TIDMMAFL
RNS Number : 2360H
Mineral & Financial Invest. Limited
26 July 2023
MINERAL AND FINANCIAL INVESTMENTS LIMITED
Investment Update: Ascendant / Redcorp Announces Initial
Feasibility Study For The Venda Nova Deposit with a Post-Tax
Npv(@8%) of US$147 Million and a 39% IRR
Highlights
-- Post-tax NPV(8%) of US$147 million and 39% IRR at long term metal prices
-- Avg. annual payable zinc equivalent ("ZnEq") production of
124 million lbs. per annum over first 5 Yrs.
-- Average All-in Sustaining Cost ("AISC") of US$0.59/lb. ZnEq over first 5 years
-- Robust Average Free Cash flow of US$56 million per annum over the first 5 years
-- Upfront capex requirement of US$164 million (including US$12 million of contingency)
-- Inaugural NI 43-101 compliant Proven and Probable Reserves
(100% basis) in the North Zone of 7.0 Mt at 9.50% ZnEq and in the
South Zone Probable Reserves of 7.6 Mt grading 1.24% CuEq.
-- Updated NI 43-101 compliant Mineral Resource (100% basis) of:
-- North Zone: 8.9Mt at 10.52% ZnEq Measured and Indicated and
additional Inferred Resources of 0.5Mt at 6.62% ZnEq
-- South Zone: 10.0Mt at 1.22% Copper Equivalent ("CuEq") and
additional Inferred resources of 8.1 at 1.16% Cu Eq.
-- Fulfilled option requirement to deliver 80% indirect ownership in the Lagoa Salgada Project.
-- Metallurgy results confirm strong metal recoveries and saleable concentrates.
-- Optimization Programs commenced to enhance NPV, IRR and
operational efficiencies targeted for completion by year end.
Camana Bay, Cayman Islands - 26 July 2023 - Mineral and
Financial Investments Limited (LSE-AIM: MAFL) ("M&F", M&FI,
"MAFL" or the "Company") is pleased to announce results of its
initial NI 43-101 Feasibility Study ("FS") for its Lagoa Salgada
VMS Project in Portugal based upon an updated Mineral Reserves and
Resources Estimate. The completion of the FS completes Ascendant's
Option earn-in requirements to move project ownership to 80%,
subject to closing documentation with all other conditions having
previously been met.
The Feasibility Study was completed by QUADRANTE, a
multidisciplinary engineering and consulting company with more than
25 years' experience in Europe, Africa and the Americas. Mine
planning, design and engineering was undertaken by IGAN INGENIERÍA,
an independent consulting firm specializing in mine planning and
engineering for open pit and underground mining projects and
operations based in Spain. The DFS is based on the NI 43-101
Mineral Resource estimate completed by MICON International dated
May 31, 2023, and Mineral Reserves estimate completed by IGAN dated
16 June 2023. Golder Associates are currently engaged in a
comprehensive peer review of the entire report. The final FS report
will shortly be posted on Ascendant's site as well as M&F's and
SEDAR.com.
Jacques Vaillancourt, President & CEO of M&F Investments
stated, "We are very pleased that Ascendant have completed this
initial feasibility study for the Venda Nova deposit at Lagoa
Salgada. It is the first comprehensive study encompassing all areas
of operation required for the commercialization of Lagoa Salgada.
It will also result in Ascendant completing the earn-in to secure
an 80% interest in what is proving to be a robust project even at
this early stage. Lagoa Salgada remains a discovery project with
significant further upside potential expected as we optimize these
results and continue to expand the resource base. We believe the
results of the FS demonstrate a solid, economically robust project
for what has always been the initial development phase for the
larger potential we see for the Lagoa Salgada property. Given the
nature of VMS deposits to occur in clusters, especially in the
Iberian Pyrite Belt, we see evidence of potential for several more
deposits to be defined in the coming years to enhance the overall
value proposition at Lagoa. Furthermore, we expect these results to
support our current financing discussions and construction decision
in the coming months."
Lagoa Salgada Definitive Feasibility Study Units Value
Results (July 2023)
------------------------------------------------- -------------- ---------
Post-Tax NPV US$ Mlns $147.1
-------------- ---------
Post-Tax IRR % 39.3%
-------------- ---------
Payback Years 2.0
-------------- ---------
Mine Life Years 14.5
-------------- ---------
Initial Capital Costs - Including Contingency US$ Mlns $164.4
-------------- ---------
LoM Sustaining Capital Costs US$ Mlns $96.9
-------------- ---------
Closure Costs US$ Mlns $6.0
-------------- ---------
Average Zn. Equivalent Payable Production M. Lbs./Ann. 77.01
-------------- ---------
Total Zn. Equivalent Total Production M. Lbs. 1,155.15
-------------- ---------
C1 Cash Costs Zn. Equivalent (Co-Product) $/lb Zn.Eq. $0.67
-------------- ---------
All-In Sustaining Costs (AISC) - Zn. Equivalent
(Co-Production) $/lb Zn.Eq. $0.71
-------------- ---------
Optimization Opportunities
The completion of FS completes the requirements by Ascendant to
Earn an 80% ownership in the project as required under the Option
Earn In agreement. The Company believes that with additional time
now available, the following near term optimization opportunities
exist to further enhance the FS prior to commencing development
work over the next six months. The Company's initial focus will be
as follows:
-- Optimize mine ore sequencing to maximize revenues in the initial years.
