Plains Creek receives Preliminary Economic Assessment for Direct Shipping Option Project for Farim Phosphate Project, Guinea Bi
28 Julio 2012 - 6:25AM
PR Newswire (Canada)
VANCOUVER, July 30, 2012 /CNW/ - Plains Creek Phosphate Corporation
("Plains Creek", the "Company") (TSX‐V: PCP) is pleased to announce
the results of a Preliminary Economic Assessment ("PEA") for the
Direct Shipping Option ("DSO") Project, the first step in the
development of the GB Minerals AG Farim Phosphate Project located
in Guinea Bissau, West Africa. The PEA was prepared by GBM Minerals
Engineering Consultants Limited ("GBMMEC") in conjunction with
Golder Associates Limited ("Golder"), GEEEM Consultants and Tropica
Environmental, all of whom are independent of the Company. Summary
of the DSO Project PEA The Farim Phosphate Project consists of a
high grade sedimentary phosphate deposit of one continuous
phosphate bed, known as the FPA layer, which extends over a known
surface area of approximately 40 km². A Measured and Indicated
Resource of 32.60 million tonnes ("Mt") of DSO phosphate has been
identified within the Farim Phosphate Project for the DSO Project
with a P(2)O(5) grade in excess of 30.7 % and an average
R(2)O(3) content of 6.01%. A 25 year mine life is planned for a
total of 12.5 Mt of DSO phosphate (500,000 tonnes per annum),
at an average grade of 30.7% P(2)O(5) and less than 6% R(2)O(3).
Based on the current Measured and Indicated Resources the potential
mine life for the DSO Project can be extended to in excess of 50
years at this production rate, based on the model and assumptions
contained in the PEA. The average strip ratio over the 25 year mine
plan is 7.4:1 (bank cubic meters waste: tonne phosphate). The
average thickness of phosphate deposit is approximately 4 meters
over the life of the DSO Project. Average annual waste production
is 3.6 Mm(3). The mine plan grade has been optimized to
remain above 30% P(2)O(5) for each of the 25 years of mine life.
The current financial model assumes the mining of 12.5 million
tonnes which is less than 38% of the recently announced Indicated
and Measured DSO Resources. There is also potential to improve the
Project economics by increasing the production rate and the life of
mine, capital and working costs. The Farim Phosphate Project has
been granted a Mining Lease and a Production License by the
Guinea-Bissau Government. This is valuable to optimizing the
timetable for development and production. The DSO Project
encompasses the following general process flow: -- Contractor
mining; -- Removal of overburden by a combination of excavators and
trucks; -- Run of Mine("ROM") phosphate removed by excavators and
trucks and stockpiled for loading and blending close to a barge
loading system located some 1.5 km from the open pit mine; -- A
number of barges moored to a floating pontoon will be loaded and
taken to a bulk carrier vessel (of 25,000 tonnes capacity) moored
to a floating ship loading facility off the Rio Casheu estuary for
dispatch to customers and off takers; -- The river transport
distance from the planned barge loading site at the mine site to
the Rio Cacheu estuary ship loading facility on the Atlantic Ocean
is approximately 150 kilometres; and -- ROM phosphate will also be
available for supply to the in-country market as a direct
application fertilizer. PRELIMINARY ECONOMIC ASSESSMENT HIGHLIGHTS
All amounts in US dollars Table 1: Summary of Physical Parameters
of the DSO Project
_____________________________________________________________________
| Physical Parameter | Value |
|_____________________________|_______________________________________|
|Mine Life |25 Years |
|_____________________________|_______________________________________|
|Construction Period |1 Year |
