New Brunswick
Advanced tungsten - molybdenum - copper resources.
Message: To sfield5 (test)
VANCOUVER, Nov. 16 /CNW Telbec/ - Geodex Minerals Ltd. (TSX-V: GXM), (the 'Company') is pleased to report receipt of an independent Preliminary Economic Assessment (PEA) for its 70%-owned Sisson Brook tungsten-molybdenum-copper deposit, located north of Fredericton, New Brunswick. The NI 43-101-compliant report was completed by Wardrop Engineering Inc. (Wardrop) in Vancouver with financial and operating estimates considered accurate to plus/minus 35%. The complete PEA report will be filed on SEDAR within one week. The PEA will be the first stage in increasingly more detailed studies as development on the project continues. A pre-feasibility assessment will continue from this point to be completed by the summer of 2008.
The PEA is based solely on the southern half of the Sisson Brook deposit, referred to as Zone III, which was partially drilled by Texasgulf/Kidd Creek Mines in the period from 1979 to 1982. This tungsten and molybdenum-dominant part of the large Sisson Brook mineralized system was defined by 7,053 m of diamond drilling in 2006 and an approximate 14,500 m of diamond drilling in 2007 (infill drilling not yet complete).
In October 2007, a Resource Estimate at five cut-of grades, as shown in the table below was prepared by Mercator Geological Services Limited (Mercator) of Dartmouth, Nova Scotia and details were released in a News Release of October 17, 2007. The resource estimate is categorized as being in the 'Inferred Category' as defined under Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves Definitions and Guidelines as amended by the CIM council in 2005. The estimate reflects a series of WO3% (ie tungsten trioxide)-equivalent cut-offs. This was done to help public understanding of the resource at this time, since approximately equal contributions are made to unit value by both tungsten and molybdenum. The conversion of molybdenum to its equivalent in WO3 was based on a factor of 2.97 to reflect averaged relative pricing of the two metals over the 37 month period beginning in January, 2004. Metallurgical and processing recoveries were assumed to be 100% for this conversion.
<<
Table 1 Mineral Resource Estimate for Sisson Brook Zone III -
October 17, 2007 Effective Date
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Resource Equivalent Tonnes Tonnes W03 % Mo % Equivalent
Category W03 % (Rounded) W03 %
Threshold millions
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Inferred 0.025 290,784,224 290.8 0.059 0.020 0.118
-------------------------------------------------------------------------
Inferred 0.075 214,997,356 215.0 0.069 0.024 0.140
-------------------------------------------------------------------------
Inferred 0.125 109,039,490 109.0 0.084 0.032 0.179
-------------------------------------------------------------------------
Inferred 0.175 43,440,318 43.4 0.100 0.043 0.227
-------------------------------------------------------------------------
Inferred 0.225 15,836,218 15.8 0.121 0.054 0.281
-------------------------------------------------------------------------
-------------------------------------------------------------------------
* Notes: Mo and WO3 values capped at 0.7% and 1.2% respectively; WO3
Equivalent = (WO3% + 2.97*Mo %)
Timing of the Resource Estimate did not allow it to include approximately
75% of the infill holes drilled in 2007 samples of which are in the process of
being prepared and assayed. Nor does it (or the PEA) reflect the
newly-discovered East Flank zone, located on the margin of Zone III, where
recent high-grade molybdenum assays were reported in a News Release of October
30, 2007. These additions, along with ongoing evaluation of drill results from
the tungsten-copper rich Zones I and II are anticipated to positively affect
future Resource Estimates for the property.
This PEA study should be considered preliminary in nature; it includes
inferred mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them to be
categorized as mineral reserves. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. There is no certainty
that this preliminary assessment will be realized.
PEA - Base Case Highlights.
Wardrop has advised that for the base case situation, metal prices and
exchange rates conforming to the SEC guidelines, basically a three-year
backward-rolling average, discounted a further 20%, be used. Therefore Base
Case = SEC Guidelines - 20%.
All dollars are Canadian unless otherwise stated.
