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TORONTO, ONTARIO -- (Marketwire) -- 12/12/12 -- Chieftain Metals Inc. ("Chieftain" or the "Company") (TSX: CFB) is pleased to announce that JDS Energy and Mining Inc. has led the completion of an independent, NI 43-101 compliant Feasibility Study on the high-grade Tulsequah Chief polymetallic deposit located in north-western British Columbia.
Highlights of the Tulsequah Chief Feasibility (Table 1)
-- The study is based on a 2,000 tonne per day underground mining operation with a 9-year mine life.-- Pre-production capital costs are estimated to total $439.5 million, with an additional $64.0 million in sustaining capital over the life-of-mine and closure costs net of salvage value of $6.2 million (all amounts in Canadian dollars unless stated otherwise).-- Operating costs are estimated to total $125.96/tonne.-- Price deck for metals and foreign exchange is based on the three year trailing average prices.-- The study yields a pre-tax NPV8% of $192.7 million and an IRR of 16.5% and post-tax NPV8% of $146.0 million and an IRR of 14.9%.
Victor Wyprysky, President and CEO commented: "We are pleased to deliver a feasibility study demonstrating robust economics for Tulsequah. The NPV8% of $192.7 million represents a pre-tax Net Asset Value of approximately $13.24 per share and average annual EBITDA at full production of $120.4 million or $8.28 per share based on the current outstanding shares. This study will enable Chieftain to finalize project financing and plan construction start-up. The project will bring significant benefits for the Taku River First Nation, the Atlin community and British Columbia, and Chieftain is fully committed to continue to build strong relationships with the community while developing the project in a socially and environmentally responsible manner within the guidelines of the Atlin-Taku Land Use Plan."
Table 1. Highlights of the Tulsequah Chief Feasibility Study
---------------------------------------------------------------------------- Payable Metal Metal Pricing(1) ----------------------------------------Probable Reserve 6.45 Mt Au 2.30 g/t 403.9 k oz US$ 1,455/oz Ag 81.38 g/t 11,971.8 k oz US$ 28.00/oz Zn 5.59% 601.5 M lbs US$ 0.97/lb Cu 1.12% 135.5 M lbs US$ 3.66/lb Pb 1.04% 93.0 M lbs US$ 1.01/lb Exchange Rate 1.01 CDN:USD----------------------------------------------------------------------------Mining rate 2,000 t/d NSR $ 265.71/tMine life 9 yearsInitial Capex $ 439.5 M Operating costSustaining Capex $ 64.0 M - Site $ 98.13/tClosure Costs net $ 6.2 M of Salvage Value - Off-site $ 27.83/t Total $ 125.96/t---------------------------------------------------------------------------- Pre-Tax Post-Tax----------------------------------------------------------------------------Undiscounted Net $ 570.7 M $ 473.5 M Cash FlowNPV (8%) $ 192.7 M $ 146.0 MIRR 16.5% 14.9%Payback period 3.9 years 4.4 years----------------------------------------------------------------------------(1) Three-year trailing average prices in US dollars.