|_____________________________|_______________________________________|
|Operation |300 days per year |
|_____________________________|_______________________________________|
|Total Life of Mine Production|12.5 million tonnes @ 30.7% P2O5 and
| | |≤ 6 % FeAl phosphate |
|_____________________________|_______________________________________|
|Annual Sales |500,000 tonnes @ 30% P2O5 phosphate |
|_____________________________|_______________________________________|
|Revenue Guidance Estimate |US$150 per tonne of phosphate FOB |
|_____________________________|_______________________________________|
The mine plan and financial outputs are based on a mining cutoff
grade of 29% P(2)O(5) that utilizes approximately 38% of the
currently identified Direct Shipping Option Measured and Indicated
phosphate mineral resources. Table 2: Summary of DSO Project Costs
________________________________________________________________ |
Item | Cost (USD) |
|___________________________________|____________________________|
|Operating Costs | |
|___________________________________|____________________________|
|Mining |US$ 31.39 per tonne |
|___________________________________|____________________________|
|Power and Electricity |US$ 8.17 per tonne |
|___________________________________|____________________________|
|General & Admin expenses |US$ 5 per tonne |
|___________________________________|____________________________|
|Marine Logistics |US$ 9.12 per tonne |
|___________________________________|____________________________|
|Total |US$ 53.68 per tonne |
|___________________________________|____________________________|
| | |
|___________________________________|____________________________|
|Capital costs (life of mine) | |
|___________________________________|____________________________|
|Pre-production stripping (incl |US$ 19.27 million | |mobilisation)
| |
|___________________________________|____________________________|
|Mine, Marine & Infrastructure (incl|US$ 58.51 million |
|contingency) | |
|___________________________________|____________________________|
|Sustaining |US$ 64.75 million |
|___________________________________|____________________________|
|Closure |US$ 5 million |
|___________________________________|____________________________|
|Total Life of Mine capital costs |US$ 147.53 million including| |
|contingency |
|___________________________________|____________________________|
|Contingencies |25 % |
|___________________________________|____________________________|
|Royalties 2 % |2 % |
|___________________________________|____________________________|
Capital costs have been further estimated as follows: Table 3: DSO
Project CAPEX Estimate (Area Breakdown)
_____________________________________________________________________
|Area #| Area Name |Total |Contingency|Total Capital|Percent Total|
| | |Capital| | | | | | | | [M USD] | [M USD] | | | | |[M USD]| | |
|
|______|______________|_______|___________|_____________|_____________|
|000 |Project |11.60 |1.47 |13.07 |16.8% | | |General | | | | |
|______|______________|_______|___________|_____________|_____________|
|100 |Mine |21.91 |8.03 |34.43 |44.3 % |
|______|______________|_______|___________|_____________|_____________|
|200 |Marine |13.93 |8.23 |24.97 |32.1 % | | |Logistics | | | | |
|______|______________|_______|___________|_____________|_____________|
|300 |Marine |3.70 |1.70 |5.40 |6.8 % | | |Infrastructure| | | | |
|______|______________|_______|___________|_____________|_____________|
| |Total |58.44 |19.43 |77.87 |100 % |
|______|______________|_______|___________|_____________|_____________|
Capital estimates include mine facilities and infrastructure,
mining equipment, dewatering wells, stockpile loader, dyke
construction, stockpile area, and ex-pit haul road construction.
