West High Yield (W.H.Y.) Resources has received its Preliminary Economic Assessment (P.E.A.) NI 43-101 report with indicated and measured results totalling 10,590,000 Mg/Mt, averaging 24.61%. The Record Ridge South property (the Project) is an intermediate-advanced stage magnesium exploration project, currently tested by 77 diamond drill holes. Full (P.E.A.) NI 43-101 on www.sedar.com
The financial results of this report are based upon work performed by SRK and have been prepared on an annual basis. All costs are constant U.S. dollars.
A financial model was prepared on an after-tax basis, the results of which are presented in this section. Financial assumptions used are summarized in Table 3.
Table 3: Model Parameters
The economic analysis results, shown in Table 4, indicate a pre-tax net present value (NPV) 5% of US$ 1.339 Billion and initial rate of return (IRR) of 21%, and a post-tax NPV 5% of US$830 million and IRR of 17%. Capital identified in the economics isfor project installation, sustaining operations, and plant and equipment rebuilds as required. The following provides the basis of the SRK Life of Mine (LoM) plan and economics:
- A mine life of 42 years;
- An overall average process recovery rate of 80% Mg over the remaining LoM;
- Sodium Sulfate market price of US$75/t Free on Board (FOB) Record Ridge;
- A credit of US$345/t-Electro Fused Magnesia (EFM) from the Sodium Sulfate co-product sale;
- A project cash cost of US$668/t-EFM;
- EFM market price of US$1,100/t FOB;
- Sodium Sulfate market price of US$75/t FOB; and
- Initial capital costs of US$608 million.
Table 4: Mine & Plant Economic Results