Centrex has whittled the cost of its Stage 1.5 expansion project at Ardmore down to $17.6 million – $8.1 million less than the previous estimate.

The Stage 1.5 expansion will take Ardmore to a production capacity of 625,000tpa of beneficiated phosphate concentrate.

“The Stage 1.5 expansion remains a highly capital-efficient and attractive development pathway for Ardmore,” chief executive officer and managing director Robert Mencel said.

“The reduction in capital expenditure compared to last year’s guidance is truly significant when considering the broader inflationary forces at play across the entire mining sector.

“The Stage 1.5 project has attracted a substantial amount of interest from financiers, and financing discussions are progressing well.”

The Stage 1.5 project has been designed as an interim step towards Stage 2 at Ardmore – which would take annual concentrate production to 800,000 tpa.

The 2021 Definitive Feasibility Study put the estimated pre-production capital expenditure at $72.6 million to bring this capacity online.

The Stage 1.5 development scope involves upgrading existing non-processing infrastructure.

Centrex has completed engineering assessments and designs for mining, ore crushing, concentrate drying, and process plant improvements, as well as finishing procurement workstreams and execution schedules.

Centrex said today the reduction in spending on Stage 1.5 capital items was mainly attributable to ongoing project optimisation, leading to a refined capital expenditure profile.

The initial capital expenditure is $8.8 million, with a further $8.8 million scheduled in Q3-24 onwards, allowing the option for Ardmore to fund some of the back-end capital expenditure from existing free cash flow.

Furthermore, Centrex has been able to utilise its Stage 1 operating cash flows, previously raised equity capital and hire purchase financing of the new crushing circuit to partially fund the capital expenditure of Stage 1.5 project incurred to date.