EPM Mining Issues Summary of 2013 Results and 2014 Projections for Its Sevier Lake Playa Sulphate of Potash Project
January 16 2014 - 6:00AM
Marketwired Canada
EPM Mining Ventures Inc. (TSX VENTURE:EPK)(OTCQX:EPKMF) ("EPM" or the
"Company"), today issued a review of advancements accomplished during 2013 at
its Sevier Lake Playa Sulphate of Potash Project located in southwestern Utah
and offered guidance about what is planned for 2014.
"As C.E.O., I am very pleased with everything we achieved this past year and
look forward to all that we will accomplish this year," said Lance D'Ambrosio,
Chief Executive Officer of EPM. "Looking back, I have to say that without a
doubt, our biggest success was completing our Preliminary Feasibility Study. So
let me start by sharing a few highlights from that."
Preliminary Feasibility Study Highlights
-- The PFS forecasts average annual SOP production of 300,000 metric tonnes
(t) with an estimated Net Present Value ("NPV") of $629 million (after
tax, inflated, 8% discount rate) and an estimated Internal Rate of
Return ("IRR") of 20% (after tax, inflated).
-- The PFS includes an updated Mineral Resource Estimate that includes
31.486 million tonnes of SOP in the Measured and Indicated categories, a
7% increase from previously published estimates, due primarily to
results of recent drilling.
-- Economic Highlights:
----------------------------------------------------------------------------
Economic Indicators
----------------------------------------------------------------------------
NPV (pretax, 8%) $ 957 M
----------------------------------------------------------------------------
NPV (after tax, 8%) $ 629 M
----------------------------------------------------------------------------
IRR (pretax) 24%
----------------------------------------------------------------------------
IRR (after tax) 20%
----------------------------------------------------------------------------
Average Annual SOP Production 300,000 t
----------------------------------------------------------------------------
Mine Life 30 years
----------------------------------------------------------------------------
Initial Direct Capital Costs $ 292 M
----------------------------------------------------------------------------
Initial Indirect Capital Costs $ 50 M
----------------------------------------------------------------------------
Initial Capital Contingency $ 36 M
----------------------------------------------------------------------------
Operating Cost $ 180.91/t
----------------------------------------------------------------------------
Production Royalties (% of gross revenues) 5.61%
----------------------------------------------------------------------------
Year 3 EBITDA (nameplate production) $ 143 M
----------------------------------------------------------------------------
Payback Period (from commencement of production) 5.5 years
----------------------------------------------------------------------------
Measured & Indicated SOP Resource 31.486 Mt
----------------------------------------------------------------------------
-- The economic analysis in the PFS is based upon the following
assumptions:
-- 100% Equity
-- Production Ramp-Up over two years, reaching full production in Year
3
-- 50,000 tonnes in Year 1; 100,000 tonnes in Year 2; and 300,000
tonnes in Year 3
-- Construction on playa beginning in Preproduction Year 3 ("PP-3")
-- Effective tax rate of approximately 29%
-- The economic analysis was based upon Measured and Indicated Mineral
Resources only. No Inferred Resources were included in the analysis.
Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability.
-- Capital Costs - the total direct capital costs of the Project are
estimated to be $292 M, not including indirect costs and contingency, as
of 2013. All capital costs in the economic model are inflated by 2%
annually beginning in year PP-3. Contingency is 12% of direct capital
costs. The capital cost estimate has an accuracy of +25%/-20%.
-- Operating Costs - the total cash operating costs of the Project are
estimated to be $180.91/t as of 2013. All operating costs in the
economic model are inflated by 2% annually beginning in year PP-3.
"In 2013 as part of the PFS, we conducted a comprehensive study of the playa and
made significant progress with our engineering," said Lance. "These efforts
provided us with important insights and a detailed path forward. The highlights
include:"
Hydrology Highlights
-- A comprehensive groundwater modeling effort was completed that included
two- and three-dimensional models of the playa system. The models
incorporated layer elevations derived from intercepts logged from over
400 boreholes and wells drilled during the exploration programs.
-- Field data incorporated into the models included estimates of hydraulic
conductivity and storage coefficients based on hydrophysical and aquifer
stress tests employing both wells and trenches. Site-specific estimates
of the vertical infiltration rate and evapotranspiration were also
obtained.
-- In the latest program, five single-hole pump tests were performed;
four well-to-trench tests; nine well-to-well tests; and one trench-
to-trench test. These studies yielded substantial new data that
significantly improved our understanding of playa hydrology.
-- Initial modeling determined that the target production rate of 300,000
tpy could be achieved based upon the hydro-physical characteristics of
the deposit. Multiple simulations incorporating trench spacing, well
layouts, and flow rates were carried out to prototype designs.
-- Results showed that acceptable brine production could be extracted
from two trench phases, based on 1,000 meter spacing, followed by
well extraction with individual shafts set about 400 meters.
Engineering Highlights
-- Developed an optimized process flow sheet anticipated to provide
improved operating benefits and flexibility while maintaining a balance
between production, expense, and potential additional mineral
production.
-- Completed thermodynamic modeling and pilot-plant testing of pond
crystallization. In addition, conducted bench-scale testing with Hazen
Research and Swenson Technologies for the flotation and multiple effect
crystallizer circuits. The thermodynamic modeling and subsequent bench-
scale test-work confirmed projected plant recoveries of 78%.