Metal price basis
Molybdenum $US 21.60/lb
Tungsten $US 8.00/lb
Average Annual metal production
Molybdenum (lbs) 3.3 million
Tungsten (lbs) 8.1 million
Pre-Tax Payback (years) 2.7 years
Pre-Tax Internal Rate of Return Base Case 29.8%
Base case
-30% (in metal prices) 15.0%
Pre-tax Net Present Value Base Case $693 million
(8% discount rate) Base case
-30% (in metal prices) $186 million
Exchange Rate (US/C) 1.17
Annual Throughput (tonnes) 6.8 million
Grade to Process Plant (first ten years)
Molybdenum (Mo%) 0.026%
Tungsten (W03%) 0.081%
Strip Ratio (first ten years) 1.1:1
Milling Rate (tonnes/day) 20,000
Tungsten Recovery 70%
(Aggregate gravity/flotation)
Molybdenum Recovery 85%
Initial Capital Cost $353 million
(excludes working capital and environmental costs)
Operating Cost (first ten years) $9.16/tonne
Projected Mine Life 31 years
Infrastructure
The proposed open pit mine has good infrastructure such as permanent
roads, a nearby rail line and a power grid crossing the property. Small towns
such as Napadogan and Stanley are present to the north and east respectively
and there are many other small settlements at greater distance. The capital
city of Fredericton lies 100 km to the southeast and the port of Saint John on
the Bay of Fundy, the same distance south of it.
Mine Plan and Production
The PEA contemplates an open pit mine based on the inferred resource
tabulated above. A Surpac block model with Whittle pit optimization was used
to design the mine scheduling. Nominal mine throughput is 20,000 tonnes/day.
Operational constraints such as berms and access roads have not been included
at this level of detail.
The mine plan includes conceptual designs and layouts for the waste dumps,
roads and tailings impoundment.
Metallurgy
The design selected is based on general tungsten and molybdenum recovery
practices and principles. Mineralogical studies to date and a short
metallurgical test program last winter were scoping in nature but disclosed no
unfavourable aspects. A comprehensive study by SGS Lakefield Research Limited
on 2007 sample material is now underway.
Processing
The processing facilities will be designed to treat an annual plant feed
of 6.8 million tonnes per year of 343 working days.
Processing at this point involves delivery of ore into a dump pocket, four
stages of crushing and screening followed by rod mill grinding. After primary
sulphide conditioning and flotation, molybdenum is floated, cleaned and
bagged. A gravity circuit is then used to produce a tungsten concentrate.
Tungsten flotation follows regrinding of the gravity concentrate tailings and
secondary sulphide flotation.
Table 2. Capital Cost Estimates
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Area Description Amount
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Direct Costs
-------------------------------------------------------------------------
A Overall Site $5,699,360
B Mining $20,677,550
C Crushed Ore Storage and Reclaim $52,703,837
E Grinding and Flotation $105,317,610
F Tailings $24,027,710
G Site Services and Utilities $1,657,809
J Ancillary Buildings $7,441,595
K Plant Mobile Equipment $2,086,340
-------------------------------------------------------------------------
Indirect Costs
-------------------------------------------------------------------------
X Project Indirects $69,601,000
Y Owners Costs $5,000,000
Z Contingency (20%) $58,843,000
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Estimated Total $353,056,212
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Table 3. Operating Costs
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating Costs
-------------------------------------------------------------------------
-------------------------------------------------------------------------
$ Per Tonne $ Per Tonne
Material Mined Ore Milled *
Unit Mining Cost (CDN$/t) 1.30 2.74
Unit Processing Cost (CDN$/t ore) 5.33
G&A Cost (CDN$/t ore processed) 1.09
Total 9.16
-------------------------------------------------------------------------
-------------------------------------------------------------------------
* first ten years
Table 4. Pre-Tax NPV and IRR Summary
IRR & NPV Results @ 8% Discount Rate for Different Cases
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Case Molybdenum Tungsten Price NPV IRR
Price ($US/mtu) ($CDN) (%)
($US/lb)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Mo in Mo03 Flotation Gravity 000's
Concentrate Concentrate
W03 W03
-------------------------------------------------------------------------
Base Case 21.6 117.6 164.8 692,688 29.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three Year Average 27.0 146.9 205.6 1,118,238 40.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Current Price/
Exchange Rate 32.3 150.9 211.3 1,000,828 37.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
70% of Base Case 15.1 82.3 115.4 186,494 15.0
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>
Recommendations
Wardrop concludes that based on the parameters assumed in this Preliminary Economic Assessment, an open pit mine operating at 20,000 tpd would be profitable and a viable financial investment. The results are significantly robust to justify proceeding with studies at the preliminary feasibility level, the next stage of development.