Table 4: Cash Flow Analysis
_______________________________________________________________________
| Units | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019
|2020-2039|
|__________|________|______|______|______|______|______|______|_________|
|Production| | | | | | | | |
|__________|________|______|______|______|______|______|______|_________|
|Phosphate |100 |400 |501 |500 |500 |500 |500 |9,500 | |'000 dry |
| | | | | | | | |tonne - | | | | | | | | | |Sales | | | | | | | | |
|__________|________|______|______|______|______|______|______|_________|
|Price |150 |150 |150 |150 |150 |150 |150 |150 | |Phosphate | | | |
| | | | | |US$/tonne | | | | | | | | |
|__________|________|______|______|______|______|______|______|_________|
|Sales US$ |15,000
|60,450|75,150|75,000|75,000|75,000|75,000|1,425,000| |'000 | | | |
| | | | |
|__________|________|______|______|______|______|______|______|_________|
|Cost of | | | | | | | | | |Sales | | | | | | | | |
|__________|________|______|______|______|______|______|______|_________|
|Operating |22 |58.07 |59.39 |59.75 |57.13 |56.93 |55.92 |52 |
|cost | | | | | | | | | |US$/tonne | | | | | | | | |
|__________|________|______|______|______|______|______|______|_________|
|Total |2,200 |23,286|29,754|29,875|28,565|28,465|27,960|494,000 |
|operating | | | | | | | | | |cost US$ | | | | | | | | | |'000 | |
| | | | | | |
|__________|________|______|______|______|______|______|______|_________|
|EBITDA US$|12,800
|37,164|45,396|45,125|46,435|46,435|47,040|931,000 | |'000 | | | |
| | | | |
|__________|________|______|______|______|______|______|______|_________|
|CAPEX US$ |77,780 |2,590 |2,590 |2,590 |2,590 |2,590 |2,590
|49,210 | |'000 | | | | | | | | |
|__________|________|______|______|______|______|______|______|_________|
|Net cash
|(64,980)|34,574|42,806|42,535|43,845|43,945|44,450|881,790 | |flow
| | | | | | | | | |before tax| | | | | | | | | |and | | | | | | | |
| |royalties | | | | | | | | | |US$ '000 | | | | | | | | |
|__________|________|______|______|______|______|______|______|_________|
Considering the DSO Project on a stand-alone basis, the
undiscounted pre-tax cash flow totals US$ 1,082 million over
the 25 year mine life. Operating cash flow averages US$ 45.36
million per year and simple payback of preproduction capital is
achieved after approximately 2 years of operation. EBITDA as
disclosed in the table above is a non-GAAP financial measure and
does not have a standardized meaning and is therefore unlikely to
be comparable to similar measures presented by other issuers. The
Internal Rate of Return (IRR) is 63%. Pre-tax Net Present Value
(NPV) at various discount rates is shown in Table 5. Table 5:
Pre-tax NPV Sensitivity to Discount Rate
_________________________________ | Rate | NPV |
|__________________|______________| |0 % (Undiscounted)|$
1,117million| |__________________|______________| |5 % |$ 552
million | |__________________|______________| |10 % |$ 338 million
| |__________________|______________| |15 % |$ 179 million |
|__________________|______________| |20 % |$ 106. million|
|__________________|______________| |25 % |$ 67 million |
|__________________|______________| The economic analysis contained
in PEA is based, in part, on Measured and Indicated Resources, and
is preliminary in nature. There is no certainty that the
resources development, production and economic forecasts on which
this PEA is based will be realized. Mineral Resource Estimates
Summary The Mineral Resource Estimate for the Farim Phosphate
Project was completed by the Qualified Person, Dr. Marcelo Godoy of
Golder in Santiago, Chile. Dr. Godoy meets the requirements
of a Qualified Person for the purposes of NI 43-101 reporting
and is independent from the Company. The Mineral Resource estimate
defines a Measured Resource of 64.6 Mt at an average grade of
29.11% P(2)O(5), an Indicated Resource of 28.1 Mt at an
average grade of 27.68% P(2)O(5) and an Inferred Resource of
18.3 Mt at an average grade of
28.66% P(2)O(5). No recoveries or dilution factors
have been considered in this estimate and the estimate is strictly
in situ, in accordance with NI 43-101 reporting guidelines for
resources. Resource Estimates The mineral resources reported in
this PEA were estimated using the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Standards on Mineral Resources and
Reserves, Definitions and Guidelines prepared by the CIM Standing
