The study outlined a project revenue of $A30.2 million with a capital cost of $3.9 million, $1.5 million of which is already spent.
 
Earnings before interest, tax, depreciation and amortisation were forecast at $16 million, with a project net present value of $14.4 million and an initial rate of return of 162%.
 
First production is forecast for the third quarter of CY2014, subject to funding, with an initial mine life of 19 months producing around 365,000 pounds of tantalum pentoxide.
 
Pilbara Minerals chief geologist John Young said the study demonstrated the open cut’s viability and development of the mine would ramp up over the coming months.
 
“Based on the results of the study, Pilbara Minerals and its joint venture partner Nagrom intend to fast-track the development of the Tabba Tabba project, subject to the completion of project financing.
 
“Tabba Tabba will deliver a steady source of cash flow for at least the next two to three years, with potential for future growth from a number of sources, including the development of the nearby Strelley project,” he said.
 
Pilbara entered a 50/50 joint venture with Nagrom in October last year to evaluate, develop, and mine Tabba Tabba.
 
The project was acquired from Global Advanced Metals Wodgina, and will be developed under a five-year mining and offtake agreement.
 
The study proposes mining and processing 118,000 tonnes of ore per annum from a single pit, with an average operating cost of $34.74/lb.
 
Production of 256,000lbs has been slated for the first full year of operation, and the company said all government approvals were well advanced.
 
The company has announced a maiden JORC ore reserve of 133,000t at 1290 parts per million tantalum pentoxide for the project, with all orebodies open along strike and at depth.
 
Pilbara Minerals shares were up 42.9% to 2c today.