Friday, 13 April 2012
Montero files Duyker Eiland PEA on SEDAR, revises operational cash costs
Montero Mining and Exploration (CVE:MON) said Friday it has filed its NI 43-101 compliant preliminary economic assessment (PEA) report for its Duyker Eiland phosphate project in South Africa on SEDAR and posted it to the company's website.
The PEA report, conducted by Turgis Consulting, is based on an initial inferred mineral resource (IRR) of 32.8 million tonnes, grading 7.15 percent P2O5, and shows average production of 490,000 tonnes per year of 33 percent P2O5 concentrate over an 11-year mine life.
"The results of the PEA on the initial inferred NI 43-101 mineral resource at Duyker Eiland continue to present robust economics with a NPV of C$126 million and an IRR of over 38 percent at a 10 percent discount rate,” said Montero president and CEO Dr. Tony Harwood.
"Montero recently appointed AltaCorp Capital in Toronto as advisors as we continue to engage with a number of parties interested in commercializing our phosphate assets.
"Montero remains committed to demonstrating an economic route to early production of rare earths from our flagship Wigu Hill Rare-Earth Project in Tanzania while seeking partners to develop our phosphate assets."
Montero also noted that in the process of finalizing the NI 43-101 report, Turgis revised the operating cost per tonne of product from C$99 to C$109.12, which has had an impact on the previously reported figures.
The figures of net present value (NPV), internal rate of return (IRR) and capital costs were affected, with capital costs rising slightly from C$129 million to C$132 million due to the impact of the revised operational cash costs.
The report now states that the project shows an NPV of C$126.1 million, at a discount rate of 10 percent, and an IRR of 38.14 percent. The previously projected internal rate of return IRR was 41 percent, pre-tax and before South African royalties.
All other figures remain the same, said the company.
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.
The miner also plans to increase the resource confidence and estimates, and complete sampling to allow for detailed characterization of the rock phosphate concentrates that may be produced.
An environmental and social scoping study also may start, Montero said, in preparation for pre-feasibility studies and an additional economic assessment that could be commissioned to examine the viability of a fertilizer plant investment in the area.
Toronto-based Montero is a mineral exploration and development company focused on rare earth elements (REE), phosphates and uranium in Tanzania, South Africa and Quebec, Canada respectively.
Its flagship Wigu Hill project in Tanzania is a high-grade, undeveloped light rare earth element deposit, with the company currently focused on updating the initial NI 43-101 resource estimate and advancing the hydro-metallurgical test work with Mintek.
Rare earth elements, a group of 17 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.
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.