All modelling, metallurgical, geotechnical, environmental, design and cost studies should be advanced to meet this end.
Qualified persons
Mr. Jack Marr, M.Sc., P.Geo., is the in-house Qualified Person for this project and Mr. Michael Cullen, P. Geo. is responsible for technical information specific to the Resource Estimate presented by Mercator Geological Services Ltd..
Mr. Andy Nichols, P.Eng., Chief Mining Engineer of Wardrop Engineering Inc. is the Qualified Person for matters relating to mine design and financial analysis. Mr. Andre De Ruijter, P.Eng., Senior Metallurgical Engineer of Wardrop Engineering Inc. is the Qualified Person for matters related to metallurgy and mineral processing.
Ownership
Geodex is proceeding to earn a 70% interest in the Sisson Brook property under the terms of a Letter Agreement dated October 25, 2004 with Champlain Resources Inc., a private Nova Scotia-based company. Geodex expects to be vested in December 2007 reflecting expenditure of the $2 million work commitment which is already exceeded. There are no attached royalties. The initial letter agreement was replaced by a full Option and Joint Venture Agreement on July 6, 2006, encompassing the terms of the LOA.
Forward Looking Statement
-------------------------
Certain information regarding the Company contained in this press release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, opinions, forecasts, projections or other statements that are not statements of fact. Although the Company believes that expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees.
On Behalf of the Board of Directors
-----------------------------------
GEODEX MINERALS LTD.
'Jack M. Maris'
Jack M. Maris,
President
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the accuracy or adequacy of this release.
For further information: Christopher R. Anderson, V.P Business Development, (604) 689-7771, Toll free 1-888-999-3500, info@geodexminerals.com; Visit our website at www.geodexminerals.com; Renmark Financial Communications Inc.: Neil Murray-Lyon, nmurraylyon@renmarkfinancial.com; Christine Stewart, cstewart@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial
The PEA is based solely on the southern half of the Sisson Brook deposit, referred to as Zone III, which was partially drilled by Texasgulf/Kidd Creek Mines in the period from 1979 to 1982. This tungsten and molybdenum-dominant part of the large Sisson Brook mineralized system was defined by 7,053 m of diamond drilling in 2006 and an approximate 14,500 m of diamond drilling in 2007 (infill drilling not yet complete).
In October 2007, a Resource Estimate at five cut-of grades, as shown in the table below was prepared by Mercator Geological Services Limited (Mercator) of Dartmouth, Nova Scotia and details were released in a News Release of October 17, 2007. The resource estimate is categorized as being in the 'Inferred Category' as defined under Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves Definitions and Guidelines as amended by the CIM council in 2005. The estimate reflects a series of WO3% (ie tungsten trioxide)-equivalent cut-offs. This was done to help public understanding of the resource at this time, since approximately equal contributions are made to unit value by both tungsten and molybdenum. The conversion of molybdenum to its equivalent in WO3 was based on a factor of 2.97 to reflect averaged relative pricing of the two metals over the 37 month period beginning in January, 2004. Metallurgical and processing recoveries were assumed to be 100% for this conversion.
