Sierra Rutile announces significant reduction in Sembehun capex estimate

Sierra Rutile Holdings Limited (ASX: $SRX) has announced a substantial US$36 million reduction in the capex estimate for the Sembehun project. The capex estimate for the Definitive Feasibility Study (DFS) now stands at US$301 million, marking a significant decrease from the 2022 Preliminary Feasibility Study (PFS) figure of US$337 million. The reduction is attributed to a changed approach post demerger, with a dedicated management team implementing efficiencies and seeking in-country contractors for various project aspects.

Sierra Rutile Managing Director and CEO, Theuns de Bruyn, on Sembehun capex reduction

We are delighted to report a significant reduction in the estimated capex requirement to bring the Sembehun project into production. This reduction was driven by Sierra Rutile's dedicated management team and in house expertise implementing a range of efficiencies to the project, with a cost-effective, 'fit-for-purpose' approach suited to our dedicated ownership and approach to Sembehun. Sembehun represents one of the largest and highest-quality known rutile deposits in the world, offering a long mine life and additional exploration potential adjacent to Area 1. We look forward to delivering the full DFS in April 2024.

Sembehun capex estimate reduction and outlook

Sierra Rutile has successfully reduced the capex estimate for the Sembehun project by US$36 million, positioning the DFS capex at US$301 million. The reduction is attributed to a changed approach post demerger, with a dedicated management team implementing efficiencies and seeking in-country contractors for various project aspects. The company also aims to further reduce capex through third-party participation in public infrastructure and other scope modifications. The Sembehun project is expected to significantly extend the company's mine life, lower cost structure, and leverage existing infrastructure. Sierra Rutile's full DFS is anticipated to provide further details in mid-April 2024, and the company is actively engaged in discussions with the Government of Sierra Leone and international development organizations for potential funding. Any decisions concerning Sembehun will be dependent on reaching sustainable arrangements with the GoSL.