Australia-based Magma Metals has released a preliminary economic assessment (PEA) of its Thunder Bay North platinum-palladium-copper-nickel project in Ontario, Canada.
The PEA says at current metals prices the project would generate an undiscounted pre-tax cash flow of C$360 million, with a 27% internal rate of return.
“The results of the Scoping Study clearly indicate that we have the basis for a robust project. There is also considerable upside potential to enhance the economics of the project, particularly by increasing the mineral resource available for mining and/or reducing the capital and operating costs for mineral processing” said Dr. Keith Watkins, Magma’s
Executive Chairman.
The open-pit mine would extract about 10 million tonnes of material at an average grade of 1.9g/t platinum-equivalent, or 1.5 million tonnes per year over the course of a seven-year mine life. The strip ratio is 8:3:1. Drilling in the Beaver Lake area is planned to evaluate the resource potential of a potential underground mine.
The open-pit resource comprises 8.460 million tonnes of indicated resources and 53,000 inferred, while the underground resource is estimated at 1.030 million tonnes indicated and 212,000 tonnes inferred.
The mine would produce platinum group metals (PGM) and gold bullion to be sent to a PGM refinery; silver for refining; copper briquettes; and a nickel-cobalt alloy. The metallurgy would involve a three-stage crushing, grinding and flotation process to extract the sulphides from the ore to produce a bulk concentrate. The bulk concentrate would then be treated using a hydrometallurgical process to produce a pregnant leach solution containing the dissolved metals.
Magma Metals is looking at C$207 million in capital costs to bring the mine into production, with total operating costs estimated at C$41.73 per milled tonne.
The PEA notes a considerable upside to the project through additional exploration:
“There is excellent potential for further discoveries and definition of additional resources in the 80km2 area of intrusive complexes around the currently defined mineral resource. There is significant potential therefore to increase the scale of the project going forward. A major exploration push is in progress in this area with three drill rigs active on site this winter. Approximately 40,000m of exploration diamond drilling has been budgeted for this calendar year.”
To learn more, read the company’s Feb. 7 news release.