VANCOUVER, Sept. 15, 2014 /PRNewswire/ - Taseko (TSX: TKO;
NYSE MKT: TGB) (the "Company") announces proven and probable
reserves of 84 million tonnes grading 0.50%
Nb2O5 for its 100%-owned Aley Niobium Project
("Aley" or the "Project").
Russell
Hallbauer, President and CEO of Taseko, stated, "In 2007, we
acquired the Aley project for $5.4
million and after only six years and $30 million of exploration and development work,
we have proven up a project with an $860
million net present value (NPV). The substantial shareholder
value that has been created by this work has yet to be realized in
the Company's equity. While we advance the project through the
environmental assessment phase we will continue to optimize
technical aspects to further improve the economics. The relatively
low capital cost, strong operating margins and favourable operating
jurisdiction make Aley another ideal growth project for
Taseko."
Project Highlights
- Pre-tax net present value of approximately C$860 million at an 8% discount rate
- Pre-tax internal rate of return of 17% with a 5.5 year
payback
- Anticipated operating margin of US$21/kg of niobium (Nb)
- Average annual production of 9 million kilograms Nb in the form
of FeNb
- 24 year mine life at a milling rate of 10,000 tonnes per
day
- Life of mine strip ratio of 0.5:1
- Total pre-production capital cost of C$870 million, including; $520 million for mine, concentrator and site
infrastructure; $180 million for the
converter, $100 million for offsite
infrastructure including the transmission line, and $70 million for pre-stripping
Mr. Hallbauer continued, "The market for niobium
continues to grow, year-over-year, at nearly double-digit rates as
the demand for specialty steels become increasingly important. The
principal market for niobium is in high-strength, low-alloy steels
which account for roughly 90% of niobium usage. The addition of
niobium to these steels improves the strength-to-weight ratio
making it ideal for automotive, aerospace, pipeline and
shipbuilding applications. As new grades of niobium-containing
high-strength steel are developed, demand growth for niobium will
out-pace the overall steel market. We also believe that an
additional niobium producer will support demand growth by removing
some of the risk associated with a tightly controlled market."
Aley is not only the highest quality niobium
project being developed today, but also the most advanced. The
barriers to entry into the niobium market are significant. There
are very few known niobium projects around the world and none the
scale of Aley. Additionally, the challenges of metallurgy are not
insignificant, as evidenced by the three years it has taken
Taseko's technical team to achieve the desired recoveries. Aley is
expected to generate Canadian dollar revenues of approximately
$400 million per year over its 24
year mine life, and with the anticipated operating margin,
contribute significantly to Taseko's cash flow generating ability,"
concluded Mr. Hallbauer.
The study was done using long term metal prices
of US$45.00/kg for niobium and an
exchange rate of US$0.90/C$1.00.
Mineral Reserves
Category
(0.30% Nb2O5 cut-off) |
Tonnes
(millions) |
Nb2O5
(%) |
|
Proven |
44.3 |
0.52 |
Probable |
39.5 |
0.48 |
Total |
83.8 |
0.50 |
The NI 43-101 compliant reserve estimate takes into
consideration all geologic, mining, milling, and economic factors,
and is stated according to Canadian standards (NI43-101). (Under US
standards no reserve declaration is possible until a full
feasibility study is completed and financing and permits are
acquired.)
Pre-Production and Mine Plan
The study demonstrating the reserve incorporates
activities during a pre-production period of two years which
include construction of the electricity transmission line;
upgrading and extension of current road access and mine site
clearing; site infrastructure, processing, and tailings starter dam
construction; removal and storage of overburden; and pre-production
waste development.
The mine plan utilizes a conventional truck
shovel open pit mining operation. Following the pre-production
period, total material moved averages 15,000 tonnes/day.
Processing and Infrastructure
The Aley Project is located in north central
British Columbia approximately 130
km north of the town of Mackenzie.
Current access is by road, around the north end of Williston
Reservoir, to within 6 kilometres of the site.
The Aley processing plant has been designed with
a nominal capacity of 10,000 tonnes per day. The plant consists of
single stage crushing followed by three stage grinding and a
multi-stage flotation process to produce a
Nb2O5 concentrate. The flotation concentrate
is then prepared prior to being processed in an on-site converter
to produce FeNb as a saleable product.
Expected process recovery is 63% with annual
production averaging 9 million kilograms niobium over the mine
life.
