Manufacturer of rare earth-based metal alloys positioned
to develop high-grade rare earth resource to secure
supply
SASKATOON, SK,
May 1, 2013 /PRNewswire/ - Great
Western Minerals Group Ltd. ("GWMG" or the "Company") (TSX.V: GWG /
OTCQX: GWMGF), a leader in the manufacture and supply of rare
earth-based alloys and high purity metals with a low cost,
high-grade critical rare earth asset (the "Steenkampskraal project"
or "SKK"), today announced that it has filed its preliminary
economic analysis (the "PEA") for SKK in South Africa. The PEA results were
previously reported March 18,
2013. GWMG's strategy is to expand its opportunity as
a metals alloy producer by developing SKK as a secure source of
rare earth elements for its manufacturing process.
Project highlights
- CDN$555 Million after-tax net
present value applying a 10% discount rate and a 28% South African
corporate tax rate.
- 66% after-tax internal rate of return.
- 2.5 year estimated project payback period, on an after-tax
basis, from start of underground mining production.
- 11 year potential life of mine.
The PEA is preliminary in nature and includes an
economic assessment of Indicated Mineral Resources and Inferred
Mineral Resources (terms which have the meanings ascribed thereto
in the CIM Definition Standards for Mineral Resources and Mineral
Reserves as published by the Canadian Institute of Mining,
Metallurgy and Petroleum).
The Inferred Mineral Resources are quantified
based on the potential viability of the resource estimate of the
Steenkampskraal project and are considered too speculative
geologically to have the economic considerations applied to them
that would enable them to be categorized as Mineral Reserves (as
defined in CIM Definition Standards of Mineral Resources and
Mineral Reserves).
Mineral Resources that are not Mineral Reserves
do not have demonstrated economic viability and there is no
certainty that the results of the PEA will be realized.
Marc LeVier,
President and CEO, commented, "We have directed our resources where
we believe we can get the greatest return and add substantive value
to the project to include a focus on finalizing the feasibility
study which will provide greater clarity about project costs
thereby reducing the risk for development. Given the impact
global economies have had on the mining industry and limiting
access to capital, we have stopped geo-development drilling and
deferred other site development activities."
Mr. LeVier added, "We are actively in
discussions with parties that have indicated interest in off take
agreements for metal alloy products we produce. Any off take
agreements combined with a potential tolling agreement for the
separation plant will help to reduce the capital required to bring
SKK to production."
Capital Expenditure Highlights
Note: PEA estimates are accurate to +/- 40%
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(CAD
$Million) |
Capital
Estimate |
|
Contingency |
|
EPCM |
|
Total |
Pre-Production Capital
Expenditure |
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|
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|
|
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|
|
Exploration |
0.65 |
|
0.06 |
|
- |
|
0.71 |
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|
|
|
|
|
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|
|
Mining |
32.91 |
|
6.27 |
|
- |
|
39.18 |
|
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|
|
|
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|
|
RECl Plant |
49.69 |
|
9.31 |
|
5.11 |
|
64.11 |
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|
|
RE Separation Plant |
60.20 |
|
1.86 |
|
- |
|
62.06 |
|
|
|
|
|
|
|
|
|
Total Project Capital |
143.45 |
|
17.51 |
|
5.11 |
|
166.07 |
Deferred Capital
Expenditure |
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|
Tailings Plant |
0.97 |
|
0.19 |
|
0.23 |
|
1.39 |
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|
Closure cost |
10.14 |
|
- |
|
- |
|
10.14 |
|
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|
|
SIB Capital |
8.11 |
|
- |
|
- |
|
8.11 |
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|
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|
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|
|
Total Deferred Capital |
19.22 |
|
0.19 |
|
0.23 |
|
19.64 |
|
|
|
|
|
|
|
|
|
Total Capital Expenditure |
162.67 |
|
17.69 |
|
5.34 |
|
185.70 |
The PEA can be found under the Company's profile
on SEDAR at www.sedar.com or on its website at www.gwmg.ca.
Qualified Persons
The technical information in this news release
relating to the PEA was prepared under the supervision of Mr.
Bill McKechnie, BSc. (Hons),
Pr.Sci.Nat, MSAIMM, MGSSA, the General Manager, Africa Region of
Snowden Mining Industry Consultants (Pty) Ltd.