-- Optimization of the mining and processing rate to optimize NPV and IRR.
-- Undertake further metallurgical test work to enhance metal
recoveries above those already achieved in tests to date.
Project Overview
The Lagoa Salgada Project is located within the north-western
section of the prolific Iberian Pyrite Belt ("IBP") in Portugal,
approximately 80km southeast of Lisbon, accessible by national
highways and existing roads. The Project is comprised of a single
exploration permit covering an area of approximately 7,209
hectares. The Project represents a high-grade, polymetallic
zinc-lead-copper development and exploration opportunity in a low
risk, established and prolific jurisdiction where the project has
been accorded a Project of National Interest ("PIN") status.
Figure 1. Project Location
Updated Minerals Reserves and Resources Estimate
Table 1. below outlines the initial NI 43-101 Proven and
Probable Mineral Reserves Estimate prepared by Micon International
Limited ("Micon") upon which the FS was based, and Table 2 provides
the updated total Mineral Resource Estimate currently identified
for the Lagoa Salgada project to date. Infill drilling in 2022
focused on upgrading sufficient high-grade mineralization in the
North Zone and part of the mineralization in South Zone to the
Measured and Indicated categories to support the completion of the
FS as required by the Earn In agreement.
Future drilling is expected to add additional Resources as the
project moves forward to extend the overall mine life and it should
be noted both the North and South zones remain open to future
expansion along strike and at depth for future exploration. In
addition, several regional exploration targets have been identified
for future exploration work aiming to further increase the known
mineral resources on the property, which should extend the overall
mine life and/or potentially support a future expansion.
Proven and Probable Reserves are estimated at 14.6Mt with 7.0Mt
at a grade of 9.50% ZnEq in the North Zone and 7.6Mt at a grade of
1.24% CuEq in the South Zone, sufficient to support an initial mine
life of 14+ years based upon a throughput rate of 1.2Mtpa through
the plant as outlined in the FS. Reserves were defined using an NSR
calculation based upon current metallurgical recoveries, payability
and treatment charges and mining methods.
The project has converted 77% of its Measured and Indicated
resources into reserves, additionally there are 0.5Mt at a grade of
6.62% ZnEq in the North Zone and 8.13Mt at a grade of 1.16% CuEq in
the South Zone of Inferred Resource. Additional drilling is
required to upgrade these additional resources to the Measured and
Indicated categories.
Gross Attributable Mineral Reserves
Note: the operator is Ascendant Resources Limited
Table 1: Mineral Reserves (100%)
Zone Reserve Mass NSR Cu Pb Zn Sn Ag Au
Category (kt) ($/t) (%) (%) (%) (%) (ppm) (ppm)
------- ----------- ------- ------- ----- ----- ----- ----- ------- -------
North Proven 2,100 89.6 0.26 2.80 3.20 0.15 62 0.75
----------- ------- ------- ----- ----- ----- ----- ------- -------
Probable 4,900 81.7 0.34 2.30 2.10 0.14 63 0.74
------------------- ------- ------- ----- ----- ----- ----- ------- -------
Total 7,000 84.1 0.32 2.45 2.43 0.14 63 0.74
------------------- ------- ------- ----- ----- ----- ----- ------- -------
South Proven
----------- ------- ------- ----- ----- ----- ----- ------- -------
Probable 7,600 49.6 0.41 0.41 1.30 0.00 15 0.05
------------------- ------- ------- ----- ----- ----- ----- ------- -------
Total 7,600 49.6 0.41 0.41 1.30 0.00 15 0.054
