MGX Minerals Inc. (OTCQB: MGXMF) (CSE: XMG) announced today that it has filed on SEDAR a National Instrument 43-101 Preliminary Economic Assessment ("PEA") Technical Report for its Driftwood Creek magnesium project ("Driftwood Creek") located in southeastern British Columbia.
The PEA study was independently prepared for MGX by AKF Mining Services Inc. (AKF), Tuun Consulting Inc. (Tuun) and Samuel Engineering Inc. (Samuel) in accordance with CIM guidelines and National Instrument 43-101 Standards of Disclosure for Mineral Projects. The PEA is now available under the Company's profile at www.sedar.com and also on the Company's website at www.mgxminerals.com.
Highlights of the PEA include the following:
- Pre-tax NPV@5% of $529.8 million, IRR of 24.5% with a 3.5-year payback
- Post-tax NPV@5% of $316.7million, IRR of 19.3% with a 4.0-year payback
- Initial capital costs of $235.9 million (Total life-of mine ("LOM") - $239.8 includes sustaining/closure costs of $3.9 million and contingency costs of $40.0 million)
- Conventional quarry pit mine with a 1200 tonne per day ("tpd") process plant using conventional crushing, grinding, flotation upgrading, calcination, and sintering to produce a saleable DBM product
- Average annual MgO production of 169,700 tonnes during a 19-year mine life
- LOM average head grades of 43.27% MgO
- LOM MgO recoveries of 90%
- LOM strip ratio of 2.4 to 1 of rock to mineralized material
PEA SUMMARY OF RESULTS
Summary of Results
|Total Capitalized Waste|
|Average Head Grades|
LOM k tonne
SUMMARY OF ECONOMICS
|Pre-Tax Cash Flow during Production||$M||$1,051|
|Avg Pre-Tax Cash Flow per Year||$M||$72.6|
|Post-Tax Cash Flow during Production||$M||$659.4|
|Avg Post-Tax Cash Flow per Year||$M||$50.9|
|Pre-Tax NPV ($M)||$529.8|
|Pre-Tax Payback (Yrs)||3.5|
|Post-Tax NPV ($M)||$316.7|
|Post-Tax Payback (Yrs)||4.0|
|MgO Cash Cost (CAD $/tonne)||$350.0|
|MgO Cash Cost incl. Sustaining Capital (CAD $/tonne)||$351.3|
The reader is advised that the preliminary economic assessment summarized in this press release is only intended to provide an initial, high-level review of the project. The PEA mine plan and economic model include the use of inferred mineral resources which 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 preliminary economic assessment will be realized.
The PEA mine plan and economic model include the use of inferred resources which are considered to be too speculative to be used in an economic analysis except as permitted by NI 43-101 for use in PEA's. There is no guarantee that inferred resources can be converted to indicated or measured resources and, as such, there is no guarantee that the project economics described herein will be achieved. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The technical portions of this press release were reviewed by Andris Kikauka (P. Geo.), Vice President of Exploration for MGX Minerals. Mr. Kikauka is a non-independent Qualified Person within the meaning of National Instrument 43-101 Standards.
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