Receipt of the general Certificate of Authorization from the Quebec Government is expected in Q1 2014 which will be followed by the construction and start-up. Pre-construction activities are scheduled to take place in 2013. The commissioning period is planned for Q1 2016 and feasibility study production levels are planned for mid-2016 in line with rail transportation availability. The Environmental and Social Impact Assessment study is planned to be submitted to the MDDEFP and CEAA within Q1 2013.
The PFS study has an accuracy of +15/-10%, which is considered industry standard for capital and operating cost estimates in a feasibility study. The only component that is not at a feasibility study precision level is the multi-user rail infrastructure component. Champion has signed a contract with CN Railway Company ("CN") whereby CN would present a feasibility study on this multi-user concept by May 31st, 2013.
In order to complete the PFS in a timely manner, the Company included the metrics from its Rail Cantech feasibility study completed in August 2012. This study is based on a 310 km railway designed for an initial capacity of 20 Mtpa that is located on the east side of the Ste. Marguerite River, starting at the CFLN project loading station and ending in the Pointe Noire area of the Sept-Iles port.
Therefore, the PFS includes an estimated cost of $9.47/tonne of concentrate for rail debt service in addition to 4.80 $/tonne for operations, totalling $14.27/tonne based on 9.3 Mtpa mine-life average production of iron concentrate. This is a higher cost than the initial rates proposed by the CN multi-user rail transportation solution. Nonetheless, it shows that the project economics are strong enough to support the construction of a new 310 km railway on its own.
Excluding the rail transportation capital cost component, the total capital expenditures during the pre-production period were estimated at $1.39 billion of which $227.3 million is allocated to the Pointe Noire concentrate stockyard facilities, as itemized in Table 2. The cost to develop the CFLN concentrator and site facilities near Fermont totals $1.167 billion, which equates to a capital intensity of $125/tonne for the 9.3 million tonnes of annualized production of iron ore concentrate.
This PFS study takes into consideration the usage of the Sept-Iles multi-user Port facility project that is currently in construction and planned for completion by Q1 of 2014. The Port Authority has communicated in December 2012 that the project is on schedule and on budget.
----------------------------------------------------------------------------Table 2: Pre-production Capital Costs---------------------------------------------------------------------------- C$ million----------------------------------------------------------------------------Mine equipment and pre-stripping 133.8----------------------------------------------------------------------------Site infrastructure 192.0----------------------------------------------------------------------------Concentrator including load out facilities 410.7----------------------------------------------------------------------------Environmental and Tailings Management 85.0----------------------------------------------------------------------------Other Pre-production Costs (rail rolling stock lease) 13.4----------------------------------------------------------------------------Port Facilities: Car dumper, stacker/reclaimer, stockyard 158.3----------------------------------------------------------------------------Railway (Owner's cost for 310 km distance including turnaround loop and sidings) 200.0---------------------------------------------------------------------------- Sub Total 1,193.2----------------------------------------------------------------------------Indirect Costs (including Owner's Costs) 300.2---------------------------------------------------------------------------- Contingency (10%) 114.6---------------------------------------------------------------------------- Grand Total (100% of the project) 1,607.8----------------------------------------------------------------------------