------------------- ------- ------- ----- ----- ----- ----- ------- -------
Total Proven 2,100 89.6 0.26 0.26 3.20 0.15 62 0.75
----------- ------- ------- ----- ----- ----- ----- ------- -------
Probable 12,500 62.2 0.38 0.38 1.61 0.05 34 0.32
------------------- ------- ------- ----- ----- ----- ----- ------- -------
Total 14,600 66.1 0.36 0.36 1.84 0.07 38 0.38
------------------- ------- ------- ----- ----- ----- ----- ------- -------
Table 2-A: Mineral Resources (Inclusive of Reserves - 100%)
Deposit Domain Category Density NSR-MRE NSR-MRE Ag
Mass Zn Pb Cu Sn Ag Au ZnEq Zn Pb Cu Sn Au
--------- -------- ----------- -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
g/cm(3) Mt S/t % % % % g/t g/t % $m kt kt kt kt koz koz
--------- -------- ----------- -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
P1&P2
Gos Indicated 2.96 1.89 109.0 0.46 2.51 0.1 0.26 44.4 0.86 8.38 206.2 8.8 47.4 1.9 4.8 2,700.1 52.5
-------- --------------------- -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
Inferred 2.56 0.35 81.1 0.42 1.67 0.1 0.1 36.9 0.79 5.77 28.6 1.5 5.9 0.4 0.4 418.2 9.0
------------------------------ -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
P1&P2
tMS Indicated 4.06 0.92 107.7 0.25 2.47 1.08 0.2 121.6 1.24 13.27 98.9 2.3 22.7 9.9 1.8 3,591.2 36.5
-------- --------------------- -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
Inferred 3.74 0.07 75.6 0.27 2.12 0.84 0.14 74.3 1.41 10.74 5.6 0.2 1.6 0.6 0.1 177.7 3.4
------------------------------ -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
P1&P2
North pMS Indicated 4.44 5.46 143.7 3.79 2.9 0.28 0.13 66.5 0.72 11.58 784.1 206.8 158.3 15.0 7.1 11,677.1 125.6
--------- -------- ----------- -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
Inferred 4.81 0.06 88.7 2.78 1.47 0.11 0.07 33.6 0.4 6.73 5.2 1.6 0.9 0.1 0.0 62.9 0.7
------------------------------ -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
P1&P2
str Indicated 2.91 0.63 45.0 0.75 0.24 0.48 0.08 22.1 0.06 3.82 28.5 4.8 1.5 3.0 0.5 450.8 1.2
-------- --------------------- -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
Inferred 2.83 0.01 44.8 0.58 0.38 0.46 0.13 29.4 0.2 4.75 0.3 0.0 0.0 0.0 0.0 7.2 0.0
------------------------------ -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
P1&P2
North Total Indicated 3.85 8.9 125.6 2.50 2.58 0.34 0.16 64.4 0.75 10.52 1,117.7 222.7 229.8 29.9 14.3 18,419.3 215.8
--------- -------- ----------- -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
Inferred 2.86 0.49 80.6 0.68 1.70 0.22 0.11 42.0 0.83 6.62 39.7 3.3 8.4 1.1 0.5 666.0 13.1
------------------------------ -------- ------ -------- ------ ------ ------ ------ ------- ------ ------- -------- ------- ------- ------ ------ --------- -------
Notes to Table 2-A
1. Mineral resources unlike mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources
may be materially affected by environmental, permitting, legal,
title, taxation, socio-political, marketing, or other relevant
issues.
2. The mineral resources have been estimated in accordance with
the CIM Best Practice Guidelines (2019) and the CIM Definition
Standards (2014). Coherent and contiguous mining shapes backing
reasonable prospect for economic extraction were considered.
3. Mineralized Zones: Gos=Gossan, tMS= transition massive
sulphides pMS= primary massive sulphides, Str=Stringer, FR=
-Fissural Remobilizations
4. ZnEq% = ((Zn Grade*26.46)+(Pb Grade*22.05)+(Cu Grade *
77.16)+(Au Grade*54.66)+(Ag Grade*0.71)+(Sn Grade *
164.55))/26.46.
5. Metal Prices: Cu $7,716/t, Zn $2,646/t, Pb $2,205/t, Au
$1,700/oz, Ag $22.00/oz, Sn $26,455/t.
