Highlights

  • The updated study estimates post-tax NPV8 of A$883 million.
  • Pre-production capital is assessed at A$383.6 million, including contingency.
  • The study assumes approximately 26 years of operations and a substantial garnet revenue contribution.
  • Mining approvals, metallurgical work and development financing remain outstanding.

Ark Mines Limited (ASX:AHK) is developing the Sandy Mitchell rare earths and heavy minerals project in Far North Queensland. An updated scoping study released on 29 October 2026 sets out preliminary project economics, including an A$883 million post-tax net present value, while confirming that financing, approvals and further technical studies remain necessary.

What the Updated Study Estimates

Ark Mines (ASX:AHK) reported a post-tax net present value at an 8 per cent discount rate, or NPV8, of A$883 million after assumed equipment finance. The same study estimates a 29.7 per cent internal rate of return and payback of pre-production capital 3.5 years after first production. Pre-tax NPV8 is assessed at A$1,346 million after royalties and freight, and A$1,877 million before those charges.

Production Assumptions and Resource Basis

The study uses a life of approximately 26 years and assumed processing of 13.0 million tonnes a year. Total mill feed is estimated at 313.8 million tonnes averaging 5,204 ppm mineral equivalent. Ark Mines (ASX:AHK) cites a refined Mineral Resource of 373.3 million tonnes at 5,420 ppm mineral equivalent, with approximately 97 per cent in Measured and Indicated categories. The production target also includes an Inferred component.

Capital and Revenue Composition

Estimated pre-production capital is A$383.6 million, including a 25 per cent contingency. Life-of-mine gross revenue is modelled at A$8.39 billion and operating surplus at A$4.56 billion, both undiscounted and in real terms. Site operating cost is estimated at A$8.31 per tonne of ore. Ark Mines (ASX:AHK) said garnet represents approximately 52 per cent of modelled revenue and monazite around 22 per cent.

Pricing Sensitivity and Unsecured Funding

The study assumes an exchange rate of A$1.00 to US$0.65, a monazite price of A$11,050 per tonne and a blended garnet price of A$927 per tonne. The company identified exchange rates as a significant sensitivity: a 15 per cent appreciation in the Australian dollar reduced its estimated post-tax NPV8 to approximately A$567 million. No development funding has been committed. The model includes A$196.1 million of assumed equipment finance, which Ark Mines (ASX:AHK) has not arranged. Other potential capital sources are likewise proposals, not agreements.

Approvals and Technical Work Ahead

Commercial operations require a new mining lease for the proposed footprint and additional environmental and water approvals. The company estimated an indicative approval period of approximately 40 months. Metallurgical work covering garnet separation, titanium recovery and product qualifications is ongoing, and no offtake agreements had been disclosed. Ark Mines (ASX:AHK) plans to commence a pre-feasibility study and work toward an Ore Reserve estimate. Approximately 37,000 tonnes of bulk material from four test pits were proposed for sampling from the fourth quarter of 2026. Construction was indicatively assessed at 10 to 12 months after approvals and funding.

Why the Study Remains Preliminary

A scoping study tests assumptions about development and economics, but it does not establish an Ore Reserve or demonstrate that the project will be built. The October announcement explicitly identifies unresolved processing, permitting and financing matters that prevent treating these estimates as realised outcomes.

Key Insights

Ark Mines (ASX:AHK) has disclosed a preliminary economic case for Sandy Mitchell, including assumed capital costs, output and product revenue. The study does not represent an approved, financed or producing operation. Further engineering, permitting and commercial validation remain essential distinctions.