Committee on Reserve Definitions and are presented in the Table
below. Table 6: Mineral Resource Statement, Farim Phosphate
Deposit, 16 May, 2012
_______________________________________________________________________
|Resource | |Tonnage|P2O5 |FPA |Al2O3| CaO |Fe2O3|SiO2 | Over | | |
Class |Block| (Mt) | (%) |(m) | (%) | (%) | (%) | (%) |burden| S/R
| | | | | | | | | | | (m) | |
|_________|_____|_______|_____|____|_____|_____|_____|_____|______|_____|
| |North| | | | | | | | | | |Measured |Of |64.6 |29.11|3.65|2.78
|39.44|5.60 |11.39|43.40 |12.43| | |River| | | | | | | | | |
|_________|_____|_______|_____|____|_____|_____|_____|_____|______|_____|
| |North| | | | | | | | | | | |of |17.7 |26.93|3.15|2.62
|40.14|5.19 |10.64|39.50 |13.18| | |River| | | | | | | | | | |
|_____|_______|_____|____|_____|_____|_____|_____|______|_____|
|Indicated|South| | | | | | | | | | | |Of |10.3 |28.96|2.61|5.36
|36.37|4.59 |11.68|29.05 |12.11| | |River| | | | | | | | | | |
|_____|_______|_____|____|_____|_____|_____|_____|______|_____| |
|Sub |28.1 |27.68|2.95|3.63 |38.75|4.97 |11.02|35.65 |12.79| |
|total| | | | | | | | | |
|_________|_____|_______|_____|____|_____|_____|_____|_____|______|_____|
| |North| | | | | | | | | | | |of |82.3 |28.64|3.54|2.75
|39.59|5.51 |11.23|42.56 |12.59| | |River| | | | | | | | | |
|Measured
|_____|_______|_____|____|_____|_____|_____|_____|______|_____| |+
|South| | | | | | | | | | |Indicated|Of |10.3 |28.96|2.61|5.36
|36.37|4.59 |11.68|29.05 |12.11| | |River| | | | | | | | | | |
|_____|_______|_____|____|_____|_____|_____|_____|______|_____| |
|Sub |92.6 |28.68|3.44|3.04 |39.23|5.41 |11.28|41.05 |12.54| |
|total| | | | | | | | | |
|_________|_____|_______|_____|____|_____|_____|_____|_____|______|_____|
| |North| | | | | | | | | | | |of |3.4 |27.36|2.75|2.75 |39.30|5.21
|11.05|42.70 |15.81| | |River| | | | | | | | | | |
|_____|_______|_____|____|_____|_____|_____|_____|______|_____|
|Inferred |South| | | | | | | | | | | |Of |14.9 |28.96|2.35|6.30
|35.78|4.57 |11.64|29.45 |13.19| | |River| | | | | | | | | | |
|_____|_______|_____|____|_____|_____|_____|_____|______|_____| |
|Sub |18.3 |28.66|2.42|5.64 |36.43|4.69 |11.53|31.90 |13.67| |
|total| | | | | | | | | |
|_________|_____|_______|_____|____|_____|_____|_____|_____|______|_____|
Phosphate mineralization is still currently open to the west and
poorly drilled to the south of the River Cacheu. Key Assumptions
and Methods Golder prepared the Resource Estimate by modeling the
Farim resource based on a two dimensional (2D) block model with
125 m x 125 m cells and 25 internal discrete nodes
covering the extents of the FPA layer. The extents of the FPA layer
were estimated based on the presence or absence of the FPA layer in
the drill holes. Exploratory data analysis and variography were
carried out and variables were estimated using a three pass
strategy, whereby each successive pass had an increased search
radius and less restrictive sample selection criteria. This
approach ensures all blocks received a value for each variable.
Values were assigned using a combination of Ordinary Kriging and
Inverse Distance Weighted methods for the following variables:
P(2)O(5); Al(2)O(3); CaO; Fe(2)O(3); SiO(2); FPA Thickness; and
Overburden Thickness. The stripping ratio was derived from the
estimated overburden and FPA thicknesses. Classification was
assigned to each block in the model based on a drilling spacing as
follows: -- Measured Resource: Areas with drilling coverage of up
to 500 m by 500 m and a P₂O₅ slope of regression greater or equal
0.65; -- Indicated Resource: Areas with drilling coverage of up to
1000 m by 1000 m and a P₂O₅ slope of regression greater or equal
0.4; and -- Inferred Resource: Areas within the extents of the FPA
and not classified as Measured or Indicated. A corridor following
the Rio Cacheu was excluded and set to "unclassified" due to the
uncertainty related to the extraction of material in this area. In
addition, the resource estimate was divided into blocks
corresponding to the location relative to the Rio Cacheu; "north"
or "south". After applying the above criteria and the for the
purpose of public reporting the resources where restricted to a
minimum FPA thickness of 1.5 m and a stripping ratio no
greater than 20:1. By applying these mining restrictions it is
considered that the disclosed mineral resource estimates fulfill
the requirement of "reasonable prospects for economic extraction".