a. Gos= ((Sn%*0.40)*Sn$)+((Pb%*0.20)*Pb$)+((Au ppm*0.91)*Au$)+((Ag ppm*0.89)* Ag$)
b. tMS= ((Sn%*0.40)*Sn$)+((Pb%*0.50)*Pb$)+((Ag ppm*0.65)* Ag$)+((Zn% *0.5)*Zn$)
c. pMS= ((Sn%*0.40)*Sn$)+((Pb%*0.60)*Pb$)+((Ag ppm*0.45)* Ag$)+((Zn%*0.70)*Zn$)
d. str= ((Cu%*0.60)*Cu$)+((Pb%*0.5)*Pb$)+((Ag ppm*0.4)* Ag$)+((Zn%*0.70)*Zn$)
6. NSR-MRE cut-off: Gos= $48.24, tMS= $46.54, pMS= $41.06, str= $37.83
Table 2-B: Mineral Resources (Inclusive of Reserves - 100%)
Deposit Domain Category Density Ag
Mass NSR-MRE Cu Zn Pb Ag Au CuEq NSR-MRE Cu Zn Pb Au
--------- -------- ----------- -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
g/cm(3) Mt S/t % % % g/t g/t % $m kt kt kt koz koz
--------- -------- ----------- -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
C1
FR Indicated 2.89 6.43 63.30 0.40 1.26 0.75 13.13 0.07 1.21 407.0 25.5 81.2 48.2 2,715.4 13.7
-------- --------------------- -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
Inferred 3.6 0.83 50.40 0.61 0.47 0.23 12.26 0.13 1.04 42.1 5.1 3.9 1.9 329.0 3.4
------------------------------ -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
C2
FR Indicated 2.86 2.5 67.50 0.50 1.23 0.64 15.58 0.04 1.28 168.5 12.4 30.8 16.0 1,251.4 3.6
-------- --------------------- -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
South Inferred 3.01 3.66 62.00 0.54 0.96 0.42 17.32 0.08 1.2 226.6 19.6 35.0 15.5 2,036.7 9.6
------------------- ---------- -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
C3
FR Indicated 2.85 1.11 62.50 0.39 1.17 0.54 20.77 0.04 1.16 69.2 4.3 13.0 6.0 740.0 1.3
-------- --------------------- -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
Inferred 3.07 3.64 60.10 0.67 0.69 0.22 16.62 0.04 1.16 218.7 24.5 25.1 7.9 1,943.9 5.3
------------------------------ -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
South Total Indicated 2.88 10.04 64.20 0.42 1.24 0.70 14.58 0.06 1.22 644.7 42.2 124.9 70.2 4,706.8 18.6
--------- -------- ----------- -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
Inferred 3.04 8.13 59.90 0.60 0.79 0.31 16.49 0.07 1.16 487.4 49.1 64.0 25.3 4,309.5 18.3
------------------------------ -------- ------- -------- ------ ------ ------ ------- ------ ------ -------- ------ ------- ------ -------- ------
Notes to Table 2-B
1. Mineral resources unlike mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources
may be materially affected by environmental, permitting, legal,
title, taxation, socio-political, marketing, or other relevant
issues.
2. The mineral resources have been estimated in accordance with
the CIM Best Practice Guidelines (2019) and the CIM Definition
Standards (2014). Coherent and contiguous mining shapes backing
reasonable prospect for economic extraction were considered.
3. Mineralized Zones: Gos=Gossan, tMS= transition massive
sulphides pMS= primary massive sulphides, Str=Stringer, FR=
-Fissural Remobilizations.
4. CuEq% = ((Zn Grade*26.46)+(Pb Grade*22.05)+(Cu Grade *
77.16)+(Au Grade*54.66)+(Ag Grade*0.71)+(Sn Grade *
164.55))/77.16.
5. Metal Prices: Cu $7,716/t, Zn $2,646/t, Pb $2,205/t, Au
$1,700/oz, Ag $22.00/oz, Sn $26,455/t.
6. NSR-MRE: South Deposit=
((Cu%*0.65)*Cu$)+((Zn%*0.75)*Zn$)+((Pb%*0.65)*Pb$)+((Au
ppm*0.05)*Au$)+((Ag ppm*0.80)*Ag$)
7. NSR-MRE cut-off: South Deposit= $37.83
Net Attributable Mineral Reserves
Note: the operator is Ascendant Resources Limited
MAFL hold between 5% and 20% interest in the Lagoa Salgada
project as previously disclosed, due to ongoing contractual
negotiations. The details of this are set out the end of this
announcement.
Mining
In line with previous studies, the mine is designed using a
single access ramp from surface and will target the extraction of
ore from the North and South Zones at a rate of 1.2 million tonnes
per annum ("Mtpa").
Mining will be undertaken by targeting the various sub domains
within the ore deposit to maximize metallurgical recovery. As with
most VMS type deposits, the sub domains reflect a precious metal
rich gossan layer above a Massive Sulphide layer (further divided
into a Transition and Primary layer) and a layer of stockwork
mineralization each with its own metallurgical characteristics. The
mining methods defined are a combination of transverse sublevel
stoping and cut & fill. Paste backfill is to be used for both
mining methods to maximize ore recovery and productivity while
minimizing surface tailing disposition. The initial years will
focus on mining the higher-grade gossan and massive sulphide zones
in the North Zone, followed by the South Zone as underground access
is developed in the early years of the operation to the South zone.
Mining will be conducted using an owner operated electric fleet
which will reduce operating costs.
