Noront Announces Economic Mineral Reserve At Eagle's Nest
TORONTO, Aug. 23, 2011 /CNW/ --
TORONTO, Aug. 23, 2011 /CNW/ - Noront Resources Ltd. ('Noront' or the 'Company') (TSX Venture: NOT) is pleased to announce the results of an updated National Instrument
43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101')
compliant Pre-Feasibility Study ('PFS') for a stand alone nickel,
copper, platinum group element ('Ni-Cu-PGE') mine and mill complex
exploiting the Company's 100% owned Eagle's Nest deposit (the
'Project'), McFaulds Lake, James Bay Lowlands, Ontario, effective
August 23, 2011. The results of the independent study, completed by
Independent Consultants(1) under the supervision of Micon International ('Micon'), concluded that
the previously defined Eagle's Nest mineral resource is economic and
can be classified as a mineral reserve.
PRE-FEASIBILITY STUDY HIGHLIGHTS:
The Project economics, based on the Assumed Metal Prices(2) are:
-- Proven and probable mineral reserves of 11.1 M tonnes
averaging:
o 1.68% Ni, 0.87% Cu, 0.89 g/t Pt, 3.09 g/t Pd and 0.18 g/t Au;
-- After tax NPV at a 6.0% discount factor of approximately $560
million;
-- After tax IRR exceeding 20%;
-- Estimated initial capital investment of $734 million split as
follows:
o Mine site infrastructure and development capital of $500 million
o Shared infrastructure and slurry pipeline capital of $234 million
(1)
-- Estimated life of mine sustaining capital estimated to be $143
million;
-- Estimated operating costs of $75 - $80 per tonne or $2.75 per
pound nickel equivalent;
-- Estimated free cash flow of approximately $175 million per
year;
-- Estimated mine life of 11 years with a 3 year capital payback
period.
Wes Hanson, CEO of Noront states: 'Establishing the first mineral reserve in this evolving mining camp is a
milestone development that we believe will accelerate meaningful
discussion on the infrastructure necessary to support development of
this very exciting district. It positions the Company to begin
negotiating downstream agreements that will provide future funding for
continued development of the Project without excessive shareholder
dilution. The estimated capital and operating costs compare very
favourably to other advanced nickel projects being considered for
development.' Mr. Hanson adds: 'With established inferred resources at depth offering immediate economic
upside, robust exploration potential within our existing land package,
the continuing challenges facing nickel laterite projects and the
strong projected growth in stainless steel production, Noront
represents a compelling investment opportunity as we continue the
transition to nickel producer. We are targeting the first quarter of
2012 to have a completed Feasibility Study for Eagle's Nest that will allow the Company to begin arranging project financing
with the objective of commercial production by 2016.'
MINERAL RESERVES AND RESOURCES FOR EAGLE'S NEST DEPOSIT:
The following table summarizes the estimated mineral reserves and
resources.
tonnes Nickel Copper Platinum Palladium Gold
(x (%) (%) (g/tonne)
1,000) (g/tonne) (g/tonne)
Mineral Reserves
Proven 5,264 2.02 1.04 1.01 3.45 0.19
Probable 5,867 1.38 0.72 0.78 2.76 0.18
Proven
and 11,131 1.68 0.87 0.89 3.09 0.18
Probable
Mineral Resources (exclusive of
Mineral Reserves)
Inferred 8,966 1.10 1.14 1.16 3.49 0.30
OVERVIEW:
The objectives of the PFS were:
-- To establish the economics of the Eagle's Nest deposit on a
stand-alone basis;
-- To confirm the economics of the October 2010 Preliminary
Assessment on Eagle's Nest (the 'PA'); and
-- To address the technical and environmental challenges of
developing a mine in the McFaulds Lake region.
The PFS was based on recent metallurgical test work, revised mine
design, updated field work and review of site conditions. Based on the
revised design criteria and updated field work, the mine, process and
infrastructure designs were advanced to a level sufficient to allow
Micon to develop capital and operating cost estimates for the Project.
PROJECT DESCRIPTION:
The Project, as defined in the PFS, is summarized as:
-- 1.0 million tonne per year throughput rate;
-- Metallurgical recoveries based on recent test work;
-- 9.0 million tonnes of inferred resource was not included in the
mineral reserve;
-- Underground mining of the Eagle's Nest deposit;
-- All major mining facilities (including the mill) would be
located underground;
-- All tailings would be stored underground as cemented fill;
-- The existing winter road from Pickle Lake to Webequie would be
upgraded to an all-season road;
-- A diesel power plant would be located near Webequie and a
transmission line would provide power to the mine site;
-- A slurry pipeline would be used to transport concentrate from
site to a filter plant located near Webequie;
-- Initial mine production would be from an internal ramp; and
-- Production ramps will be developed after year three to access
the lower levels of the deposit.
