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American Pacific Borates revising DFS to increase SOP production

Notably, the DFS revision will not affect detailed engineering and timelines for Phase 1A of the project.

American Pacific Borates Ltd - American Pacific Borates revising DFS to increase SOP production
A DFS revision will also not change the JORC resources or reserve or the life-of-mine

American Pacific Borates Ltd (ASX:ABR) has commenced a revision of the definitive feasibility study (DFS) published for its Fort Cady Borate Project in southern California.

The purpose of the revision is to potentially increase sulfate of potash (SOP) production and EBITDA.

The revision work will focus on phases 1B, 2 and 3 to ensure that detailed engineering work completed to date and current project timelines will not be affected.

SOP could be a high-margin by-product for Fort Cady

The board expects capital expenditure estimates for Phases 1B, 2 and 3 will increase and that operational expenditure estimates will decrease with fixed costs spread over larger production.

The board also expects these increases to be offset by additional EBITDA commensurate with high-margin by-product production of SOP.

Benefits of producing SOP at Fort Cady

While the revised DFS will be required to understand whether producing SOP as a by-product can add long-term project value, the company notes some strong supporting factors.

The US is a net importer of SOP and the only domestic producer is considered high-cost.

Fort Cady could potentially be a viable alternative to available market sources as the US west coast is a major consumer of SOP.

The outlook for SOP in the US is also solid with growth rates for demand being stronger than US GDP.

Quick facts: American Pacific Borates Ltd

Price: 0.445 AUD

ASX:ABR
Market: ASX
Market Cap: $98.92 m
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