Figure 2. Underground Mine Design
(In blue the main ramps and accesses and in green and violet the
ore blocks to be mined)
Metallurgy
Metallurgical testwork was completed by Grinding Solutions
("GSL") in Cornwall, UK. Confirmatory testwork was developed by
Maelgwyn Mineral Services Africa to confirm metal recoveries and
saleable concentrates have been achieved. Further testing is
expected improve on current results as fully optimized reagents
requirements are developed. The Company notes that its consultants
have indicated that the actual performance of operating mines in
the region have typically seen an improvement in mined head grade
and/or recoveries once an industrial scale operation is in
production as compared to lab testing.
The approach to flowsheet development was to prepare
representative master composites for each ore type, then proceed
through open circuit to identify and optimize flowsheet conditions
and reagent schemes. Locked cycle tests were then conducted on
master composites to demonstrate the anticipated overall
metallurgical performance within a continuous circuit.
Tests were completed on blends of Primary Massive Sulphide
(PMS), Stockwork (STW), Gossan (GO), Transition Massive Sulphide
(TMS) and Stringer (STR) ores to allow comparison with individual
composite results and to assess the viability of co--processing the
ore types.
Mineralogical assessments were undertaken to provide information
to refine the comminution/beneficiation process during
optimization, and to provide reasonable expectations for
metallurgical performance versus mineral liberation and association
within each ore type. Samples from various open and locked cycle
test products were used to characterize final concentrates and
tailings.
The developed metallurgical models were applied to mine
production schedules as part of the financial modelling process.
The resulting average recoveries over the life of the mine (LOM)
are presented in the table below:
Table 3. Achieved Recoveries by Metal and Domain
Mine Reserve Cu Pb Zn Ag Au Sn
Domain
-------------- ---- ---- ---- ---- ---- ----
Gossan - 20% - 89% 91% 40%
---- ---- ---- ---- ---- ----
TMS 30% 50% 50% 65% - 40%
---- ---- ---- ---- ---- ----
Stringer 60% 50% 70% 15% - -
---- ---- ---- ---- ---- ----
PMS 30% 60% 70% 30% 10% 40%
---- ---- ---- ---- ---- ----
STWK 65% 65% 75% 15% 5% -
---- ---- ---- ---- ---- ----
Table 4 below highlights the concentrate grade profile as
determined by the various metallurgical testwork. These results are
largely in line with other regional producers. The Project will
produce four concentrates, namely Zinc, Lead, Copper, and a Tin
concentrate.
Table 4. Concentrate Technical Specifications
Concentrate Zinc (%) Lead (%) Copper Tin (%) Gold (ppm) Silver
(%) (ppm)
------------- --------- --------- -------- -------- ----------- ----------
Zinc 3545 - - - 280 1252,500
--------- --------- -------- -------- ----------- ----------
Lead - 3035 1.52.5 - 1.525 3002,300
--------- --------- -------- -------- ----------- ----------
Copper 1.5 0.51.5 20 - - 150200
--------- --------- -------- -------- ----------- ----------
Tin - 212 - 50 - -
--------- --------- -------- -------- ----------- ----------
Processing
The mineral treatment plant is based on industry standard
methods for mineral concentrating, comprising of crushing,
grinding, and flotation processes to produce various concentrates
of copper, lead, zinc, tin and Au/Ag dore bars. The process areas
are tailored to the specific mineral domains being processed.
The mined material goes through a grizzly feeder and primary jaw
crusher, and then onto to a grinding circuit which consists of a
SAG mill, ball mill, and vertical mill in closed circuit with
hydrocyclones. The material is discharged onto a vibrating screen,
with rejected pebbles recirculated to a pebble crusher.
The copper and lead flotation circuit includes aeration and
conditioning tanks, rougher cells, regrinding mill, and cleaning
stages. The circuit can produce bulk or separate Cu and Pb
concentrates depending on the mineral domain. The zinc flotation
circuit consists of conditioning tanks, rougher cells, regrinding
mill, and cleaning stages. Except for Fresh Massive Sulphide, only
the rougher and cleaner circuit is used.
The sulphide flotation circuit removes sulphides before
concentrating tin minerals. It includes conditioning tanks, rougher
cells, and cleaner stages. Rougher tailings flow to the next area,
while the concentrate is pumped to the tailings management area.
The flotation circuit combines flotation and gravimetric
concentration technologies. It includes conditioner and aeration
tanks, rougher and cleaner stages. The intermediate tin concentrate
is further processed using multi-gravity separators to increase tin
content. A summary Flowsheet is provided below.
Figure 3. Simplified Process Flow Diagram
Infrastructure
The Lagoa Salgada Project will be developed on a greenfield site
located in close proximity to Grândola municipality in the Setúbal
district, which benefits from well-established infrastructure
including road and rail transport, power, and water supply
services. Transportation of supplies will be facilitated by trucks
from Portugal or Spanish locations, while concentrate products will
initially be shipped to the Sines port by road and subsequently by
ship to final destinations.
