Canadian mining company Allied Critical Metals has announced the results of an initial preliminary economic assessment (PEA) for its 100%-owned Borralha tungsten project, in northern Portugal.

Key highlights include an after-tax net present value (NPV) of C$473-million, or $346.6-million, an internal rate of return (IRR) of 48.8% at $1 000/t tungsten trioxide (WO₃) and an initial capital requirement of about C$124.2-million, or $91-million, with a 4.2-year payback.

The company also notes a strong base case with an after-tax IRR of 27.2% and an NPV of C$182.7-million, or $134-million, at about $704/t WO₃.

Additionally, the company notes significant upside leverage, with an after-tax IRR of 78.4% and NPV of C$963.8-millionn, or $706.4-million, at $1 500/t WO₃.

The PEA does not include the company's other tungsten project at Vila Verde.

Allied CEO and director Roy Bonnell comments that the completion of the PEA marks another important milestone for the company.

He explains that, in addition to the significant tailwinds provided by the significant increase in the price of tungsten, which has surged to more than $1 900/t, the company is pleased to have been able to receive support from idD Portugal Defence, the Portuguese public entity overseeing the nation's defence industry, which has endorsed the Borralha project as a strategic initiative of national importance.

Bonnell says the company has also received a favourable Environmental Impact Declaration, subject to standard regulatory conditions.

"We could not be more pleased with the considerable advancement of the Borralha project and look forward to continuing to make more progress at the Borralha and the Vila Verde projects, which are both strategic critical mineral tungsten assets well positioned within the EU."

The PEA outlines a technically robust and capital-efficient underground tungsten development project within the EU, delivering strong economics across a range of pricing assumptions.

Importantly, Allied says the study reflects only the Santa Helena Breccia deposit and an initial 11-year mine plan.

The company says it is committed to the long-term expansion of the current resource estimate and, as such, has recently begun a fully funded 20 000 m drill programme designed to expand the current resource and enhance long-term project scale.

Mine design and cutoff grade selection were developed using a conservative $659/t WO₃ assumption.

The company notes that recent reported tungsten market prices have reached about $1 998/t, demonstrating meaningful leverage to current market conditions.

Allied says the initial mine plan shows a strong base with expansion potential.

This includes a mine life of 11 years, with average production of 1 708 t/y WO₃ and peak production of 2 388 t/y WO₃.

The company notes a processing rate of 1.4-million tonnes a year, an average mill feed grade of 0.20% WO₃ and an all-in-sustaining cost estimate of about $303/t WO₃, or about C$413.84/t WO₃.

The company says it views this initial PEA as a foundational step in what is expected to be a multi-stage growth strategy at the Borralha project.

“With future exploration work and the 20 000 m of drilling currently under way, we are focused on expanding resources, extending mine life and enhancing overall project scale. We believe we are at the beginning of unlocking the Borralha project's full potential.

“Combined with a favourable environmental-impact declaration, we believe this PEA opens the door to project level financing for both our industrial scale plant and our pilot plant at the Vila Verde project."