Forsys Announces Results of Positive Engineering Cost Study for Its Valencia Uranium Processing Plant
Published : May 02, 2013
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TORONTO, ONTARIO--(Marketwired - May 2, 2013) - Forsys Metals Corp (News - Market indicators)(FRANKFURT:F2T)(NAMIBIAN:FSY) ("Forsys" or the "Company") is pleased to announce the completion of an Engineering Cost Study ("ECS") on its planned Valencia process plant for the Company's consolidated Norasa uranium project in Namibia. The ECS, which was completed by the Perth office of leading engineering group, AMEC Australia Pty Ltd ("AMEC"), confirms the Company's focus on optimizing the Norasa project's economics. Completion of the ECS is a significant milestone on the path to completion of a NI 43-101 Feasibility Study, which is expected before the end of 2013.

Engineering Cost Study Highlights

  • Differential NPV estimates increased by US$348m1 before tax.
  • Opex is significantly reduced from the adjusted 2010 engineering cost study (in 2013 dollars).
  • Capex for the process plant is cost-effective at US$249.7m.
  • Leach residence time reduced significantly by 30%.
  • Increase in plant throughput from 8.7 Mt/a to 11.2 Mt/a.
  • An increase in average annual production from 3.3 Mlb to 4.2 Mlb U3O8.
  • Plant availability increased from 88% to 91%.
  • Plant block model greatly simplified.

Marcel Hilmer, Chief Executive Officer, commented, "We are very pleased to have delivered a positive engineering cost study which highlights many positives for the Norasa Uranium Project. It constitutes an important component for the completion of a feasibility study, which is planned for release by year's end. As a consequence of the positive study, we are now accelerating the drilling programs at Valencia East and Valencia North with a strategy to release an updated mineral resources statement in Q3 2013. In the near term, we will appoint an engineering firm to complete the feasibility study, which will incorporate the optimized processing plant."

The study reviewed the Snowden Group 2008 definitive feasibility study and 2010 engineering cost study that outlined some potentially attractive comminution flowsheet changes and optimizations. The ECS details the results of these investigations and studies and incorporates the recommended flowsheet changes and optimizations into the revised and updated capital and operating costs for the process plant component of the Norasa project.

The ECS will be available for download from www.forsysmetals.com.

Engineering Study - Key Metrics

AMEC completed a review of a number of alternative comminution circuits and compared them to an Adjusted Base Case ("ABC"). The ABC used the existing Snowden Group design; a 8.7 Mt/a, three-stage crushing and rod milling (3 off) at a grind of P80 = 850 µm. Capital and operating Costs were adjusted to reflect rate changes from 2010 to 2013 costs. Of the options considered, the most beneficial in overall terms was the semi autogenous grinding (SAG) Mill. The design is a two-stage crush plus single stage SAG mill using acidic filtrate at a grind of P80 ~600 µm.

  ABC SAG Mill1
Feed tonnage, Mt/a 8.7 11.2
Mill grade, g/ t U3O8 194 194
Overall U3O8 recovery 85% 85%
Annual production, Mlb U3O8 3.3 4.2
Operating cost, US$ Tonne $8.60 $7.68
Operating cost, US$ lb U3O8 $23.66 $21.11
Capital cost, US$ M $241.60 $249.70
Crushing Three-stage Two-stage
Milling 3 rod mills 1 SAG mill
U3O8 Price $/lb $70 $70
Total Revenue US$M/LoM $3,504 $4,487
Total Operating Costs US$M/LoM $2,109 $2,314
Differential NPV $M
(relative to ABC, 8% DR - before tax)
$0 $348

1 - The revenue, total operating costs and differential NPV values were generated by the Company using the capital costs and indicative operating costs estimated in the ECS, in addition to other assumptions made by Forsys on items excluded from this study, such as mining, external infrastructure, owner's costs, etc. which will be reviewed and estimated as part of the feasibility study. The differential NPV values in the above table are within 4% of the AMEC estimated differential NPV values considering the process plant and site infrastructure only. The differential NPV is a suitable measure to determine the possible economic improvements from implementing the SAG mill option as it relates to the processing plant. There is a ±25% accuracy associated with the cost study review.

To view the figure accompanying this press release, please visit the following link:

http://media3.marketwire.com/docs/870460.jpg

Bruno Modelling (A Metso process optimization tool)

Bruno modelling was conducted to model circulating loads around the main front end comminution equipment. The basis for the Bruno modelling is shown in the table below.

