Sunkar Resources shares rocket on feasibility study

published 28 February 2013

Shares in mining group Sunkar Resources leapt almost 180 per cent on Thursday after a feasibility study on its Chilisai Phosphate Project estimated an internal rate of return of 17.2 per cent before tax.

Discounted at 10%, the net prsent value of the project is estimated to be $715.2m, with estimated earnings before interest, tax, depreciation and amortisation (EBITDA) of $278m per annum in 2017 and $533m by 2025.

The study predicted that the total construction cost for both phases of the project will be $1.94bn.

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The nominal cash cost of di-ammonium phosphate (DAP) production is estimated at $195 per metric tonne at 2017 and $232 in 2025, while for mono-ammonium phosphate the cost is expected to be $171 in 2017 and $219 by 2025.

Serik Utegen, Chief Executive of Sunkar, said: "The study outlines robust economics for this major project with attractive IRRs [internal rates of return], drawing on Chilisai's natural advantages of low cost mining, proximity to sulphur and well established regional infrastructure, as well as attainable markets both locally in Kazakhstan and internationally to Western China and through Black Sea ports.

"The study has identified no major technical hurdles with the Chilisai Project and we currently anticipate announcing the award of the basic engineering contract in the second half of this year, leading to stage I production by the last quarter of 2016."

The share price had rocketed 178.79% to 11.50p by 15:05 Thursday.