UPDATE: Avalon Recovers Most of Wednesday's Losses As Announces Results of Feasibility Study
Avalon Rare Metals Inc. (AVL.TO, AVL), which slumped 7% to year lows Wednesday, has recovered more than 5% today as it announced the completion of a positive Feasibility Study for its Nechalacho Rare Earth Elements Project. The FS is the first feasibility level study to be completed on a major heavy rare earth project outside of China. It said: "The FS results confirm that the Project is technically feasible and economically robust."
Feasibility Study Highlights include: The discounted cash flow analysis yields a 22.5% internal rate of return on a pre-tax basis and a 19.6% IRR on an after-tax basis, assuming 100% equity financing. The Project's net present value at a 10% discount rate is $1.351 billion pre-tax and $900 million after-tax.
Total Project construction capital costs are $1.575 billion, which is inclusive of a 13% contingency and $122 million in sustaining capital. Of the total capital costs, approximately $1.152 billion is expected to be incurred in the Northwest Territories and $423 million is expected to be incurred in Louisiana. Operating costs average $264.5 million per year.
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