<<
Table 1 Mineral Resource Estimate for Sisson Brook Zone III -
October 17, 2007 Effective Date
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Resource Equivalent Tonnes Tonnes W03 % Mo % Equivalent
Category W03 % (Rounded) W03 %
Threshold millions
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Inferred 0.025 290,784,224 290.8 0.059 0.020 0.118
-------------------------------------------------------------------------
Inferred 0.075 214,997,356 215.0 0.069 0.024 0.140
-------------------------------------------------------------------------
Inferred 0.125 109,039,490 109.0 0.084 0.032 0.179
-------------------------------------------------------------------------
Inferred 0.175 43,440,318 43.4 0.100 0.043 0.227
-------------------------------------------------------------------------
Inferred 0.225 15,836,218 15.8 0.121 0.054 0.281
-------------------------------------------------------------------------
-------------------------------------------------------------------------
* Notes: Mo and WO3 values capped at 0.7% and 1.2% respectively; WO3
Equivalent = (WO3% + 2.97*Mo %)
Timing of the Resource Estimate did not allow it to include approximately
75% of the infill holes drilled in 2007 samples of which are in the process of
being prepared and assayed. Nor does it (or the PEA) reflect the
newly-discovered East Flank zone, located on the margin of Zone III, where
recent high-grade molybdenum assays were reported in a News Release of October
30, 2007. These additions, along with ongoing evaluation of drill results from
the tungsten-copper rich Zones I and II are anticipated to positively affect
future Resource Estimates for the property.
This PEA study should be considered preliminary in nature; it includes
inferred mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them to be
categorized as mineral reserves. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. There is no certainty
that this preliminary assessment will be realized.
PEA - Base Case Highlights.
Wardrop has advised that for the base case situation, metal prices and
exchange rates conforming to the SEC guidelines, basically a three-year
backward-rolling average, discounted a further 20%, be used. Therefore Base
Case = SEC Guidelines - 20%.
All dollars are Canadian unless otherwise stated.
Metal price basis
Molybdenum $US 21.60/lb
Tungsten $US 8.00/lb
Average Annual metal production
Molybdenum (lbs) 3.3 million
Tungsten (lbs) 8.1 million
Pre-Tax Payback (years) 2.7 years
Pre-Tax Internal Rate of Return Base Case 29.8%
Base case
-30% (in metal prices) 15.0%
Pre-tax Net Present Value Base Case $693 million
(8% discount rate) Base case
-30% (in metal prices) $186 million
Exchange Rate (US/C) 1.17
Annual Throughput (tonnes) 6.8 million
Grade to Process Plant (first ten years)
Molybdenum (Mo%) 0.026%
Tungsten (W03%) 0.081%
Strip Ratio (first ten years) 1.1:1
Milling Rate (tonnes/day) 20,000
Tungsten Recovery 70%
(Aggregate gravity/flotation)
Molybdenum Recovery 85%
Initial Capital Cost $353 million
(excludes working capital and environmental costs)
Operating Cost (first ten years) $9.16/tonne
Projected Mine Life 31 years
Infrastructure
The proposed open pit mine has good infrastructure such as permanent
roads, a nearby rail line and a power grid crossing the property. Small towns
such as Napadogan and Stanley are present to the north and east respectively
and there are many other small settlements at greater distance. The capital
city of Fredericton lies 100 km to the southeast and the port of Saint John on
the Bay of Fundy, the same distance south of it.
Mine Plan and Production
The PEA contemplates an open pit mine based on the inferred resource
tabulated above. A Surpac block model with Whittle pit optimization was used
to design the mine scheduling. Nominal mine throughput is 20,000 tonnes/day.
Operational constraints such as berms and access roads have not been included
at this level of detail.
The mine plan includes conceptual designs and layouts for the waste dumps,
roads and tailings impoundment.
Metallurgy
The design selected is based on general tungsten and molybdenum recovery
practices and principles. Mineralogical studies to date and a short
metallurgical test program last winter were scoping in nature but disclosed no
unfavourable aspects. A comprehensive study by SGS Lakefield Research Limited
on 2007 sample material is now underway.
Processing
The processing facilities will be designed to treat an annual plant feed
of 6.8 million tonnes per year of 343 working days.
Processing at this point involves delivery of ore into a dump pocket, four
stages of crushing and screening followed by rod mill grinding. After primary
sulphide conditioning and flotation, molybdenum is floated, cleaned and
bagged. A gravity circuit is then used to produce a tungsten concentrate.
