Search Minerals Inc. (TSXV: SMY) has received positive Preliminary Economic Assessment (PEA) results for the development of its Deep Fox and Foxtrot Rare Earth Element (REE) deposits located in Labrador, Canada.
The study also assessed the establishment of a Direct Extraction Hydrometallurgical processing facility on the Island of Newfoundland. The PEA was prepared by SLR Consulting (Canada) Inc.
Key Financial Metrics (Unless otherwise indicated all values expressed in C$, Exchange rate C$1 = US$0.80):
- The project net present value (NPV) of $2.23B (before-tax) and NPV of $1.31B (after-tax), at a 8% discount rate.
- The pre-tax internal rate of return (IRR) is 55.3%, and the after-tax IRR is 41.5%.
- The pre-tax capital payback is 1.5 years and after-tax capital payback is 1.8 years from start of production.
- Initial capital costs: $422M (includes $61M contingency)
- Life of Mine: 26 years. Annual mining production: 720,000t (at 2000tpd)
- Net value: $756/t (net of process recoveries and payability terms)
- Operating cost: $345/t (including third party separation charges)
- The price for Magnet Rare Earth Oxides used: Neodymium oxide- US$212/kg, Praseodymium oxide USD$201/kg, Dysprosium oxide US$587/kg and Terbium oxide USD$2,493/kg.
“This PEA marks the achievement of a significant milestone in Search’s pursuit of establishing a secure and reliable REE mining and process industry in the province of Newfoundland and Labrador,” President and CEO, Greg Andrews, said.
“The strong economic case supports the development of mining and primary production of the Deep Fox and Foxtrot deposits in Labrador and further refining of concentrate into REE mixed oxides and carbonates on the Island of Newfoundland.”
“We believe Search is well positioned to attract strategic partners and investment as we move forward with the next steps of development including completing a bankable feasibly study and initiating the approvals process for this project.
“Our goal is to be in production by 2025. The existence of other highly prospective targets within our District provides flexibility to ramp up future development to respond to increasing market demands for our permanent magnet material.”
For further information please visit: http://www.searchminerals.ca/