Montero Mining and Exploration (CVE:MON) unveiled Tuesday the results of an NI 43-101 compliant preliminary economic assessment (PEA) for its Duyker Eiland phosphate project, showing "robust economics" with a pre-tax net present value of C$150 million at a 10 percent discount rate.
The project is located 30 kilometres north of the Port of Saldanha,
in the Western Cape province of South Africa. The company said it is
already in discussions with a number of interested parties for
commercializing its phosphate assets.
Shares of Montero were up 2.56 percent Tuesday morning at 20 cents on the TSX Venture Exchange.
The PEA report, conducted by Turgis Consulting, is based on an
initial inferred mineral resource of 32.8 million tonnes, grading 7.15%
P2O5, and shows average production of 490,000 tonnes per year of 33%
P2O5 concentrate over an 11-year mine life.
The company said that an average of 4.5 million tonnes of rock would be mined per year at low stripping ratios of 0.57:1.
As reported late last year, preliminary metallurgical test work has
indicated that an acid-grade phosphate concentrate of 33%to 35% P2O5 can
be produced by flotation.
"We are pleased the results of the
PEA on the initial Inferred NI 43-101 Mineral Resource at Duyker Eiland
has returned such robust economics with a NPV of CAD$ 150 million with a
10% discount rate," said Montero president and CEO, Dr. Tony Harwood.
"Montero is in discussions with a number of parties interested in commercializing our phosphate assets.
remains committed to establishing early production on our flagship Wigu
Hill Rare-Earth Project in Tanzania while seeking partners to develop
our phosphate assets.”
Indeed, the company's Duyker Eiland
phosphate project could prove lucrative with a projected internal rate
of return (IRR) of 41 percent, pre-tax and before South African
royalties. Montero said there are also opportunities to increase the
value of the project through the production of fertilizers.
a reduction in product revenue per tonne of 15 percent (USD$ 160) the
project still demonstrates robust returns with an IRR of 27 percent.
Currently, 70% BPL rock phosphate FAS Casablanca is published by the
World Bank at USD$ 202 per tonne (January 2012)," Montero said in
Operating cash costs were estimated at C$99
per tonne of concentrate Free alongside Ship (FAS) Port of Saldanha,
South Africa, including 20 percent contingency.
logistics costs, which include transport to port, warehousing at port
and transport to wharf alongside ship (FAS), were calculated based on a
budget quote received from a local transport company, the company said.
Total capital costs are seen at C$129 million for the project.
company said the net present value of Duyker does not include
expenditures required for exploration and engineering development this
year and in 2013. Montero plans to continue to explore the possibility
of production of other higher-content phosphate fertilizers and other
products to generate additional returns for the asset.
also plans to increase the resource confidence and estimates, and to
complete sampling to allow for detailed characterization of the rock
phosphate concentrates that may be produced.
and social scoping study may start, Montero said, in preparation for
pre-feasibility studies and additional economic assessment that could be
commissioned to examine the viability of a fertilizer plant investment
in the area.
Toronto-based Montero Mining is a mineral
exploration and development company focused on rare earth elements
(REE), phosphates and uranium in Tanzania, South Africa and Quebec,
Its flagship Wigu Hill REE project in
Tanzania is a high-grade, undeveloped light REE deposit, with the
company currently focused on updating the initial NI 43-101 resource
estimate and advancing the hydro-metallurgical testwork with Mintek.
earth elements, a group of 15 metals, are critical in the development
of emerging green technologies and high-tech applications, from electric
and hybrid vehicles and wind and hydro power turbines, to LCD screens,
MRI, X-ray machines, mobile devices and other computing equipment.
this month, Montero said it identified measurable amounts of strontium
in bastnaesite-bearing carbonatite dikes in the Twiga Zone at its Wigu
Hill rare earths project in Tanzania.
The strontium found at the
site occurs as strontianite (SrCO3), the company said, which is
associated with the rare earth and gangue minerals, and was established
during initial mineralogical work that identified bastnaesite and
synchisite as the main rare earth-bearing minerals.
The Wigu Hill property was first identified in the 1950s as a high
grade deposit, with a large carbonatite complex measuring 6.4 by 3.2
kilometres. The asset has bastnaesite mineralization and is considered a
"look-a-like" to Molycorp's (NYSE:MCP)
Mountain Pass project. The rare earth elements at the deposit are
hosted in the mineral bastnaesite found in carbonatite dikes, making it
similar to Molycorp's Mountain Pass deposit in the USA.
Montero is working to update the initial NI 43-101 compliant resource
estimate for the Wigu Hill project this quarter, and is targeting cash
flow from a small mining operation at the Twiga Zone.
Last September, the company released a 3.3 million tonne inferred
resource on only a fraction of the Wigu Hill complex. Only the Tembo and
Twiga deposits on the eastern side were estimated to contain an
inferred resource of 3.3 million tonnes at a grade of 2.6% light rare
earth oxide (LREO5).
Montero is focused on upgrading the resource, and has hired Turgis
Consulting to perform a scoping study on the property, due out in the
first half of this year.