Clean Air Metals Announces a PEA of the Current and Escape PGE-Cu-Ni Deposits of the Thunder Bay North Project, with post-tax NPV5 of C$378m, IRR 29.8%

Clean Air Metals Announces a PEA of the Current and Escape PGE-Cu-Ni Deposits of the Thunder Bay North Project, with post-tax NPV5 of C$378m, IRR 29.8%

by ahnationtalk on December 1, 202123 Views

THUNDER BAY, ON, Dec. 1, 2021 – Clean Air Metals Inc. (“Clean Air Metals” or the “Company”) (TSXV: AIR) (FRA: CKU) (OTCQB: CLRMF) is pleased to announce results from an independent Preliminary Economic Assessment (PEA) that was completed for its Thunder Bay North Platinum Group Element (PGE) – Copper (Cu) – Nickel (Ni) Project (“Thunder Bay North” or the “Project”) near Thunder Bay, Ontario, Canada. The PEA was prepared by Nordmin Engineering Ltd. (“Nordmin”) of Thunder Bay, Ontario, and includes a new stand-alone milling complex and waste storage facility (WSF) with mill feed from both the Current deposit and the Escape deposit, part of the Thunder Bay North Project Mineral Resource Estimate as amended, that was completed by Nordmin (see press release dated January 20, 2021). All amounts are in CAD dollars, unless otherwise stated. Summary results of the PEA are shown below in Table 1.

The PEA was independently prepared by Mr. Glen Kuntz, P.Geo., Mr. Kurt Boyko, P.Eng. and Mr. Brian Wissent, P.Eng. of Nordmin, Mr. Lyn Jones, P.Eng. of Blue Coast Research, Mr. Wilson Muir, P.Eng. of Knight Piésold Ltd., Mr. Kris Tuuttila P.Geo. (Limited) of DST Consulting, and Dr. Geoff Heggie, Exploration Manager of Clean Air Metals, who are considered “Qualified Persons” under National Instrument 43-101 Standards of Disclosure for Mineral Projects. The technical disclosure in this news release is based upon the information in the PEA prepared by or under the supervision of Mr. Kuntz, Mr. Boyko, Mr. Wissent, Mr. Jones, Mr. Muir, Mr. Tuuttila, and Dr. Heggie.

Project Metrics (Table 1)

  • The Project has a pre-tax net present value (NPV) of $425.0 million, and after-tax NPV of $378.4 million, at a 5% discount rate.
  • The pre-tax internal rate of return (IRR) is 31.1%, and the after-tax IRR is 29.8%.
  • The capital payback is 2.4 years from start of production.
  • Revenue’s average $239.8 million per year from sale of PGE and Copper mineral concentrates.
  • Total mined metal production over a 10-year mine life based on the present resource base is expected to be 629 k oz Platinum, 618 k oz Palladium, 111 M pounds Copper, 57 M pounds Nickel, 38 k oz Gold, 850 k oz Silver, or 2,886 k oz PtEq1.
  • 65.2% of total mineral production occurs in the first 5 years.
  • Operating margin of 59% in the first 5 years and Life-of-Mine Operating margin of 53%.
  • The Project is located in close proximity to key infrastructure near the City of Thunder Bay, Canada.
  • Base case economics were calculated using a 2-yr trailing average price deck (Table 2)

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Equivalency formula can be viewed in the following Link (Click Here)

PEA Key Metrics

Table 1: Key Financial and Project Metrics

Project Metric

Units

Value

Pre-tax NPV @ 5%

$M

$425.04

After-tax NPV @ 5%

$M

$378.38

Pre-tax IRR @ 5%

% (real)

31.1

After-tax IRR @ 5%

% (real)

29.8

Payback Period from start of production

Years

2.4

Initial Capital Expenditure (“Capex”)

$M

$367.17

Initial EPCM / Indirects (incl. in Capex)

$M

$41.16

Initial Contingency (incl. in Capex)

$M

$60.20

Maximum Production Rate

Mtpa

1.3

Mine Life

Years

10

Ramp-up Years

Years

1

Long-hole Open Stoping Mill Feed

kt

10,338

Drift and Fill Mill Feed

kt

1,946

Total Mill Feed

kt

12,284

Life of Mine Mill Feed Grade

EqPt (g/t)

7.3

Total Revenue

$M

$2,245

Total Operating Costs

$M

$1,057

Pre-tax Operating Cashflow

$M

$1,188

Total Capital

$M

$536

Net Smelter Return (NSR)

$/tonne mill feed

$178.02

Operating Margin

%

53%

Operating Costs

Underground Mine Operating Costs

$/t mill feed

$47.37

Processing Plant / WSF

$/t mill feed

$25.03

General and Administration (G&A) Costs

$/t mill feed

$6.87

Royalties

$/t mill feed

$2.63

Transportation to Smelter

$/t mill feed

$4.71

Total Unit Operating Costs

$/t mill feed

$86.61

Notes: PtEq Grade = Total Metal Value in 1 Tonne ÷ Pt Price per Oz × 31.10348 g per oz and
includes total 6 metals (Platinum, Palladium, Gold, Silver, Copper and Nickel)

The Company has not made a production decision at the Thunder Bay North Project and there is no guarantee that a production decision will be made or that the production rates at the Thunder Bay North Project will be achieved. There are no Mineral Reserves for the Thunder Bay North Project currently. The information reported in the PEA for the Project is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Inferred Mineral Resources are based on limited geological evidence and sampling. The tonnage and grade of Inferred Mineral Resources have significant uncertainty as to their existence and as to whether they can be mined economically. There is no certainty that results for the PEA for the Project will be finally realized.

Executive Remarks

Executive Chair Jim Gallagher, P.Eng. stated: “The initial PEA for the Thunder Bay North Project brings together two previously independent deposits into one mining plan which is relatively low risk, low capital, quick to production and generates robust financial metrics. Given the significant potential upside with continued exploration drilling along the known conduits and with the already identified massive sulphide targets we believe that this PEA is a minimum base case that Clean Air Metals will continue to attempt to de-risk towards prefeasibility.”

CEO Abraham Drost, P.Geo., stated that “the PEA sets a mine plan that allows the Company to move forward with several de-risking objectives. These include:

      1. converting mine plan-impacted unpatented mining claims to mining leases;
      2. engaging with regulators toward early commencement of the mine permitting process;
      3. continuation of the environmental impact studies (EIS) led by Englobe/DST Engineering;
      4. commencement of prefeasibility technical studies including optimization and tradeoffs around mining, metallurgy and mill design; and
      5. negotiation of Impact and Benefit agreements with affected First Nations and Métis.”

Significant Production Potential

  • The study considers a 1.3 Mtpa (million tonnes per year) 3,600 tpd mill throughput ramp-access underground mining operation with over a 10 year mine (project) life plus 2 years of construction. Early revenue is generated by mining near surface production areas and prioritizing high grade near surface material from the high head grades from the Lower Current and Bridge Zones grading 9.4 g/t PtEq insitu for first 4 years of production.
  • Operating costs average $86.61 per tonne mined with an NSR of $178.02 per tonne over a 10-year life of mine (LOM).

Development Capital

  • Initial capital expenditures (CAPEX) are $367.17 million (includes EPCM of $41 million and contingency of $60 million) and ongoing capex for the life of the project is $169 million.

Read More: https://www.cleanairmetals.ca/news-media/news-releases/clean-air-metals-announces-a-pea-of-the-current-an-122539/

NT4

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