and discount rate. Includes AlF3 credit. | ||
3: Includes commodity inflation (3.5% p.a), discount rate (8% p.a), and commodities′ growth factor as per CRU forecasts, extrapolated to year 2024, with no growth in prices assumed past 2024 except for inflation. | ||
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Forward-Looking Statements
Forward-looking statements in this press release are made pursuant to
the 'safe harbour? provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking
statements involve risks and uncertainties including, without
limitation, the risks of exploration and development stage projects,
risks associated with environmental and other regulatory matters, mining
risks and competition and the volatility of mineral prices. Actual
results and timetables could vary significantly. Additional information
about these and other factors that could affect the Company′s business
is set forth in the Company′s fiscal 2010 Annual Report on Form 10-K and
other filings with the Securities and Exchange Commission.
Legend International Holdings, Inc.
Joseph Gutnick, +011 613
8532 2866
Chief Executive Officer
Fax: +011 613 8532 2805
josephg@axisc.com.au
or
General
Manager Business
New York Office
Tel: 212-223-0018
Fax:
212-223-1169
legendinfo@axisc.com.au