Tungsten flotation follows regrinding of the gravity concentrate tailings and
secondary sulphide flotation.
Table 2. Capital Cost Estimates
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Area Description Amount
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Direct Costs
-------------------------------------------------------------------------
A Overall Site $5,699,360
B Mining $20,677,550
C Crushed Ore Storage and Reclaim $52,703,837
E Grinding and Flotation $105,317,610
F Tailings $24,027,710
G Site Services and Utilities $1,657,809
J Ancillary Buildings $7,441,595
K Plant Mobile Equipment $2,086,340
-------------------------------------------------------------------------
Indirect Costs
-------------------------------------------------------------------------
X Project Indirects $69,601,000
Y Owners Costs $5,000,000
Z Contingency (20%) $58,843,000
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Estimated Total $353,056,212
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Table 3. Operating Costs
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating Costs
-------------------------------------------------------------------------
-------------------------------------------------------------------------
$ Per Tonne $ Per Tonne
Material Mined Ore Milled *
Unit Mining Cost (CDN$/t) 1.30 2.74
Unit Processing Cost (CDN$/t ore) 5.33
G&A Cost (CDN$/t ore processed) 1.09
Total 9.16
-------------------------------------------------------------------------
-------------------------------------------------------------------------
* first ten years
Table 4. Pre-Tax NPV and IRR Summary
IRR & NPV Results @ 8% Discount Rate for Different Cases
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Case Molybdenum Tungsten Price NPV IRR
Price ($US/mtu) ($CDN) (%)
($US/lb)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Mo in Mo03 Flotation Gravity 000's
Concentrate Concentrate
W03 W03
-------------------------------------------------------------------------
Base Case 21.6 117.6 164.8 692,688 29.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three Year Average 27.0 146.9 205.6 1,118,238 40.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Current Price/
Exchange Rate 32.3 150.9 211.3 1,000,828 37.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
70% of Base Case 15.1 82.3 115.4 186,494 15.0
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>
Recommendations
Wardrop concludes that based on the parameters assumed in this Preliminary Economic Assessment, an open pit mine operating at 20,000 tpd would be profitable and a viable financial investment. The results are significantly robust to justify proceeding with studies at the preliminary feasibility level, the next stage of development.
All modelling, metallurgical, geotechnical, environmental, design and cost studies should be advanced to meet this end.
Qualified persons
Mr. Jack Marr, M.Sc., P.Geo., is the in-house Qualified Person for this project and Mr. Michael Cullen, P. Geo. is responsible for technical information specific to the Resource Estimate presented by Mercator Geological Services Ltd..
Mr. Andy Nichols, P.Eng., Chief Mining Engineer of Wardrop Engineering Inc. is the Qualified Person for matters relating to mine design and financial analysis. Mr. Andre De Ruijter, P.Eng., Senior Metallurgical Engineer of Wardrop Engineering Inc. is the Qualified Person for matters related to metallurgy and mineral processing.
Ownership
Geodex is proceeding to earn a 70% interest in the Sisson Brook property under the terms of a Letter Agreement dated October 25, 2004 with Champlain Resources Inc., a private Nova Scotia-based company. Geodex expects to be vested in December 2007 reflecting expenditure of the $2 million work commitment which is already exceeded. There are no attached royalties. The initial letter agreement was replaced by a full Option and Joint Venture Agreement on July 6, 2006, encompassing the terms of the LOA.
Forward Looking Statement
-------------------------
Certain information regarding the Company contained in this press release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, opinions, forecasts, projections or other statements that are not statements of fact. Although the Company believes that expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees.
On Behalf of the Board of Directors
-----------------------------------
GEODEX MINERALS LTD.
'Jack M. Maris'
Jack M. Maris,
President
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the accuracy or adequacy of this release.
For further information: Christopher R. Anderson, V.P Business Development, (604) 689-7771, Toll free 1-888-999-3500, info@geodexminerals.com; Visit our website at www.geodexminerals.com; Renmark Financial Communications Inc.: Neil Murray-Lyon, nmurraylyon@renmarkfinancial.com; Christine Stewart, cstewart@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial
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