    ABC SAG Mill
Secondary, Tertiary Crusher Circuit      
Run time % 75 65
Run rate t/h 1322 1967
Fine Ore Stockpile (FOS) h (downstream capacity) 12  
  t live 13 076  
Mill/Repulp      
Type   Rod SSSAG
In acid?   No Yes
No. of   3 1
Run time % 88 91
Run rate t/h 1127 1400
Water added to mill/repulp circuit m3/h 628 1372
Leach Circuit      
Solids rate t/h 1127 1400
Solids density % 65 48
Water t/h 607 1517
Water m3/h 607 1517
Water SG   1 1
Solids SG   2.7 2.7
Slurry total m3/h 1024 2036
Pulp density t/m3 1.69 1.43

Capex

The capital cost summary for the SAG mill is set out below:

Description Amount
(US$)
Buildings 4 172 646
Process plant 186 307 010
Services and utilities 6 127 350
Reagents 8 759 293
Contractor mobilisation and demobilisation 4 413 834
Direct Construction Costs 209 780 132
First fills and spares 9 369 024
Temporary services and facilities 3 219 262
Total Costs before EPCM and Contingency 222 368 418
EPCM allowance 27 362 854
Total Costs before Contingency 249 731 272

Optimization Opportunities, Risks and Next Steps

Opportunities for further project and process improvement that were identified in the AMEC ECS and warrant further investigation include:

  • Potential to increase the overall uranium extraction and recovery to above the present assumed 85% by optimizing leach and filtration conditions further and also considering the finer grind size associated with the SAG mill.
  • Leach optimization, especially with regards to using a higher leach temperature, could result in a significant reduction in the required leach residence time and associated circuit size.
  • The present study assumed 91% availability for the SAG mill and downstream circuits, which could potentially be improved, especially considering the relative simplicity of this comminution circuit.
  • Potential of a higher throughput than the 11.2 Mt/a assumed for the current study exists, and was cursorily explored and could provide additional economic benefits.

The main risk identified during the current study is the potential implications of the iron chemistry on reagent consumption, which needs better definition.

The Company is defining a scope of work for the purpose of conducting a tender process to select an engineering firm to complete the feasibility study. The non-exhaustive scope of work will include:

  • A detailed design and costing of mine plans and associated Capex.
  • Further testwork including confirming recent testwork that reported higher uranium recoveries.
  • A review of administration overheads.
  • Detailed flowsheets to integrate with the re-designed mill.
  • Completion of appropriate economic models.
  • Completion of appropriate documentation and drawings.

NORASA - Consolidated Namibian Projects

The Company announced in September 2012 a consolidation of its various uranium projects in the Erongo region of Namibia (Valencia and Namibplaas), and in January 2013 the Company announced the combined projects are now known as the Norasa Uranium Project. Norasa is an everyday term used by the rich and diverse culture of the Damara people and means united or putting things together.

Qualified Person

Mr. Dag Kullmann, M.Sc., General Manager and Project Engineer Norasa Operations, and a Fellow of the Southern African Institute of Mining and Metallurgy (SAIMM), is the designated QP responsible for the reporting of Mineral Reserves.

About Forsys Metals Corp.

Forsys Metals Corp. is an emerging uranium producer with 100% ownership of the fully permitted Valencia uranium project and the Namibplaas uranium project in Namibia, Africa a politically stable and mining friendly jurisdiction. Information regarding current National Instrument 43-101 compliant Resource and Reserves at Valencia and Namibplaas are available on our website.

On behalf of the Board of Directors of Forsys Metals Corp.

Marcel Hilmer
Chief Executive Officer

Sedar Profile #00008536

Forward-Looking Information

This news release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Company. The following are important factors that could cause Forsys actual results to differ materially from those expressed or implied by such forward looking statements: fluctuations in uranium prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology; continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs; recovery rates, production estimates and estimated economic return; general market conditions; the uncertainty of future profitability; and the uncertainty of access to additional capital. Full description of these risks can be found in Forsys Annual Information Form, dated March 15, 2013, available on the Company's profile on the SEDAR website at www.sedar.com. These risks and uncertainties could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from anticipated in such information. These and all subsequent written and oral forward looking information are based on estimates and opinions of management on the dates they are made and expressed qualified in their entirety by this notice. The Company assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change.

Shares Outstanding: 109,875,422

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Forsys Metals Corp.
Marcel Hilmer
Chief Executive Officer
+61 417 177 942
mhilmer@forsysmetals.com
www.forsysmetals.com
or
TMX Equicom
Joe Racanelli
+1 416-815-0700 Ext 243
JRacanelli@equicomgroup.com
Data and Statistics for these countries : Australia | Namibia | All
Gold and Silver Prices for these countries : Australia | Namibia | All

Forsys Metals Corp.

DEVELOPMENT STAGE
CODE : FSY.TO
ISIN : CA34660G1046
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Forsys Metals is a zinc and copper exploration company based in Canada.

Forsys Metals develops zinc, copper and uranium in Namibia, and holds various exploration projects in Namibia.

Its main asset in development is VALENCIA URANIUM in Namibia and its main exploration properties are OMARURU, ELBE PROJECT, ONDUNDU and NAMIBPLAAS in Namibia.

Forsys Metals is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 86.1 millions as of today (US$ 68.8 millions, € 60.3 millions).

Its stock quote reached its highest recent level on April 20, 2007 at CA$ 9.94, and its lowest recent point on June 30, 2016 at CA$ 0.05.

Forsys Metals has 145 910 000 shares outstanding.

