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Gladstone project study shows US$625M profit after tax
The final financial results of the Feasibility Study for Stage 1 of Gladstone....
The final financial results of the Feasibility Study for Stage 1 of Gladstone Pacific Nickel Ltd’s Gladstone Nickel Project in Queensland have been announced.The study demonstrated, in the first year of full production assuming a two year ramp up that the project is expected to generate gross revenues of US$2,417 million and Earnings Before Interest, Tax, Depreciation and Amortisation of US$1,373 million at real January 1, 2008 terms using current prices and exchange rates. Profit after tax and interest from the project, in the first year of full production, is projected to be US$625 million in real terms at a gearing ratio of 70% debt for a 10 year loan period with an interest rate of 8.5% per annum.“The study analysis confirmed the project net present value at US$4,322 million using an 8% discount rate and current prices and exchange rates. The directors believe this is one of the most advanced projects in the nickel pipeline. It is situated in a low sovereign risk environment, and it has strong economics as well as potential for significant expansion,” the company’s managing director and CEO Mr Downie said.The cash unit operating cost has been revised from US$2.19 to US$2.71 per pound of nickel, net of by-product credits, due to overseas ore being indexed to the nickel price and due to a change in exchange rates. The capital cost has also been revised from US$3,400 million to $3,656 million as a result of a change in the exchange rates.The company plans to build one of the world’s largest nickel and cobalt production facilities at its site in Queensland, treating 100% owned ore inventory from Australia together with ore from its Joint Venture in the South West Pacific. Stage 1 of the Gladstone Nickel Project comprises a two autoclave plant including atmospheric leach at