i-minerals (TSX-V: IMA)(PINK SHEETS: IMAHF) rallied more than 5% on Wednesday after reporting positive results from a preliminary economic assessment study for the second of two deposits on the Helmer-Bovill property in Latah County, Idaho.
The results indicate the primary clay deposit, which is estimated to have inferred mineral resources of 38.4 million short tons, has a net present value (6%) of US$96.0 million, with a projected IRR of a whopping 48%. Total capital costs for the life of the mine were estimated at $22.5 million, with a two-year payback period.
The clay at the deposit is comprised of an aggregate - halloysite, kaolin, and metakaolin - with a weighted average product price of US$378 per ton, the company said.
Potentially economic concentrations of quartz and K-spar are also contained in the primary clays, i-minerals added, but are not incorporated into the resource estimate, which was calculated using a cut-off-grade of 20% clay.
The company released a preliminary feasibility study for the first deposit on Helmer-Bovill, otherwise known as Kelly's Basin, in early November, which estimated its net present value at US$61 million.
According to i-minerals, the primary clay resources, together with Kelly's Basin, represent the largest deposits of feldspar, quartz, kaolin and halloysite in the Western United States.
"The results of the Primary Clay PEA together with our previously released Preliminary Feasibility Study on the Kelly's Basin Deposit provide the first independent valuation of our mineral assets," said president and CEO Roger Kauffman.
"While there remains additional drilling and metallurgical work to do to advance i-minerals' Primary Clay, we believe there is significant opportunity to optimize the product mix and therefore improve the cash flows through recovering the minerals in the feldspathic sands that are not considered in this Preliminary Economic Analysis."
The PEA, completed by SRK Consulting, concluded that resources at the primary clay deposit can support a mine life in excess of 50 years, but initial assesments were based on a 25+ year year limited market life.
Process throughput rate was anticipated at 900 tons of ore per day (nominal), with a 23.6% overall process recovery rate. Expected cash flow was $218.7 million.
i-minerals was up more than 5% on Wednesday, trading at $0.4 moments to market close.