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Annual reports of Forsys Metals Corp.
2008 Annual Report
Annual Report 2007
Financings of Forsys Metals Corp.
11/28/2011Announces Completion of Private Placement
Nominations of Forsys Metals Corp.
8/15/2012Appoints Martin Hirsch as Chief Geologist
6/11/2012Appoints Director Finance and Establishes Office in Perth
7/28/2008Appoints Valencia General Manager
3/7/2008Appoints New Chief Financial Officer
Financials of Forsys Metals Corp.
8/15/2011Announces Second Quarter 2011 Financial and Operational Resu...
Project news of Forsys Metals Corp.
9/28/2012(Namibplaas)Announces: Updated Namibplaas Resource
3/26/2012(Namibplaas)Completes Acquisition of Remaining 30% Interest in Namibplaa...
2/1/2012(Ondundu)to Retain Control of The Ondundu Gold Project
10/24/2011(Namibplaas)Announces Agreement to Acquire Remaining 30% of Namibplaas U...
2/2/2011(Namibplaas)Announces Additional Positive Namibplaas Drilling Results an...
3/31/2010(Ondundu)TECHNICAL REPORT ON THE ONDUNDU GOLD PROJECT EPL3195, NAMIB...
8/21/2008(Valencia Uranium)Valencia Uranium Project, Namibia Mining Licence Granted
8/6/2008(Valencia Uranium) Confirms Deeper Uranium Mineralization at Valencia
7/22/2008(Valencia Uranium) Continues Drilling at Valencia Expanding Pit Bottom and Ove...
6/27/2008(Valencia Uranium) Adds Fourth Drill Rig to Test North Anomaly at Valencia
6/13/2008(Valencia Uranium)Mineralization Expansion and Grade Improvement at Valencia-F...
6/4/2008(Valencia Uranium)Receives Environmental Clearance for Valencia
4/29/2008(Valencia Uranium) Expands Uranium Zones at Valencia
4/1/2008(Ondundu)Increases Ownership of Ondundu Gold Project in Namibia to 90...
2/13/2008(Valencia Uranium)Announces Joly Zone Trenching Results
1/29/2008(Valencia Uranium) Provides Joly Zone Update
1/14/2008(Valencia Uranium)Reports Drilling Results and Resumes Drilling at Valencia
3/26/2007(Valencia Uranium)Significant Increase for the Valencia Uranium Resource
Corporate news of Forsys Metals Corp.
9/14/2015Forsys Metals Announces Non-Brokered Private Placement Updat...
8/12/2015Forsys Metals Announces Non-Brokered Private Placement
3/18/2015Forsys Releases Feasibility Study Results for Norasa Uranium...
11/26/2014Forsys Provides Norasa Uranium Project Feasibility Study Upd...
10/29/2014Forsys Closes $2.4 Million Private Placement
10/9/2014Forsys Provides Update on Private Placement & Progress on th...
7/7/2014Forsys Metals Initiates Feasibility Study for Norasa Uranium...
5/23/2014Forsys Announces Annual and Special Meeting Voting Results
3/27/2014Forsys Files Updated NI 43-101 Technical Report on Norasa Ur...
3/20/2014Forsys Adopts Advance Notice Policy for Director Nominations...
10/7/2013Provides Updated Mineral Resource Estimate for Its Norasa Ur...
5/2/2013(Valencia Uranium)Announces Results of Positive Engineering Cost Study for Its...
3/19/2013Reports Positive Exploration Drilling Results and Confirms H...
1/23/2013Significant New Exploration Results at Recently Discovered V...
1/26/2012(Namibplaas)Announces Additional High Grade Zones from Namibplaas Phase ...
10/5/2011Enters Into Share Subscription Agreement to Raise C$8,000,00...
9/15/2011(Namibplaas)Announces Maiden Resource Statement Namibplaas Project-Namib...
8/10/2011Announces Up to 92% Recoveries from Heap Leach Laboratory Te...
7/11/2011(Namibplaas)Announces Discovery of Extensive High Grade Zones From Ongoi...
5/15/2011Proposed Changes to Namibian Mineral Policy Will Not Affect ...
3/3/2011Announces Settlement Agreement With GFI and George Forrest
12/11/2008Corporate Quarterly Update
11/14/2008George Forrest International Afrique S.P.R.L. to Acquire For...
9/16/2008Corporate Quarterly Update
6/27/2008Clarifying Press Release-Mineral Resource and Mineral Reserv...
6/16/2008Corporate Quarterly Update
4/23/2008Clarifies Uranium Project on Track
4/11/2008Namibia to Build Second Desalination Plant for Uranium Mines
3/6/2008Prepares for Contract Mining at Valencia
2/25/2008Receives Water Permits
2/6/2008Uranium Exploration Licences Renewed
3/23/2007Completes Acquisition of Remaining 10% of Valencia Uranium D...
2/28/2007Completes $47.5 Million Financing
2/26/2007Acquires 70% of Ancash Investments and 5 Additional Uranium ...
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