DZP approval process achieves major milestone
The Planning Assessment Commission (PAC) has completed its review of Alkane’s Dubbo Zirconium Project (DZP) and recommended the project be approved subject to certain environmental conditions. This is a major milestone in the development timeline for the DZP, with full approval expected by Alkane Resources (ASX:ALK) during Q415.
The PAC’s recommendations are a clear step towards final approval for the DZP, Alkane’s flagship project in New South Wales, Australia. It has put forward a number of recommendations to be considered by the Department of Planning and Environment (DPE) before the development application is determined. Alkane has reviewed them and states “there is nothing that raises any material concerns for the development of the project”. The recommendations include looking at the environmental impacts on water and wildlife, along with considering project hazards and risks (including radiation).
The next stage in the approval process is for the DPE to finalize its assessment including the recommendations mentioned in the release, and forward this to the PAC for determination. Alkane expects to receive full approval in the April to June quarter of FY15. This would pave the way for some of the DZP’s third-party product agreements and financing of the project’s capex (c A$1bn) to progress significantly.
Our valuation of Alkane’s shares is A$0.88, comprising A $0.14 for the TGO, A$0.68 for the DZP, A$0.01 for its Regis Resources shareholding and A$0.05 for its cash.
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