-- Developed civil construction designs for the plant and rail load-out
facility as well as all playa infrastructure. The capital cost estimate
in the PFS included budgetary quotes on 93% of all plant mechanical
equipment costs.
"As I briefly mentioned before, we successfully expanded our resource estimates
by about seven percent," Lance added. "While we expect to release mineral
reserves with our feasibility study, we are very pleased to provide a summary of
the basis for the resource estimate expansion."
Resource Estimate Expansion Highlights
-- Norwest completed an updated Mineral Resource Estimate based upon data
collected from the original drilling and exploration program conducted
in 2011-2012 as well as a second drilling and exploration program
conducted in 2013.
-- The total Measured and Indicated Resource for SOP increased from 29.485
Mt in the May 2012 Technical Report, to 31.486 Mt in the PFS, an
increase of approximately 7%, primarily due to the results of the 2013
drilling program.
-- No claim for Mineral Reserves has been made at this time pending further
verification of the hydrologic models via longer-term pilot testing
planned during the Feasibility Study phase.
"We received several important approvals this past year," Lance stated. "And our
environmental and permitting programs continue to progress. Highlights from
these include:"
Environmental, Permitting, & Regulatory Highlights
-- The Company met with the Utah Division of Air Quality ("UDAQ") in August
2013. In that meeting, UDAQ determined that the company could proceed
along a "dual permit" approach. This means that a Minor Source permit is
all that is required for initial work on the playa to begin while a
Major Source Permit could be added later when construction of the
processing plant is required.
-- An Air Approval order for the Minor Source Permit was submitted to
UDAQ in October 2013. An approval is expected shortly.
-- In July of 2013, the company started an on-site monitoring program
for Prevention of Significant Deterioration (PSD), or the Major
Source Permit.
-- The BLM's Fillmore Field Office continued progress with the EIS and
selected a third-party contractor to write the EIS document in August
2013. Technical resource reports were prepared by CH2M Hill and
submitted to BLM for their review and approval in November 2013. BLM
selection of the third-party contractor is an important step to moving
the EIS process forward.
-- The BLM Plan of Operations and DOGM Large Mine Permit, historically two
separate documents, are being consolidated into a single mine plan
document (the "Mine Plan") agreed to by both agencies. The BLM has
reviewed the Mine Plan and determined it was "Sufficiently Complete" in
July 2013. A consolidated Mine Plan will allow for the Company to have
one all-encompassing document that meets the requirement for the two
agencies.
-- A key decision in June 2013 by the Environmental Protection Agency and
the United States Army Corps of Engineers ("USACE") determined that
there are no Waters of the United States on the Sevier Lake Playa.
-- USACE determined that the Sevier Lake Playa is not a regulated
feature under Section 404 of the Clean Water Act ("Act") and as such
is exempt from permitting requirements under the Act.
-- Therefore, certain federal permits relating to water will not be
required. This decision simplifies the permitting process and
results in significant savings of time and money.
-- In 2013, the Company submitted all water rights applications to the
State Engineer, for which there were only four protestants.
-- In August 2013, the Company along with Holland and Hart and CH2M
Hill discussed EPM's water rights presentation with the State
Engineer in Delta, Utah. The hearing went very well and the Company
anticipates that all water right applications will be approved by
the third quarter 2014.
Outlook for 2014
"2014 should be a banner year for us. We expect to complete most of the
pre-construction milestones, nearly complete our EIS, and conclude all other
necessary permitting," Lance indicated. "And soon, we will be kicking-off our
Feasibility Study. While the PFS only considered SOP production, we anticipate
that the Feasibility Study will consider the production of specialty products in
addition to SOP including, magnesium sulphate, magnesium chloride, sodium
sulphate, and possibly lithium," Lance said. "Given the presence of the other
known constituents in our brine resource, we expect these minerals to provide
the Company with a significant source of additional value if such minerals prove
to be economic as the result of further studies."
About EPM Mining Ventures
EPM Mining Ventures Inc. is a development-stage company focused on specialty
fertilizers. Through Peak Minerals Inc., its indirect wholly-owned subsidiary,
EPM controls directly or through agreement mineral leases on more than 124,000
acres on its Sevier Lake Playa property in Millard County, Utah. With a brine
resource known to contain potassium, magnesium, sulphate, lithium and a suite of
other beneficial minerals, EPM is targeting the development and production of
specialty fertilizers, including SOP, through the use of a cost-effective solar
evaporation process. SOP and other specialty fertilizers are used in the
production of high value, chloride-sensitive crops such as fruits, vegetables,
and tree nuts. With the recent completion of a Preliminary Feasibility Study,
the Company is currently engaged in engineering and analysis designed to support
a feasibility study, environmental permitting, and ultimately mineral
production.
For more information, please visit our web site at www.epmmining.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
EPM Mining Ventures Inc.
Lance D'Ambrosio
Chief Executive Officer
(801) 485-0223
www.epmmining.com
Inform Resources (TSXV:IRR)
Historical Stock Chart
From Apr 2024 to May 2024
Inform Resources (TSXV:IRR)
Historical Stock Chart
From May 2023 to May 2024
