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Up 1,300% in a year, why the FYI Resources (ASX:FYI) share price is rising today

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The FYI Resources Ltd (ASX: FYI) share price is edging higher today, up 2% at the time of writing.

This comes after the company emerged from a trading halt pending today’s ASX release. We take a look at the latest announcement from the ASX resource share below.

What update did FYI Resources report?

FYI Resources shares are moving higher after the company released an updated definitive feasibility study (DFS) of its high purity alumina (HPA) project. Today’s update replaces the DFS update that FYI Resources released on 31 March, which it said investors should no longer rely upon.

The new DFS estimates the net present value (NPV) of the company’s HPA project to be US$1.014 (A$1.334 billion), an increase of 87% from previous estimates. FYI said the DFS took into account “the technical and commercial improvements, market applied metrics relative to its peer group, updated inputs (exchange rate) and discount rate (8%).”

Under the new DFS the company now forecasts annual project revenue of US$261million, with annual project earnings before income, taxes, depreciation and amortisation (EBITDA) of US$186 million. It estimates a project payback period of 3.2 years.

Commenting on the updated DFS, FYI Resources managing director Roland Hill said:

The update to the company’s initial DFS was an obvious progression in the development of our HPA project strategy. The quality and robustness of our HPA Project was demonstrated in our initial DFS released in March 2020. Since then, the company has continued the evolution of the Project through further process design improvements, detailed test-work via numerous pilot plant trials and other supporting activities to assist in de-risking the Project…

The updated DFS outcome represents a persuasive economic case and demonstrates the merit of the Project in being developed as potentially one of the HPA sector’s highest quality, lowest capital and operating cost projects.

FYI Resources share price snapshot

Over the past 12 months FYI Resources has absolutely shot the lights out, with shares up 1,300%. For comparison the broader All Ordinaries Index (ASX: XAO) has gained 38% in that same time.

Year-to-date the FYI Resources share price is up 100%. At the current price of 56 cents per share, FYI Resources has a market cap of $176 million.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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