Here are 5 ASX resources stocks with a DFS unveiled in the last 12 months!

ASX resources stocks with a DFS (Definitive Feasibility Study) have the best possible chance for investors to profit. Companies in such a position have a good idea of just how much money they can make if they bring their project into production. But they also have an idea of how much time and money it will cost, and how quick they can get that money back. It is still no certainty that the company’s dream to be a major miner will be realised, but a company with a DFS is closer to it than micro-cap explorers. Let’s look at 5 companies in this position.

5 ASX resources stocks with a DFS unveiled in the last 12 months

Murchison Gold (ASX:MEK)

Murchison’s project is 46km northeast of Meekatharra and 800km northeast of Perth. It has a Mineral Resource of 1.2Moz @ 3g/t gold and an Ore Reserve of 305koz @ 3.8g/t. Murchison completed its DFS last May and it came up with 2 outcomes, one with an A$3,250/oz gold price and the other with an A$3,500/oz gold price. The former delivered an NPV of $202m post-tax, but this was an IRR of 84% and a payback of 8-months considering the All-in Sustaining Cost (AISC) was $1,804/oz. It anticipated 9 years of production with 390,000/oz over that time frame.

With the gold price over A$5,000 – it is fair to say the returns would be even higher now, although of course it wouldn’t be safe to assume gold prices will keep growing up forever. The company’s sensitivity analysis found that each A$100/oz change in gold prices would deliver a ~$37m change in pre-tax free cash flow.

Lithium Universe (ASX:LU7)

Moving from a commodity at the top end of the spectrum (gold) to one in the doghouse right now (lithium). Lithium Universe released its DFS for its battery refinery in Canada back in February. It found a pre-tax NPV of US$718m, a pre-tax IRR of 21% and a payback of 3.9 years. Crucially, it assumed a lithium price of US$1,170/t, well ahead of the US$775/t.

To be fair, the former was a more ‘reasonable’ lithium price before the bull run in 2022. With regard to battery-grade lithium carbonate, it estimated a price of US$20,970/t, up from US$10,680/t right now. Lithium Universe hopes to produce up to 18,270/t per year of green battery-grade lithium carbonate, but it will cost US$549m to set up.

Alliance Nickel (ASX:AXN)

Still with battery metals, Alliance Nickel released its DFS in November last year for its NiWest Nickel-Cobalt project. It plans 20,000t nickel and 1,600t cobalt for at least 12 years. This may not sound like a lot, but this is nickel laterite and amongst the highest-grade in Australia. And so it will lead to a post-tax free cash flow of A$6.1bn over the life of the mine (which is planned for 35 years). The NPV is $1.5bn, representing an IRR of 17.6% and a payback period of 5 years. A Final Investment Decision (FID) is targeted for later in 2025 and first production anticipated in late 2027.

Larvotto Resources (ASX:LRV)

Over to the East side of Australia, Larvotto (ASX:LRV) recently unveiled a DFS for its Hillgrove Antimony-Gold project. Antimony is a battery/semiconductor metal used for its conductivity, but is quite rare and thus is a ‘critical metal’. LRV assumed US$25,000/t as the antimony price in its base case – just goes to show that it is ‘critical’.

Larvotto constructed three cases – ‘Base’, ‘Mid’ and ‘Spot’, with the latter reflective of the high prices (A$3,300/oz and $57,000/t antimony). All cases assumed an 8-year mine life with 40,566/oz production, 4,878/t antimony production per year and capital costs of A$127-140m. The Base Case delivered A$280m NOV and an IRR of 48%, which would see a payback in 2.2 years. The Spot case delivered an NPV of $1,269m and a 153% IRR.

Toubani Resources (ASX:TRE)

We have to disclose upfront that Toubani’s project (Kobada) is in Mali, the same country that all but forced Leo Lithium out. However, Toubani has claimed to have secured an agreement with the state of Mali that will give it a 35% interest in return for a 2% reduction in its royalty rate and just 25% corporate tax for the first 5 years.

Once in production, Toubani’s Kobada Project will produce for at least 9 years at 162,000/oz annually. The DFS, unveiled in November last year, depicted a post-tax NPV of US$635m, a post-tax IRR of 57.5% and a payback of 1.5 years. The gold price was US$2,200/oz for that study.

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