Figure 4 Site Layout
The project site will have a compact layout that incorporates
essential components such as the tailings storage facility, ore and
waste dumps, water treatment infrastructure, and various buildings
including administration, warehouse, laboratory, gatehouse, and
mobile equipment workshop. The processing facilities will consist
of a primary crusher building, ore stockpiles on the ROM pad, a
mill building, and a paste plant building.
The mine will be accessed via a portal and the ore will be
brought to the surface and stored as stockpiles, while waste
stockpiles will be utilized for constructing the embankments of the
Tailings Storage Facility.
The mine plan outlines the processing of 14.8 Mt of ore and the
generation of 1.9 Mt of waste rock. After accounting for
concentrate and underground backfill, a total of 11.3 Mt of
tailings, along with 1.0 Mt of development rock, will be deposited
in the TSF.
Capital Costs
Upfront capital costs are estimated at US$164 million inclusive
of US$12 million in contingency or approximately 10%. A further
US$102.9 million of sustaining capital is planned over the
14.5-year mine life, including closure costs. Pay back is in the
order of 2 years with an after-tax IRR of 39%.
Table 5. Capital Costs
Capital Costs Unit Value
------------------------ ------------ -----------
Support Infrastructure USD (,000) $18,505
------------ -----------
Tailings Storages
Facility USD (,000) $5,543
------------ -----------
Pastefill Plant USD (,000) $5,300
------------ -----------
Process Plant USD (,000) $67,525
------------ -----------
Underground Capital USD (,000) $17,002
------------ -----------
Mobile Equipment USD (,000) $24,906
------------ -----------
External Connections USD (,000) $3,924
------------ -----------
Box Cut USD (,000) $1,324
------------ -----------
D&F USD (,000) $5,522.7
------------ -----------
LHOS Stopping USD (,000) $2,823.6
------------ -----------
Initial Capital USD (,000) $152,446.1
------------ -----------
Contingency USD (,000) $11,919.4
------------ -----------
Total Initial Capital USD (,000) $164,365.5
------------ -----------
LoM Sustaining Capital USD (,000) $96,889.3
------------ -----------
Closure Costs USD (,000) $6,000.0
------------ -----------
Total Capital USD (,000) $267,254.8
------------ -----------
Operating Costs
Operating costs are summarized in Table 6 below. All costs are
based on a mining rate of 1.2Mtpa and relied on recent quotes from
various vendors and are similar to other mines in the region. On a
zinc equivalent per pound basis, Life of Mine C1 Cash Costs are
estimated at US$0.67/lb and US$0.71/lb on an all-in sustaining cost
basis over the life of mine.
Table 6. Operating Costs
Operating Costs Unit Value
------------------------------ ------- ------
Mining Costs
------- ------
D&F USD/t 25.24
------- ------
LHOS Stopping USD/t 17.72
------- ------
Processing Costs
------- ------
GOS - Gossan USD/t 15.58
------- ------
TMS - Transition Massive
Sulphide USD/t 13.71
------- ------
PMS - Fresh Massive Sulphide USD/t 18.72
------- ------
Stringer USD/t 15.37
------- ------
Stock Work USD/t 15.37
------- ------
G&A Costs USD/t
------- ------
G&A Unit Costs USD/t 2.00
------- ------
Production and Operating Cost Profile
The chart below highlights the expected production and AISC
profile at Venda Nova as per the FS. Production and cash flows are
expected to be stronger in the early years as the processing of the
higher-grade massive sulphide and gossan material is
undertaken.
Production over the mine life is expected to average 77 million
lbs. of Zinc equivalent production per year but averages
approximately 124 million lbs. of Zinc equivalent production over
the first five years. Similarly, AISC will average US$0.71/lb. per
year and US$0.59/lb. over the first five years on a ZnEq basis.
Figure 5. Production and AISC
Overall Project Economics
The Venda Nova project at Lagoa Salgada shows strong robust
economics with a Post-Tax after tax NPV at 8% discount rate of
US$147 million and IRR of 39% for a payback period of 2 years at
long term consensus metal price assumptions. Project economics are
based on the current Proven and Probable Reserves only for a mine
life of 14.5 years and does not factor in the upgrading of
additional resources or potential future exploration success.
