23rd Jul 2014 10:24
LONDON (Alliance News) - Minco PLC Wednesday filed a technical report on its Woodstock Manganese Property in Canada, which further highlights the positive economics of drilling for manganese at the site, following a released Preliminary Economic Assessment earlier in July.
Minco shares jumped 25.3% to 2.44 pence, making it top of the AIM All-Share risers on Wednesday.
The technical report, which was completed by Tetra Tech and Thibault & Associates Inc showed four key factors increasing the economic advantages of electrolytic manganese metal production on site.
It said the economic assessment shows low mining costs as its Plymouth deposit is amendable to low-cost open pit mining methods with low stripping ratios.
In addition, it said the manganese mineralisation on site is readily soluble by direct sulphuric acid leaching, removing the requirement for high-cost manganese reduction steps that are typical of manganese oxide processing.
The consultants said the Woodstock site will also have low operating costs, with its average operating costs strongly competitive to the industry's normal cost curve. It added that the 40-year project life at a base case feed rate of 3,000 tonnes per day allows for high returns on its initial capital investment and results in substantial life-of-project pre and post tax cumulative cash flows of CAD4.4B and CAD2.9B respectively.
"The ability to sustain profitability during economic downturns when commodity prices fall, or during times when operating costs rise is considered to be a strong asset to the project, owing to Woodstock's low operating costs," the report said.
The technical report added that a prefeasibility study should be completed on site to further define its potential and the company said an infill core drilling programme will now be required to upgrade its resources and a new resource estimate should be prepared after completion of a new drilling program.
Earlier in July, the preliminary economic assessment for the site indicated a pretax net present value of CAD846 million at 8% discount rate, and a pretax internal rate of return of 17.97% based on a 3,000 tonne per day operation. It showed a pre-production capital expenditure of CAD864 million, and an average annual payable production of approximately 80,000 tonnes of electrolytic manganese metal.
Minco said in the assessment that operating costs are expected to "be the lowest in the world", with an average USD0.64 per pound of electrolytic manganese metal produced over the first 20 years, and USD0.68 per pound over the life of the project.
On Wednesday, the company said the project is expected to create employment for 223 people during the mining period and 110 people thereafter, through its 40 year life.
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Minco PLC