Canada Fluorspar Announces Positive Preliminary Feasibility Study for its St. Lawrence, Newfoundland Fluorspar Project
May 11 2011 - 1:36PM
Marketwired Canada
Canada Fluorspar Inc. (TSX VENTURE:CFI) ("CFI" or the "Company"), is pleased to
announce the results of a National Instrument 43-101 Technical Report and
Preliminary Feasibility Study ("PFS") for its underground, St. Lawrence
Fluorspar project in Newfoundland, Canada. The PFS was prepared by the
independent engineering firm, Roscoe Postle Associates Inc. (RPA) in
consultation with SNC-Lavalin Inc. The PFS provides for a 122,000 tonne per
annum ("TPA") fluorspar production facility, with construction expected to begin
in 2011, and production to commence 2013. All dollar amounts are in Canadian
dollars, unless otherwise stated.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
PRELIMINARY FEASIBILITY STUDY US$425/MT US$510/MT
HIGHLIGHTS Base Case Base Case +20% (i)
----------------------------------------------------------------------------
Pre-Tax Net Present Value("NPV") @
5.0% Discount Rate $129.1 million $229.0 million
----------------------------------------------------------------------------
Pre-Tax Net Present Value ("NPV") @
7.5% Discount Rate $89.2 million $170.0 million
----------------------------------------------------------------------------
Pre-Tax Internal Rate of Return
("IRR") 20.3% 30.8%
----------------------------------------------------------------------------
Cash Operating Costs (per tonne
processed) $70.62 $70.62
----------------------------------------------------------------------------
Capital (required to build 122,000
TPA of Fluorspar Concentrate
Production) $98 million
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) - approximates current market price
"The results of this independent report highlight the attractive economics of
the project, which combined with the size, quality, logistical and
infrastructure advantages make this a significant fluorspar asset," stated
Lindsay Gorrill, President and CEO of CFI. "The upward movement in current
fluorspar prices to approx. US$500 per MT (quoted x-port China as reported by
Industrial Minerals Magazine a trade publication on May 6th, 2011) adds
significant upside to the economics of the project."
"These positive results will permit the Company to move forward immediately to
the design stage with production targeted for 2013."
Base Case Economic Analysis and Assumptions
The PFS calculates a base case pre-tax NPV of $129.1 million and a pre-tax IRR
of 20.3%, assuming a 5.0% discount rate. Production of fluorspar is estimated to
average 122,000 TPA over a fifteen year mine life. The capital costs associated
with the pre-production phase are estimated to be $98 million, while the ongoing
capital costs are estimated to be $62 million (which is expected to be paid from
cash flow generated by the project). The table below summarizes the total
initial capital costs and ongoing capital expenditures.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LOM
Summary of Capital Costs ($'s in Millions) Pre-Production Ongoing Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Mine & Mill 41.6 26.4 68.0
----------------------------------------------------------------------------
Infrastructure & Indirect Costs 47.6 9.6 57.2
----------------------------------------------------------------------------
Sustaining Capital 0 16.1 16.1
----------------------------------------------------------------------------
Closure 0 5.8 5.8
----------------------------------------------------------------------------
Sub Total 89.2 57.9 147.1
----------------------------------------------------------------------------
Contingency 8.9 3.6 12.5
----------------------------------------------------------------------------
Total Capital Costs 98.1 61.5 159.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The base case assumes that the long term price of fluorspar is US$425.00 per
tonne based on an independent market study performed as of March 2011, and that
the cash operating costs for producing fluorspar are $207.95 per tonne of
concentrate produced. The table below summarizes the total operating costs
associated with the anticipated production of 122,000 TPA of fluorspar
concentrate:
----------------------------------------------------------------------
----------------------------------------------------------------------
Summary of Annual Operating Costs ($'s in Millions)
----------------------------------------------------------------------
----------------------------------------------------------------------
- Mining 14.9
----------------------------------------------------------------------
- Processing 5.9
----------------------------------------------------------------------
- Site Services 2.3
----------------------------------------------------------------------