Table 7 Economic Summary
Project Economic Summary Unit Value
------------------------------------ ------------ ----------
NPV (8%) Pre-Tax US$ Mln. $189
------------ ----------
IRR Pre-Tax % 47%
------------ ----------
NPV (8%) Post-Tax US$ Mln. $147
------------ ----------
IRR Post-Tax % 39.3%
------------ ----------
LoM Avg. Zinc Production Mln. / Lbs 77.0
------------ ----------
LoM Zinc Concentrate Production Tonnes 491,364.0
------------ ----------
LoM Copper Concentrate Production Tonnes 108,110.1
------------ ----------
LoM Lead Concentrate Production Tonnes 374,860.9
------------ ----------
LoM Tin Concentrate Production Tonnes 17,573.9
------------ ----------
LoM Ag-Au Concentrate Production Tonnes 183.7
------------ ----------
LoM AISC (Including Closure Costs) US$/lb. 0.7
------------ ----------
Payback Years 2.0
------------ ----------
Zinc Price Assumption US$/lb. 1.2
------------ ----------
Copper Price Assumption US$/lb. 3.8
------------ ----------
Lead Price Assumption US$/lb. 1.1
------------ ----------
Tin Price Assumption US$/lb. 15.0
------------ ----------
Gold Price Assumption US$/oz 1700.0
------------ ----------
Silver Price Assumption US$/oz 22.5
------------ ----------
The mine is expected to benefit from regional tax incentives in
Portugal. Contractual fiscal incentives for productive investment
in Portugal offers a validity period of up to 10 years for
investment projects with relevant expenditures amounting to
EUR3,000,000 or more. The fiscal benefit corresponds to 10% of the
project's relevant expenditures, and this rate can be increased
based on factors like the location of the project and the creation
of jobs. The benefit takes the form of a tax credit deducted from
the corporate income tax liability. Additionally, there are
provisions for exemptions or reductions in municipal property tax,
property transfer tax, and stamp duty.
These contractual fiscal incentives aim to attract productive
investments, boost economic growth, create employment
opportunities, and support strategic sectors in Portugal. The
incentives provide companies with tax benefits, such as tax
credits, deductions, and exemptions, encouraging investment in
various sectors and regions.
In the case of Lagoa Salgada, the maximum tax benefit is
determined by considering the lower value between EUR24.75 million
(Maximum regional aid intensity applicable) or 15% of the initial
investment. The application method for this incentive involves a
50% reduction in income tax (equivalent to 21% of the taxable
income) until the maximum amount of tax benefit is attained.
The chart below demonstrates the robust free cash flow
generation expected, especially in the first five years of
operation. Cash flows during the first five years of production are
estimated to average US$56 million per annum.
Figure 6. Free Cash Flow
The chart below highlights the NPV sensitivity to changes in
capital costs, various input costs and Zinc price assumptions.
Figure 7. NPV Sensitivity
Optimization Opportunities
The completion of Feasibility study completes the requirements
by Ascendant to Earn an 80% ownership in the project as required
under the Option Earn-In agreement. The Company believes that with
additional time now available, the following near term optimization
opportunities exist to further enhance the FS prior to commencing
development work over the next six months. The Company's initial
focus will be as follows:
-- Optimize mine ore sequencing to maximize revenues in the initial years.
-- Optimization of the mining and processing rate to optimize NPV and IRR;
-- Undertake further metallurgical testwork on available
material to enhance metal recoveries above those already achieved
in tests to date
On a longer-term basis, the company has identified additional
areas to further increase the value of the Lagao Salgada project
such as;
-- Subject to new fresh drill core being available additional
metallurgical testwork could be undertaken to continue to enhance
recoveries
-- Increase mineral reserves and resources to enhance the mine
life or support a larger scale operation via upgrading additional
known resources to the Proven and Probable categories and through
new exploration to define additional resources on the numerous
follow up targets known on the property.
Venda Nova Initial Feasibility Study for Ascendant and Redcorp -
Qualified Persons
An NI 43-101 Technical Report supporting the DFS is being
prepared by Quadrante under the guidance of Mr. João Horta (M.Sc.,
MIMMM), who serves as Project Director at QUADRANTE and is a
"Qualified Person" in accordance with National Instrument 43-101 -
Standards of Disclosure for Mineral Projects. Although the
Qualified Person was not responsible for the completion of some of
the sections of the DFS, such as Geology, Mineral Processing and
Metallurgical, Mineral Resource, Reserve, Mining Methods, Recovery
Methods, TSF, Paste Fill, and Hydrogeological Study, the Qualified
Person at Quadrante has relied on the Qualified Persons listed
below who are the specialists in these fields for completion of
their respective portions of the DFS.
The scientific and technical information contained in this
release relating to the Geology and Mineral Resource Estimate has
been approved and verified by Mr. Charley Murahwi (Msc, P.Geo.,
FAusIMM), Senior Economic Geologist with Micon International
Limited, who is a "Qualified Person" in accordance with National
Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Sampling, analytical, and test data underlying the Mineral Resource
Estimate was also approved and verified by Mr. Charley Murahwi.
