[Ferro-Alloys.com] Ferro-Alloy Resources secures key financing offer and cuts project costs; shares surge 13%

Ferro-Alloy Resources Ltd shares jumped 13% to 6.21p after the company unveiled major cost savings and a financing breakthrough for its flagship Balasausqandiq vanadium project in southern Kazakhstan. The AIM-listed miner said it has agreed terms for front-end engineering and design (FEED) work with China National Chemical Engineering Sixth Construction (CC6), one of the world’s leading industrial contractors.

CC6 has provided an indicative construction cost of $261 million, cutting the total funding needed to bring the project into production to $311.9 million, around 40% lower than previously estimated in the project’s feasibility study. The revised figures significantly boost Balasausqandiq’s economics, lifting the project’s post-tax internal rate of return to 31% and net present value to $931.6 million.

In a further boost, CC6 has secured a conditional, non-binding loan offer worth $221.8 million from the Bank of Communications (Hubei) Branch, equivalent to 85% of its construction scope. Discussions are also under way with Sinosure, China’s export credit agency, which could provide loan guarantees to lower borrowing costs.

Chief executive Nick Bridgen said the partnership with CC6 “demonstrates the potential to significantly enhance the project’s financial returns” and strengthens Ferro-Alloy’s path to production.

The company is now engaging with potential strategic investors for the equity component of the project’s financing. CC6’s FEED work, expected to take six months, will be followed by a final engineering, procurement and construction (EPC) contract once costs are confirmed.

• [Editor:tianyawei]