Centrex Metals (ASX:CXM) Ardmore Phosphate Rock Project


by Rachael Jones

Centrex Metals Limited (ASX:CXM) CEO Ben Hammond talks about the company's Ardmore Phosphate Rock Project in QLD and plans to supply the local superphosphate market.

Rachael Jones: Hello I’m Rachael Jones for the Finance News Network. Joining me today from Centrex Metals Limited (ASX:CXM) is CEO, Ben Hammond. Ben, welcome to FNN.

Ben Hammond: Thanks Rachael.

Rachael Jones: First up, could you start by giving us an introduction to your company?

Ben Hammond: Centrex Metals is an ASX listed company. It’s a mixed agribusiness and mining play. Our focus is development of the Ardmore phosphate project in northwest Queensland, one of the few remaining high-grade phosphate deposits in the world. Phosphate’s one of the key three main nutrients required for farming. As the world population grows, so does our demand for phosphate. We’ve got a market capitalisation of $40 million and we’ve got a healthy bank balance of $16 million, to see us through the current feasibility study on the project.

Rachael Jones: Now to your Ardmore phosphate project in more detail. What can you tell me about the size of the resource?

Ben Hammond: At the moment, we’ve got a 14.2 million tonne resource and it’s close to 30 per cent, and that’s one of its key features. Unlike most deposits that are much lower grade and require more complicated process plants, Ardmore is a very simple project. It just needs crushing and de-slime to produce what is a premium 35 per cent P2O5 product, and particularly interestingly, with ultra low cadmium.

Rachael Jones: What stage is the project at?

Ben Hammond: We’ve just finished both pilot plant trials and some mining trials. On the mining trials, the deposits very close to surface, we’ve shown we can dig it without the need for drill and blast. On the processing, we’ve shown again to confirm our scoping studies results, proving that we can make that premium-grade concentrate with ultra low cadmium. Cadmium is becoming a big issue in the phosphate market, it’s a toxic metal that can be taken up into the plants.

Rachael Jones: What about the economics?

Ben Hammond: The economics are looking very strong, we completed our scoping study earlier this year. We’ve got an NPV of $124 million to $129 million and we’ve got a 40 per cent IRR. For the 10-year project, we can produce an average EBITDA of $36 million.

Rachael Jones: Where will the phosphate go?

Ben Hammond: Our main target market is Australia and New Zealand. Between them they import a million tonnes of phosphate rock, most of it coming from faraway places like North Africa, the Middle East and South America. Our secondary market targets are Indonesia and India. Between them, that’s a 10-million tonne target market, for our just under a 800,000 tonnes of production. And we have a significant advantage over the current exporters.

Rachael Jones: What can you tell me about your other projects?

Ben Hammond: Aside from Ardmore, we’re still progressing the Oxley potassium nitrate project in Western Australia. It’s a much larger scale project than Ardmore, so Ardmore is our focus to get into cash generation. We’ve also got our Goulburn zinc project in New South Wales, just 10 kilometres north of Heron Resources (ASX:HRR) Woodlawn mine, three known sulphide prospects and some drill-ready targets.

Rachael Jones: What is Centrex Metals’ strategy and how is that progressing?

Ben Hammond: Very much focused on getting Ardmore into production, we hope to have our first shipments out early next year. Once we can get that into production, we’re going to have a stable cash flow for more than 10 years. There’s upside to Ardmore, we have extra expiration leases there. And then we can either continue to develop our other projects, or seek other acquisitions.

Rachael Jones: Last question Ben. Why should investors consider Centrex Metals for their portfolio?

Ben Hammond: Well again, we are that mix between agribusiness and mining. We’ve got a healthy bank balance, we’re not living hand to mouth and the Ardmore project is one of the simplest mining projects out there. Nothing complicated about mining, nothing complicated about processing and all the infrastructure is there. Meaning it’s a very low cost project to develop.

Rachael Jones: Ben Hammond, thanks for the update.

Ben Hammond: Thanks Rachael.


Rachael Jones

Finance News Network
Rachael comes to FNN after working for Fairfax Media covering international breaking news, including the global economy and politics. She joined FNN in February 2018. She has reported on Australia’s finance news for various organisations since 2000 and has also interviewed a number of key business players, including Bill Gates. Rachael has also worked across a number of countries, including the UK and the US.