As previously assumed in the PA, common mine infrastructure including
the all-season road, power lines, and construction winter roads would
benefit other companies and the local communities. The PFS economic
analysis assumes that 25% of the cost of the all season road, 50% of
the power line cost and 50% of the winter road cost are included in the
capital cost of the Project.
Micon also completed an economic analysis that confirmed that the
Project can support 100% of the related infrastructure costs. Under
this scenario, the Project demonstrated an after-tax NPV of $494
million (6% discount factor) and an after tax IRR of 19.2%.
The proposed Project minimizes surface disturbance and the Company's
environmental footprint. Aggregate will be sourced from waste rock
mined underground during mine development.
The submerged slurry pipeline and power transmission line will greatly
reduce traffic between Webequie and the Project site, eliminating the
need for all season road access. The Company believes that all
construction materials can be transported to site utilizing a winter
road network and critical spares can continue to be transported by air.
The cost estimate includes operating costs to operate the mine and
process plant, selling of a bulk concentrate, environmental monitoring
and management of the proposed operation. Closure costs are included in
the cash flow analysis. Of the estimated operating cost of $75-$80 per
tonne approximately 42% was attributed to underground mining,
approximately 42% attributed to on-site processing (including power
costs) and 16% related to general and administrative ('G&A').
Mine production was estimated based on a mining recovery rate of 95% of
the measured and indicated resource defined in Micon's technical report
titled 'Technical Report on the Updated Mineral Resource Estimate,
McFaulds Lake Project, James Bay Lowlands, Ontario, Canada' (effective
March 4. 2011). Mining dilution of 5% at zero grade was included in the
estimation of proven and probable reserves.
Metallurgical recoveries were based on recent test work, as described in
the Company's press release dated July 7, 2011.
The PFS did not include the 9.0 million tonnes of inferred resources
that have been identified at depth at Eagle's Nest. These inferred
resources represent a significant opportunity to increase the project
life and improve the economics, potential that would be unlocked
through an underground diamond drill program at a later date.
OPERATIONS UPDATE
The Company is currently completing its planned drill program targeting
resource growth at the Blackbird chromite discovery. Approximately 80%
of the planned 12,000 metre program has been completed to date. Two
drills continue to operate at Blackbird with the objective of
significantly increasing the global resource. Assay results form this
drill program are pending.
The Company continues to prioritize targets proximal to the Eagle's Nest
discovery with the intent of initiating a follow up drill campaign to
test the most promising targets once drilling of the Blackbird chromite
deposit is completed.
The Company is actively engaged in the public consultation process,
sponsoring a series of meetings at various First Nations communities in
the Ring of Fire area to review and discuss the Company's Project
Description.
The Company maintains a strong cash position and has sufficient funding
in place to complete the work planned for the fiscal year currently
underway.
FUTURE TECHNICAL STUDIES
The next phase of the Project will include finalizing the design
concepts and the project execution plan and producing a final
feasibility study sufficient to support debt financing for the Project.
The main items to address include:
-- Incorporate comments from the project review and consultation
program;
-- Negotiate Impact Benefit Agreements ('IBA') with the various
stakeholders;
-- Complete metallurgical test work including variability
analysis;
-- Incorporate design into an Environmental Assessment report;
-- Conduct various trade-off studies on:
o Slurry pipeline design and costs;
o Road construction design and costs; and
o Establishing grid power into site.
-- Establish business and out-sourcing opportunities based on the
IBA discussions;
-- Develop financing plan for shared infrastructure which will
include First Nation communities, Provincial and Federal
governments; and
-- Develop project financing plan for the mining project.
The NI 43-101 compliant PFS will be available on SEDAR and on the
Company's website within 45 days from the date hereof.
INDEPENDENT QUALITY CONTROL AND ANALYTICAL PROTOCOL
A thorough quality control program has been in effect for the McFaulds
Lake Project, which includes grouping samples into batches of 35 into
which are added 2 certified reference material standards. 2 field and
pulp duplicates also form part of the quality control program. It can
be said with confidence that all assays have passed the strict quality
control guidelines established by Noront's Qualified Person.
Activation Labs ('Actlabs)' of Ancaster, Ontario completed all the
assaying work. The samples submitted to Actlabs were analyzed for
multi-elements, including Ni and Cu using a four acid digestion and by
ICP analysis. The samples that received base metal values greater than
the upper limit for the method underwent further analysis using
ICP-OES. For the Au, Pd and Pt, the assay methodology was Fire Assay
on a 30 gram aliquot with an ICP finish. Silver was analyzed using a
3-acid digest with an ICP analysis. For more information on assay
methodology please visit the Actlabs website at http://www.actlabsint.com.