Due to the consistent grade continuity, with grades above 27% P₂O₅
, a phosphate cut-off grade was not applied to report the Mineral
Resource estimates. Data Verification Data verification was carried
out by Golder and included independent sampling, a core logging
check, drill hole collar survey checks and database integrity
checks. No material issues were noted. Golder reviewed the quality
assurance and quality control (QAQC) procedures reported from
previous exploration campaigns. QAQC procedures and data from
GB Minerals AG (which is the subsidiary of the Company that holds
the title to Farim Phosphate Project) were reviewed by Golder. GB
Minerals AG submitted a total of eight field duplicates and six
standards samples in a total of 156 samples. No blanks were
submitted. There is no process design involved in the direct
shipping of phosphate by sea transportation. During a site
visit in May 2011, Golder reviewed the drilling, logging and
sampling procedures employed by GB Minerals AG. A laboratory audit
of both the sample preparation and assaying facilities was also
carried out by Golder. Data verification for resources was also
extensively covered in the previously filed Technical Report of the
Company dated February 10, 2011 filed on SEDAR under the Company's
profile at www.sedar.com. Mining The majority of the annual
rainfall over the DSO Project area is concentrated in the period
from July through September, and the DSO Project mine plan will
carry out mining activities for 10 months out of the year to
avoid the inefficiencies of mining during the higher rainfall
months. Installed mining equipment capacity has been designed
to produce the annual plan phosphate requirements and associated
waste stripping within the 10 drier months of the year. Key
design elements of the DSO mining plan are water management and
haul road maintenance. All mining areas must be fully
dewatered in advance of mining activities. The proximity of the
mine to the Rio Cacheu will require the construction of a
protection dyke to prevent in-pit flooding. Contractor mining has
been selected, for the excavator / truck mining method
for the DSO mining plan based on flexibility, lower initial
capital, lower investment risk, grade control, and the ability to
blend quality for required product specifications. Contractor
mining has been proposed to minimize capital investment and to
shorten the period to production which could arise from the
availability of mining capital equipment and the shortage of in
country manpower skills. The remote nature of the Project, with
limited power supply, precludes the use of electric mining
equipment and all mining equipment selected for the DSO Project is
diesel mobile equipment. This mining method uses excavators and
trucks to handle 100% of the overburden and DSO phosphate. Waste
will be stripped and removed with 11 m(3 )to 12 m(3)
bucket front-end loaders or small hydraulic excavators matched with
50 ton haul trucks. The DSO phosphate will be mined with
3 m(3 )to 4 m(3 )bucket class backhoes matched with
35 t trucks. ROM phosphate will be removed by excavators and
trucks to a 20,000 tonne ROM pad for storage and blending. The ROM
pad is located some 1.5km from the open pit and adjacent to the
barge loading facility. The DSO operation will mine 0.5 Mtpa
of phosphate and will require a waste storage facility capable of
holding 34 Mm(3). The facility will be approximately
25 m high with a footprint of 1000 meters by
1500 meters. Beneficiation The ROM phosphate will be mined,
blended if necessary and will be directly shipped with limited
treatment or processing (if any). Project Infrastructure and
Product The infrastructure requirements associated with the DSO
project include the mine infrastructure, mine camp, offices,
workshops, water treatment facilities, power generation and water
supply. River Transport and Loading Transfer of phosphate from the
ROM pad to the feed hopper of the barge loading facility will be by
front end loader. The hopper will feed a conveyor system to load
2,700 t non-propelled barges. Sets of barges will then
transport with the aid of a pusher tug down the Rio Cacheu to a
seagoing vessel. The barges will be unloaded by the seagoing vessel
anchored to a floating ship loading facility beyond the shallow
waters (+ 12 meter deep) using clam shell unloaders. Possible
mooring points accessible to vessels of capacity up to 25,000t have
been identified in the estuary of the Rio Cacheu. Recommendations
The results of the Preliminary Economic Assessment show that the
DSO Project is robust from a technical and economic standpoint at
the selected long term phosphate prices, and GBMMEC has recommended
that the DSO Project continues to be advanced to the Feasibility
Stage and that a production rate of 1 Mt per annum be investigated.