- General & Administration 2.3
----------------------------------------------------------------------
Total Operating Costs 25.4
----------------------------------------------------------------------
----------------------------------------------------------------------
Several factors contribute to the projected low operating cost including:
- Existing Infrastructure
- Access to Fresh Water
- Reasonable Energy Cost
- Close Proximity to the Wharf
BASE CASE SENSITIVITY ANALYSIS
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NPV Millions
Price NPV Millions (C$) @ (C$) @ 5%
Parameter (US$/T Conc.) 7.5% (Pre-Tax) (Pre-Tax)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
+20% 510.0 170.4 229.4
----------------------------------------------------------------------------
+10% 467.5 129.8 179.3
----------------------------------------------------------------------------
Base Case 425.0 89.2 129.1
----------------------------------------------------------------------------
-10% 382.5 48.6 79.0
----------------------------------------------------------------------------
-20% 340.0 8.0 28.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Proposed Mining Operations and Processing
The current basis of the PFS assumes initial production from the Blue Beach
North mine which will provide for the first seven years production followed by
an additional eight years of production from the Tarefare No. 2 mine. The
average production over the mine life is anticipated to be 359,000 tonnes of ore
per annum providing an average concentrate production of 122,000 tonnes per
year, with a maximum of 129,000 tonnes. The Alimak mining method was selected as
the most suitable for the orebody geometry providing safe, efficient and cost
effective extraction. Processing will consist of initial upgrading of the mill
feed via a dense media separation or DMS plant, followed by grinding and
flotation, to produce a high quality concentrate grading 97.5% CaF2 and less
than 1 % SiO2. The availability of a wharf, within one kilometre of the mill
site will be a major cost advantage for the project.
Significant Mineral Resource Estimate
The mineral resource estimate completed by RPA in April, 2009 (See Technical
Report on the St. Lawrence Fluorspar Project, St. Lawrence, Newfoundland &
Labrador filed under the companies profile on SEDAR on May 21, 2009) is set out
in the following table:
Estimated Fluorspar Mineral Resources
(April, 2009)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
------------------------------------
Property Category Tonnes (000's) Grade (%CaF2)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Blue Beach North Indicated 4,390 39.0
Tarefare No. 2 Indicated 4,700 44.8
TOTAL Indicated 9,090 42.0
Blue Beach North Inferred 355 30.0
Blowout Veins Inferred 595 31.8
TOTAL Inferred 950 31.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
1. CIM definitions were followed for the resource estimate.
2. Mineral Resources are estimated at a cut-off grade of 20% CaF2 and
a minimum horizontal width of 2.0 m.
3. Average density of mineralized rock is 2.9 t/m3.
4. Tonnage and average grade numbers are rounded.
5. Mineral Resources exclude mined out areas from historical mining.
Given the size of the resource estimate, the project is expected to have a
reasonably long mine life of approximately 15 years. Approximately 68% of the
indicated resource would be extracted during the projected 15 year mine life.
There are significant resources in addition to currently defined mineral
reserves which provide opportunity to extend the mine life.
The conversion of resources to reserves is indicated in the following table.
Estimated Mineral Reserves
(April, 2011)
----------------------------------------------------------------------------
DESCRIPTION Tarefare Blue Beach Total
----------------------------------------------------------------------------
Tonnes Grade Tonnes Grade Tonnes Grade
----------------------------------------------------
('000 t)(% CaF2) ('000 t) (% CaF2) ('000 t) (% CaF2)
----------------------------------------------------
Main Vein at 30% CaF2(i) 3,788 52.05 3,319 44.70 7,107 48.62
Undiluted Stoping
Quantity (Excluding
Pillar Recovery) 2,400 48.55 2,164 42.45 4,564 45.66
In Pillars 2,207 44.25 1,837 39.10 4,044 41.91
Dilution % 17% 20% 18%
Extraction 90% 90% 90%
Total Reserves 2,742 43.05 2,641 36.54 5,383 39.86
----------------------------------------------------------------------------
Notes:
1. CIM definitions were followed for the reserve estimate.
2. Mineral Reserves are estimated at a cut-off grade of 30% CaF2.
3. Tonnage and average grade numbers may not total due to rounding.
Report Filing
The complete PFS will be filed on SEDAR (www.sedar.com) and the Company's
website (http://www.canadafluorspar.com) within 45 days.
