Transcription of The Stock Network Interview with Critica (ASX:CRI), Chairman Tim Lindley
Lel Smits: Since we last had Critica on the Stock Network, the company has delivered a scoping study for its wholly-owned Mount Lindsay Tin-Tungsten project in Tasmania, outlining a modelled after-tax net present value of about $1 billion. It has also defined a first indicated resource at its Jupiter Rare Earths project in Western Australia. Ahead of appearing at the Rockstars Mining Investor event, I’m joined by Critica’s Chair, Tim Lindley, to discuss how Mount Lindsay could be funded and also what’s next for Jupiter.
Tim, welcome to The Stock Network.
Tim Lindley: Thanks for having me, Lel.
Lel Smits: Now, the Mount Lindsay scoping study outlines a capital-efficient underground mine with tungsten, about three quarters of modelled revenue. Tim, can you outline how Critica is approaching funding and also where you think partners could fit here?
Tim Lindley: Yes, well, we’re very lucky in that the company has actually owned the asset, 100% owned for over 20 years and done over 80,000m of diamond drilling, had an historical BFS with a current mining licence. And so the scoping study that had just been released really has been going back and updating to make a completely underground solution with a real focus on ESG and environmental impacts. The financial results that have been released to the ASX speak for themselves.
We have an after-tax NPV over a billion dollars, an IRR of 55.6%, but most importantly, it’s the affordable pre-production capex of $244.5 million. Now, given the fact that China over the last year has implemented full tungsten export controls and bans to some companies and countries, it’s meant that there’s been a significant move in the Western world in its ability to source tungsten. We’ve seen prices increase nearly eightfold and the Chinese have only granted 15 export licences.
And so the West is really looking to find where is available sources of tungsten, not in 2040 or 2050, but near-term production. And so with that provides us a tremendous amount of flexibility in terms of financing options for Mount Lindsay. We can look at building on already dialogue that’s happening with offtakers, with strategic investors, cornerstones to different solutions for financing.
Given the quality of the counterparty, there’ll also be opportunities to look at debt financing. And there’s a range of government grants, both in Australia, but around the world, with numerous countries wanting to lock in new sources of tungsten and tin. The other thing is this scrapping study, we went back to really show the economics of a new underground solution, but it doesn’t include all the potential economics from Mount Lindsay.
We’ve reported previously that the deposit also contains 13,000 tonnes of copper. Plus, we will be examining when we go back to DFS, the opportunities around the deposit in regards to floor spar, boron, amongst others. So, it’s a deposit with a number of different revenue streams, but most importantly, we intend to go rapidly back to DFS.
So, we’re looking as a company, even though we have two very strategic assets with Mount Lindsay and Jupiter, Mount Lindsay will be first to production, first to cash flow. And importantly, for offshore demand, we will be one of the closer projects in order to be able to get into production.
Lel Smits: Excellent. And in terms of finishing the Jupiter rare earth scoping study, Jupiter now holds its first indicated resource and has produced rare earth oxide samples for potential uptake partners. What’s the upcoming Jupiter scoping study designed to test? And also, Tim, what milestones do you think may follow it?
Tim Lindley: Well, look, earlier we’ve already released Maiden Jork resource to show that Jupiter is Australia’s largest clay-hosted rare earth deposit. But what we’ve tried to do is to go back and provide a lot more clarity for the market, given that there is a lot of misunderstanding about rare earths.
And importantly, questions need to be asked around can you actually make a product that’s going to have the maximum distribution, such as a carbonate and an oxide, which we have. And you’ve seen in our recent ASX releases that we’ve been able to produce a mixed rare earth oxide at 98.2% and a mixed rare earth carbonate at 57.9%. A lot of other companies aren’t able to actually produce the carbonate. The recent resource upgrade that we’ve just done shows 160 million tonnes of indicated resource.
And so we’re not relying on a lot of inferred, even at the scoping study level. And importantly, Jupiter is a huge deposit, and this indicated resource is only 10% of Jupiter. But it’s important to note that we also have 100% ownership of the broader Brothers District.
And so the current Jupiter only represents 3% of the broader Brothers District. And so what we’re looking to do is to basically help de-risk the project with this updated resource information. And then the scoping study is going to provide the economics to show the viability in order to extract the resource and sell it globally.
Lel Smits: Tim, thank you for the update from Critica. Look forward to hearing more when Critica is on stage at the Rockstars Mining Investment event.
Tim Lindley: Thank you.
Lel Smits: Thank you.
Ends