About GWMG
Great Western Minerals Group Ltd. is engaged in
becoming an integrated rare earth producer. Its specialty alloys
are used in the battery, magnet and aerospace industries. Produced
at the Company's wholly owned subsidiaries Less Common Metals
Limited in Ellesmere, U.K. and Great Western Technologies Inc. in
Troy, Michigan, these alloys
contain transition metals including nickel, cobalt, iron and rare
earth elements. As part of the Company's vertical integration
strategy, GWMG also holds 100% equity ownership in Rare Earth
Extraction Co. Limited, which controls the Steenkampskraal monazite
mine. In addition to an exploration program at Steenkampskraal,
GWMG also holds interests in four active rare earth exploration and
development properties in North
America.
The company routinely posts news and other
information on its website at www.gwmg.ca.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Cautionary Statement
Certain information set out in this News Release
constitutes forward-looking information. Forward-looking
statements (often, but not always, identified by the use of words
such as "expect", "may", "could", "anticipate" or "will" and
similar expressions) may describe expectations, opinions or
guidance that are not statements of fact and which may be based
upon information provided by third parties. Forward-looking
statements are based upon the opinions, expectations and estimates
of management of GWMG as at the date the statements are made and
are subject to a variety of known and unknown risks and
uncertainties and other factors that could cause actual events or
outcomes to differ materially from those anticipated or implied by
such forward-looking statements. Those factors include, but are not
limited to the assumptions and estimates in the preliminary
economic assessment of the Steenkampskraal project proving to be
accurate over time; the construction, commissioning and operation
of the proposed monazite processing facility and separation
facility within estimated parameters; mine refurbishment
activities; reliance on third parties to meet projected timelines
and commencement of production at Steenkampskraal; risks related to
the receipt of all required approvals including those relating to
the commencement of production at the Steenkampskraal mine, delays
in obtaining permits, licenses and operating authorities in
Canada, South Africa and China, environmental matters, water and land
use risks; risks associated with the industry in general, commodity
prices and exchange rate changes, operational risks associated with
exploration, development and production operations, delays or
changes in plans, including those estimated in the preliminary
economic assessment of the Steenkampskraal project; risks
associated with the uncertainty of resource estimates; health and
safety risks; uncertainty of estimates and projections of
production, costs and expenses; risks that future Steenkampskraal
and region exploration results may not meet exploration or
corporate objectives; the adequacy of the Company's financial
resources and the availability of additional cash from operations
or from financing on reasonable terms or at all; political risks
inherent in South Africa and
China; risks associated with the
relationship between GWMG and/or its subsidiaries and communities
and governments in Canada and
South Africa, radioactivity and
related issues, dependence on one mineral project; loss of, and the
inability to attract, key personnel; the factors discussed in the
Company's public disclosure record; and other factors that could
cause actions, events or results not to be as anticipated. In light
of the risks and uncertainties associated with forward-looking
statements, readers are cautioned not to place undue reliance upon
forward-looking information. Although GWMG believes that the
expectations reflected in the forward-looking statements set out in
this press release or incorporated herein by reference are
reasonable, it can give no assurance that such expectations will
prove to have been correct. Except as required by law, GWMG does
not assume any obligation to update forward looking statements as
set out in this news release. The forward-looking statements of
GWMG contained in this News Release, or incorporated herein by
reference, are expressly qualified, in their entirety, by this
cautionary statement and the risk factors contained in GWMG's
Annual Information Form available at www.sedar.com.
Cautionary Note For US Investors Concerning
Estimates of Indicated and Inferred Resources
The PEA uses the terms "Indicated" and
"Inferred" resources. United
States investors are advised that while such terms are
recognized and required by Canadian regulations, the United States
Securities and Exchange Commission does not recognize them.
"Inferred" mineral resources have a great amount of uncertainty as
to their existence, and as to their economic and legal feasibility.
It cannot be assumed that all or any part of an Inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of Inferred mineral resources may not form the
basis of feasibility or other economic studies except in limited
circumstances and with specific notification to the reader.
United States investors are
cautioned not to assume that all or any part of any mineral
resources will ever be converted into mineral Reserves (as defined
under NI 43-101). United States
investors are also cautioned not to assume that all or any part of
an Inferred mineral resource exists, or is economically or legally
mineable.
SOURCE Great Western Minerals Group Ltd.