ENP Newswire - 28 July 2014
Release date- 24072014 - Toronto - Minco plc (AIM - 'MIO') is pleased to announce the filing of a Technical Report on its 100% owned Woodstock Manganese Property, New Brunswick, Canada.
A complete copy of the Technical Report can be inspected under the Company's profile on SEDAR at www.sedar.com or on the Company's website, www.mincoplc.com. The following are some selected extracts from the Technical Report.
Positive Economics of Woodstock Manganese Project
On July 10, 2014, Minco announced the results of the positive Preliminary Economic Assessment (PEA) of its wholly owned Woodstock Project which indicates a pre-tax Net Present Value ('NPV') of CDN$846 million (post-tax NPV of CDN$461 million), at a 8% discount rate and a pre-tax Internal Rate of Return ('IRR') of 17.97% (Post-tax IRR of 14.40%), based on a 3,000 tonne per day ('tpd') open pit mining, hydrometallurgical and electrowinning operation, with a pre-production capital expenditure of CDN$864 million and average annual payable production of approximately 80,000 tonnes of electrolytic manganese metal.
The PEA's base case indicates a long project life of 40 years with operating costs anticipated to be the lowest in the world averaging US$0.64/lb of electrolytic manganese metal ('EMM') produced over the first 20 years and US$0.68/lb EMM over the life of project.
The Technical Report states that 'the positive economics of the Project are attributed to four main factors, which are considered competitive advantages for the production of EMM: Low mining costs - the Plymouth deposit is amendable to low-cost open pit mining methods with low stripping ratios.
Manganese mineralization - manganese within the Plymouth deposit is present as rhodochrosite, which is readily soluble by direct sulphuric acid leaching, precluding the requirement for high-cost manganese reduction steps that are typical of manganese oxide processing.
Low operating cost - average life-of-project operating costs for the production of EMM from the Plymouth deposit lie at the leading edge of the first quartile of the global EMM industry cost curve, indicating the competitiveness of CMCs product in the global marketplace.
Long project life - the 40-year project life defined by the PEA for processing of the Plymouth deposit at the base case mill feed rate of 3,000 t/d allows for high returns on the initial capital investment and results in substantial life-of-project pre- and post-tax cumulative cash flows of CDN$4.4 billion and CDN$2.9 billion, respectively.
For all economic sensitivity cases tested (which included economic assessment of the base case and alternate cases at March 2014 spot EMM and iron ore commodity prices), the revenue to operating cost ratio remained greater than 1.5, demonstrating the robustness of the project economics.
The ability to sustain profitability during economic downturns when commodity prices fall, or during times when operating costs rise is considered to be a strong asset to the project, owing to Woodstock's low operating costs.'
Positive Socio-Economic Impacts
The Woodstock Project is expected to have a major positive socio-economic impact on the surrounding communities and on the Province of New Brunswick. The Project is expected to create employment for 223 people during the mining period and 110 people thereafter, for a total project life to 40 years. During the construction phase, levels of employment will be considerably higher. Life-of-project federal taxes are estimated at CDN$594 million in the base case while provincial taxes and royalties are estimated at CDN$932 million in the base case.
Opportunities for Co-production of Alternative Manganese Products
The hydrometallurgical process proposed for the production of EMM from the Plymouth deposit is similar to that used by commercial plants in China for hydrometallurgical processing of manganese carbonate feedstocks; however, the proposed process incorporates improved measures for environmental sustainability and a novel arrangement of unit operations for iron precipitation to accommodate the high iron content of the Plymouth deposit.
The production of highly-purified manganese sulphate solution using hydrometallurgical processing technologies provides alternative production options for the primary production of EMM from the Plymouth deposit, with opportunities for co-production of alternative manganese products such as EMD, CMD, manganese sulphate and other manganese chemicals.
The selection of EMM as the final product from hydrometallurgical processing of the Plymouth deposit for the PEA is based on manganese product market factors; however, it is noted that the hydrometallurgical block diagram developed for recovery of EMM from processing of material from the Plymouth deposit is readily amendable to reconfiguration for production or co-production of alternative manganese products as listed above with limited impact on the overall operating and capital costs for the Project.
Woodstock Capacity and World EMM Demand
At the proposed base case annual average EMM production capacity of just over 80,000 tonnes per year from development of the Plymouth deposit, at a nominal resource processing rate of 3,000 t/d, Woodstock's production capacity would represent approximately 7.5% of global demand for EMM and approximately one-third of the Rest of World (outside China) demand.
Moving forward, the assessment of specialized product markets will also identify the potential for add-on processing opportunities and added value revenue in addition to EMM production.
Further Drilling and Pre-Feasibility Study Recommended
The Technical Report states that the results of the PEA show that the Plymouth deposit on the Woodstock Project has good potential to become an economically attractive future mining and processing operation, and that a prefeasibility level study should be completed to further define and optimize this potential.
Based on the current block model and associated Mineral Resource estimate, Mercator has concluded that the Plymouth deposit, as currently defined by a 3.5% manganese cutoff value, remains open, both along strike and down dip, and that further core drilling to assess deposit extensions in these areas is warranted.
Further project development for a prefeasibility-level study will require upgrading the existing Inferred Mineral Resources to at least Indicated status for use in associated reserve estimation work. To meet this requirement, Mercator recommends that infill core drilling at 50 m section spacings be carried out to provide 50 m by 50 m drilling intercept definition of the Plymouth deposit. At least 5,000 m of infill drilling will be required to upgrade resources and a new resource estimate should be prepared after completion of that drilling program.
Exploration efforts to expand the current resource along strike and to depth are also recommended. The expansion exploration drill program is based on initial section spacing of 100 m and intercept spacing of approximately 50m on each section with the goal of extending the resource to 200 m depth.
About Minco Plc.
Minco Plc is registered in the Republic of Ireland and listed on the AIM Alternative Investment Market of the London Stock Exchange ('MIO'). In addition to evaluating the Woodstock manganese project in New Brunswick, Canada held by its wholly owned subsidiary Canadian Manganese Co.Minco is also focused on exploration and development of zinc-lead projects in Canada the United Kingdom and Ireland.
Minco also has interests in zinc-silver projects in Mexico through its holding of 30 million shares (approximately 26%) in Xtierra Inc. listed on the TSX Venture Exchange (TSX.V-'XAG'). Minco also holds a 2% NSR royalty on the Curraghinalt gold property in Northern Ireland which is being explored by Dalradian Resources Inc. (TSX-'DNA').
For further information refer to Minco's website at www.mincoplc.com
Tel: +1 709 725 0555
Tel: +1 416 362 6686
Tel: +44 (0) 8452 606 034
Forward Looking Information
This news release contains or refers to 'forward looking information' within the meaning of applicable Canadian securities legislation. In particular, all statements in this news release that address estimated resource quantities, grades and contained metals, possible future mining, and exploration and development activities are forward looking statements. By its very nature, a Preliminary Economic Assessment is preliminary.
The PEA includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the findings of the PEA will be realized.
Tetra Tech's and Thibault's assumptions, estimates, expectations, analysis and opinions used in the PEA are based on the information available to Minco, Tetra Tech and Thibault as of the date of the Technical Report.
Although Minco believes the expectations expressed in the PEA and Technical Report and other forward looking statements are based on reasonable assumptions, there is no assurance that forward looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information.
Accordingly, such statements should not be in any way construed as guarantees of future performance as actual results or developments may differ materially from those forward looking statements and readers should not place undue reliance on this information.