Qualified Persons Dr. Marcelo Godoy, MAusIMM (CP) of Golder in
Santiago, Chile, who is a Qualified Person as defined in NI 43-101,
prepared and is responsible for the Mineral Resource Estimate for
the Farim Phosphate Project as disclosed in this news
release. In addition, the following other Qualified Persons
prepared (or supervised and approved the preparation thereof) and
are responsible for other parts of the PEA, which are referred to
in this news release: Michael Short, FIMMM, C.Eng. of GBMMEC, Ian
Jackson, B.Eng, ACSM, C.Eng., MIMMM (CP) of GBMMEC, Richard Elmer,
C.Eng., MIMMM (CP) of Golder, and Terry Kremmel, PE (MO and NC),
SME (CP) of Golder. All of these Qualified Persons are independent
from the Company. About Plains Creek Phosphate Corporation Plains
Creek Phosphate Corporation is a Canadian mining and exploration
company focused on advancing the Farim Phosphate Project located in
Guinea‐Bissau, West Africa. The Farim Project currently comprises a
phosphate deposit consisting of one continuous flat lying phosphate
bed with a NI 43‐101 compliant Mineral Resource estimate that
defines a Measured Resource of 64.6 MT at an average grade of
29.11% P2O5, an Indicated Resource of 28.1 Mt at an average
grade of 27.68 % P(2)O(5) and an Inferred Resource of
18.3 Mt at an average grade of 28.66 % P(2)O(5). A
two phased development is planned for the Farim Phosphate Project
as an open pit mining operation. Phase One consists of a Direct
Shipping Option Project with an annual phosphate production of 0.5
Mt per annum and Phase Two which consists of the production of 2 Mt
per annum of phosphate rock concentrate and includes a
beneficiation plant and associated infrastructure, pipeline and
port. The Company's shares are listed on the TSX Venture Exchange
under the trading symbol "PCP". For additional information, please
visit us at www.plainscreek.com. ON BEHALF OF THE BOARD (Signed)
"Carson Phillips" Carson Phillips Vice‐President, Corporate
Development and Director Cautionary Statement Statements in this
release may be viewed as forward-looking statements. Such
statements involve risks and uncertainties that could cause actual
results to differ materially from those projected. There are no
assurances the Company can fulfill such forward-statements and the
Company undertakes no obligation to update statements. Such forward
looking statements are only predictions; actual events or results
may differ materially as a result of risks facing the Company, some
of which are beyond the Company's control. In addition, pursuant to
National Instrument 43-101, the Company cautions that mineral
resources that are not mineral reserves do not have demonstrated
economic viability. The reader should be cautioned that there are
risks that could affect the potential development of the Project's
mineral resources, which include: the political instability in
Africa and Guinea Bissau in particular, which is where the Project
is located; and that additional financing will be required to
ultimately develop the Project and the ability to obtain such
financing on favorable terms will be affected by prevailing market
conditions. A more detailed discussion of such risks are
outlined in the Company's Filing Statement dated February 22, 2011
which is filed under the Company's profile on SEDAR at
www.sedar.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. Plains Creek Phosphate Corp. CONTACT:
Carson PhillipsVice President, Corporate Development and
DirectorTelephone: (604) 569 0721 E mail: cphillips@plainscreek.com
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