For further information on quality control and quality assurance and
data verification procedures please reference the Company's NI 43-101
compliant technical report 'Technical Report on the Updated Mineral
Resource Estimate, McFaulds Lake Project, James Bay Lowlands, Ontario,
Canada' (effective March 4. 2011) available on the Company's website
and at www.sedar.com.
The preparation of this press release has been supervised by Noront's
senior management including Mr. W. Hanson, P.Geo., President and CEO
and Mr. R. Gowans, P.Eng., Micon's Project Manager, both of whom are
Qualified Persons under Canadian Securities Administrators guidelines.
Note 1 Independent Consultants
The PFS was completed by Micon and included technical input from SNC
Lavalin, Cementation Ltd., Knight Piesold, Penguin ASI and Golder
Associates. The PFS was based on the proposed mining and processing of
the Eagle's Nest resource previously defined by Micon in a NI 43-101
compliant technical report entitled. 'Technical Report and Updated
Mineral Resource Estimate For The Eagle's Nest Property', dated
effective March 4, 2011 (the 'Eagle's Nest Resource Estimate'). For
further information on Eagle's Nest, please refer to the Eagle's Nest
Resource Estimate which is available on the Company's website and
SEDAR.
Note 2 Metal Price Assumptions:
The PFS economic analysis is based on the following metal prices derived
on a three year trailing average basis:
Nickel $8.62 per pound
Copper $3.08 per pound
Platinum $1,432 per ounce
Palladium $ 446 per ounce
Gold $1,130 per ounce
The PFS assumes a Canadian to US foreign exchange rate of 1.073.
About Noront: Noront Resources Ltd. is focused on its significant and multiple,
high-grade nickel-copper-platinum-palladium, chromite, gold and
vanadium discoveries in an area known as the 'Ring of Fire', an
emerging multi-metals district located in the James Bay Lowlands of
Ontario, Canada. Noront is the dominant land holder at the Ring of Fire
and continues to delineate and prove up its discoveries with NI 43-101
technical and economic reports and an aggressive and well financed
drill plan for 2010. All material information on Noront can be found on
the Company's website at www.norontresources.com or at SEDAR at www.sedar.com
Wesley (Wes) Hanson
President & Chief Executive Officer
FORWARD LOOKING STATEMENTS
This release contains 'forward-looking statements' within the meaning of applicable Canadian securities
legislation, including predictions, projections and forecasts.
Forward-looking statements include, but are not limited to, statements
that address activities, events or developments that the Company
expects or anticipates will or may occur in the future, including such
things as future business strategy, competitive strengths, goals,
expansion, growth of the Company's businesses, operations, plans and
with respect to exploration results, the timing and success of
exploration activities generally, permitting time lines, government
regulation of exploration and mining operations, environmental risks,
title disputes or claims, limitations on insurance coverage, timing and
possible outcome of any pending litigation and timing and results of
future resource estimates or future economic studies.
Often, but not always, forward-looking statements can be identified by
the use of words such as 'plans', 'planning', 'planned', 'expects' or
'looking forward', 'does not expect', 'continues', 'scheduled',
'estimates', 'forecasts', 'intends', 'potential', 'anticipates', 'does
not anticipate', or 'belief', or describes a 'goal', or variation of
such words and phrases or state that certain actions, events or results
'may', 'could', 'would', 'might' or 'will' be taken, occur or be
achieved.
Forward-looking statements are based on a number of material factors and
assumptions, including, the result of drilling and exploration
activities, that contracted parties provide goods and/or services on
the agreed timeframes, that equipment necessary for exploration is
available as scheduled and does not incur unforeseen break downs, that
no labour shortages or delays are incurred, that plant and equipment
function as specified, that no unusual geological or technical problems
occur, and that laboratory and other related services are available and
perform as contracted. Forward-looking statements involve known and
unknown risks, future events, conditions, uncertainties and other
factors which may cause the actual results, performance or achievements
to be materially different from any future results, prediction,
projection, forecast, performance or achievements expressed or implied
by the forward-looking statements. Such factors include, among others,
the interpretation and actual results of current exploration
activities; changes in project parameters as plans continue to be
refined; future prices of gold; possible variations in grade or
recovery rates; failure of equipment or processes to operate as
anticipated; the failure of contracted parties to perform; labour
disputes and other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of
exploration, as well as those factors disclosed in the Company's
publicly filed documents. Although Noront has attempted to identify
important factors that could cause actual actions, events or results to
differ materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results not to
be as anticipated, estimated or intended. There can be no assurance
that forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/August2011/23/c5698.html
Wes Hanson, President and CEO at (416) 367-1444, or visit Noront's website at: http://www.norontresources.com.