The Mineral Reserve calculation and the Mining Methods section
was completed by IGAN Ingenieria under the supervision of Mr. Pablo
Gancedo Mínguez (CEng, MIMMM), who is a "Qualified Person" in
accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects.
The Tailings Storage Facility (TSF) study was completed by SLR
under the supervision of Mr. David Ritchie (P.Eng, Principal
Geotechnical Engineer at SLR), who is a "Qualified Person" in
accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects.
Scientific and technical information contained in this release
in relation to metallurgical test work and the Recovery Methods
section has been approved and verified by Mr. David Castro López
(MIMMM), who serves as Process Engineer at Minepro Solutions and is
a "Qualified Person" in accordance with National Instrument 43-101
- Standards of Disclosure for Mineral Projects.
The Hydrogeological Study was completed by Dr. Rafael Fernández
Rubio (PhD, Specialist), which is a Special Consultant at FRASA and
is a "Qualified Person" in accordance with National Instrument
43-101 - Standards of Disclosure for Mineral Projects.
The Paste Fill study was completed by Mr. Frank Palkovits
(P.Eng, B.Eng), Pastefill Specialist at RMS and a "Qualified
Person" in accordance with National Instrument 43-101 - Standards
of Disclosure for Mineral Projects.
Review of Technical Information
The scientific and technical information in this press release
has been reviewed and approved by Joao Barros, BSc (Engineering),
MSc (Geology), who has more than 17 years of relevant experience in
the field of activity concerned. Mr. Barros is a Member of the
Portuguese Engineers Association. Mr. Barros is employed by Redcorp
Empreedimentos Mineiros, Lda., a 50% owned subsidiary of M&FI,
and has consented to the inclusion of the material in the form and
context in which it appears.
Summary of ownership of Redcorp and Lagoa Salgada Project
With the formal delivery of this Feasibility Study Ascendant
will have satisfied its obligation under the Earn-In Agreement to
increase its ownership to 80% of Redcorp, subject to closing
documentation, all other conditions being met. Redcorp currently
owns 85% of the Lagoa Salgada project. In June 2017, Redcorp, then
owned 100% by M&F, entered into an agreement with Empresa
Desenvolvimento Mineiro SA (EDM), a Portuguese state-owned company
to purchase the remaining 15%, which would have resulted in Redcorp
owning 100% interest in the project ("2017 Agreement"). However, as
previously announced, the 2017 Agreement was subject to Portuguese
Secretary of State approval, which has not been received. Redcorp
and M&FI continue to pursue the completion of this acquisition,
with no certainty of success.
As part of the agreements with Ascendant, M&F has granted
call options to Ascendant for nil consideration over 12% of the
ordinary shares in Redcorp held by M&F ("Call Options") so that
in the event that Redcorp/M&F is unsuccessful in obtaining the
completion of the 2017 Agreement, Ascendant will be assured of a
net 80% interest in the Lagoa Salgada Project. However, if
Redcorp/M&FI can secure 100% ownership of Lagoa Salgada then
the Call Options are cancelled. The Call Options can be exercised
on the date being 6 months after the date on which Ascendant
increases its ownership of Redcorp to 80% or immediately if EDM
elect to participate in the Project. If the other conditions set
out in this announcement are satisfied, and if the call option was
exercised, M&FI's carried interest in Lagoa Salgada would
decrease from 20% to 5%.
As part of this arrangement, M&FI and Ascendant have also
amended the terms of the shareholders agreement made between (1)
Ascendant; (ii) M&FI; and (iii) Redcorp in relation to the
Project, to provide the following:
a) M&FI shall have the right and option, but not the
obligation, to exercise an option within 6 months (plus 10 business
days) of the Stage Two Option Exercise Date (being the date when
Ascendant has earned 80% of Redcorp and being no later than June
22, 2023 - Amended to no later than August 3, 2023) to require
Ascendant to purchase all, but not less than all, of the shares in
Redcorp at a defined price.
b) The price would be an amount in US dollars, payable in cash,
equal to 5% of the post-tax net present value of the Project
provided in the feasibility study completed prior to the date of
exercise using a 10.5% discount rate (the "Put Option").
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in
the United Kingdom pursuant to the European Union (Withdrawal) Act
2018. Upon the publication of this announcement via Regulatory
Information Service (RIS), this inside information is now
considered to be in the public domain.
FOR MORE INFORMATION:
Jacques Vaillancourt, Mineral & Financial Investments Ltd. +44 780 226 8247
Katy Mitchell and Sarah Mather, WH Ireland Limited +44 207 220 1666
Jon Belliss, Novum Securities Limited +44 207 382 8300
This information is provided by RNS, the news service of the
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