Mineral Resources
The Mineral Reserves above are included in the
following Measured and Indicated Mineral Resources.
Category
(0.20% Nb2O5 cut-off) |
Tonnes
(millions) |
Nb2O5
(%) |
Measured |
112.6 |
0.41 |
Indicated |
173.2 |
0.35 |
Total |
285.8 |
0.37 |
Supporting Work
The Mineral Reserves are based on engineering
directed by Taseko incorporating the measured and indicated
resources established in 2012, metallurgical and converter test
work completed by SGS Canada Inc. and XPS Testwork & Consulting
Services respectively, pit design and mine planning by Moose
Mountain Technical Services, converter design by Ausenco, and
tailings and water management layouts by Knight Piésold Ltd.
The Mineral Reserves are a subset of the Mineral
Resources reported in the March 29,
2012 Technical Report, "Technical Report, Aley Carbonatite
Niobium Project", prepared by Ronald G.
Simpson, P.Geo and a Qualified Person under National
Instrument 43-101.
The mine plan, mine related costing, and
tailings and water management design was supervised and reviewed by
Greg Yelland, P.Eng., Chief Engineer
for Taseko and a Qualified Person under National Instrument
43-101.
Metallurgical and converter test work was
supervised and reviewed by Keith
Merriam, P.Eng., Manager, Process Engineering for Taseko and
a Qualified Person under National Instrument 43-101.
Process and plant design work was done in
accordance with design criteria derived from metallurgical and
pyrometallurgical test work under the supervision of Rob Rotzinger, P.Eng. Vice-President Capital
Projects for Taseko and a Qualified Person under National
Instrument 43-101.
The reserve estimation was reviewed by
Scott Jones, P.Eng., Vice-President
Engineering for Taseko and a Qualified Person under National
Instrument 43-101. Mr Jones has verified the methods used to
determine grade and tonnage in the geological model, reviewed the
long range mine plan, and directed the updated economic
evaluation.
The NI 43-101 technical report documenting these
results will be filed on www.sedar.com within 45 days.
Russell Hallbauer
President and CEO
No regulatory authority has approved or
disapproved of the information contained in this news release.
CAUTION REGARDING FORWARD-LOOKING
INFORMATION
This document contains "forward-looking statements" that were
based on Taseko's expectations, estimates and projections as of the
dates as of which those statements were made. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "outlook", "anticipate",
"project", "target", "believe", "estimate", "expect", "intend",
"should" and similar expressions.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the Company's
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking statements. These included but are not limited
to:
- uncertainties and costs related to the Company's exploration
and development activities, such as those associated with
continuity of mineralization or determining whether mineral
resources or reserves exist on a property;
- uncertainties related to the accuracy of our estimates of
mineral reserves, mineral resources, production rates and timing of
production, future metal prices, future production and future cash
and total costs of production and milling;
- uncertainties related to feasibility studies that provide
estimates of expected or anticipated costs, expenditures and
economic returns from a mining project;
- uncertainties related to the ability to obtain necessary
licenses permits for development projects and project delays due to
third party opposition;
- uncertainties related to unexpected judicial or regulatory
proceedings;
- changes in, and the effects of, the laws, regulations and
government policies affecting our exploration and development
activities and mining operations, particularly laws, regulations
and policies;
- changes in general economic conditions, the financial markets
and in the demand and market price for copper, gold and other
minerals and commodities, such as diesel fuel, steel, concrete,
electricity and other forms of energy, mining equipment, and
fluctuations in exchange rates, particularly with respect to the
value of the U.S. dollar and Canadian dollar, and the continued
availability of capital and financing;
- the effects of forward selling instruments to protect against
fluctuations in copper prices and exchange rate movements and the
risks of counterparty defaults, and mark to market risk;
- the risk of inadequate insurance or inability to obtain
insurance to cover mining risks;
- the risk of loss of key employees; the risk of changes in
accounting policies and methods we use to report our financial
condition, including uncertainties associated with critical
accounting assumptions and estimates;
- environmental issues and liabilities associated with mining
including processing and stock piling ore; and
- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which we
operate mines, or environmental hazards, industrial accidents or
other events or occurrences, including third party interference
that interrupt the production of minerals in our mines.
For further information on Taseko, investors should review the
Company's annual Form 40-F filing with the United States Securities
and Exchange Commission www.sec.com and home jurisdiction filings
that are available at www.sedar.com.
SOURCE Taseko Mines Limited