Qualified Persons
The PFS was prepared by Hrayr Agnerian, M.Sc. (A), P. Geo, and Normand Lecuyer,
P. Eng. of RPA in conjunction with Ray Bailey, P. Eng., and Michel Wawrzkow, P.
Eng., P. Geo., of SNC-Lavalin who provided input for the mine site
infrastructure and capital cost and the environmental aspects, respectively.
Each of these individuals is a qualified person for the purposes of National
Instrument 43-101, and has reviewed and verified the data disclosed in this news
release.
About the Company
The Company is a specialty mineral resource company engaged in the development
and production of fluorspar deposits at its property located in St. Lawrence,
Newfoundland, Canada, and is moving forward to reactivate existing underground
fluorspar mines, expand an existing mill, construct a new, environmentally-sound
Tailings Management Facility and build a new deep-water marine terminal in the
outer St. Lawrence Harbour for the export of fluorspar concentrate product.
For more information please see: www.canadafluorspar.com
Cautionary Note and Forward-looking statements
This press release contains forward-looking statements which include, but are
not limited to: statements regarding the results and projections contained in
the preliminary feasibility study of the project at St. Lawrence, resource
estimates, expected mine life, anticipated production, commencement of
construction and production, projected pre-tax net present values and internal
rate of returns, projected operating costs and capital costs, proposed mining
techniques, required to construct and produce at expected levels, projected
market prices of fluorspar, current development and operating objectives and
outlook, expectations, opinions, forecasts, projections, guidance or other
statements that are not statements of fact. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
cannot give any assurance that such expectations will prove to be correct.
Results of the Company may be affected by a variety of variables and risks
associated with mining development including: loss of market, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers, ability to access
sufficient debt and equity capital from internal and external sources, ability
to generate sufficient cash flow to meet its current and future obligations,
regulatory approvals affecting construction and mining operations. Such
forward-looking statements are also based on a number of assumptions which may
prove to be incorrect, including, but not limited to, assumptions about the
following: the availability of financing for exploration and development
activities; the estimated timeline for the development of the project at St.
Lawrence, the supply and demand for, and the level and volatility of the price
of fluorspar, the assumptions on which resource estimates are based, the receipt
of necessary permit, market competition, ongoing relations with employees and
impacted communities, and general business and economic conditions. In addition,
the operating and capital costs in the preliminary feasibility study were
developed to be reasonable estimates within industry benchmarks. There is no
certainty that the results of the preliminary feasibility study will ever be
realized. Should one or more of the risks or uncertainties involved in
forward-looking statements relating to the preliminary feasibility study
materialize, or should the assumptions underlying the preliminary feasibility
study prove incorrect, actual results of the preliminary feasibility study may
vary materially from those anticipated, believed, estimated or expected.
Accordingly, readers should not place undue reliance on forward-looking
statements.
The Company's forward-looking statements are expressly qualified in their
entirety by this cautionary statement and are made as of the date of this news
release. Unless otherwise required by applicable securities laws, the Company
does not intend nor does it undertake any obligation to update or review any
forward-looking statements to reflect subsequent information, event, results or
circumstances or otherwise.
Califfi Capital (TSXV:CFI)
Historical Stock Chart
From Sep 2024 to Oct 2024
Califfi Capital (TSXV:CFI)
Historical Stock Chart
From Oct 2023 to Oct 2024
