Globex Mining Enterprises (TSE:GMX) (OTCQX:GLBXF) unveiled Friday the "positive" results of a preliminary economic assessment (PEA) on its large Timmins talc-magnesite project, located 13 kilometres south of Timmins, Ontario.
The company said the results of the PEA support completing a
feasibility study, including a program of infill drilling to upgrade the
known resource to reserve status.
Technical studies to permit production at the mine site have been underway for over a year, Globex added.
economic study, completed by Jacobs Minerals Canada and Micon
International, estimated a net present value of $258.0 million, after
tax and at a discount rate of eight percent, with a 20 percent internal
rate of return and a payback period of 5.8 years.
The model assumes the first 20 years of mining, and a process feed
rate of 500, 000 tonnes per year, with strip ratios averaging 2.4 to
produce high-brightness talc and magnesium oxide.
The study was constructed around a conceptual open pit mining model
assuming contract mining, crushing and haulage to a nearby processing
The average grade for the first 10 years was calculated at 34.6 percent talc and 52.4 percent magnesite, Globex said.
operating costs were estimated at $986.5 million for the 20-year mining
period or an average of $98.65 per tonne processed.
Total pre-production capital expenditures are seen at $268.4 million
over a two year period, excluding working capital. Total sustaining
capital was estimated at $64.9 million.
In addition, working capital of $16.0 million, the equivalent of four
months of operating costs, has been set to be maintained throughout the
The company said total gross sales over the first 20 years, of a
total mine of 60 plus years, were projected at $2.58 billion from talc
production of 2.47 million tonnes and magnesia output of 2.38 million
These calculations assume a $500 per tonne talc sales price, and a $570 per tonne magnesia sales price.
The cash operating margin averages 61 percent over the initial 20-year period, Globex said.
PEA report was based on an initial mineral resource report on the
project from March 2010, which included 12.73 million indicated tonnes
at a grade of 52.1 percent magnesite and 35.4 percent talc in the A Zone
Core, with 18.78 million inferred tonnes at a grade of 53.1 percent
magnesite and 31.7 percent talc.
In addition, the A Zone Fridge
holds another 5.0 million tonnes of inferred resources, grading 34.2
percent magnesite and 33.4 percent talc.
The optimized open pit
shell contains a mineral resource sufficient to support a 60-year mine
life, with the PEA only considering the first 20 years of this period,
Globex also noted that the mangesia leach and
decomposition process has not yet been demonstrated at the scale of the
proposed commercial production plant.
The company plans to continue to work together with provincial and
municipal authorities, and the First Nations and the Métis Nation of
Ontario for the project.