2007-06-19 18:43 ET - News Release
Mr. James Jacuta reports:
NEW CANTECH ANNOUNCES NATIONAL INSTRUMENT 43-101 REPORT CONTAINING RESULTS OF
PRELIMINARY ECONOMIC ASSESSMENT
VANCOUVER, BRITISH COLUMBIA--- On May 2, 2007 New Cantech Ventures Inc. ("New
Cantech") (TSX VENTURE:NCV)(FRANKFURT:C7X) announced that A.C.A. Howe
International Limited had completed a Preliminary Economic Assessment ("PEA") on
New Cantech's Lucky Ship Molybdenum Project and that New Cantech would
thereafter be SEDAR filing a National Instrument 43-101 Report containing that
PEA. New Cantech is very pleased to announce that it has now received and SEDAR
filed that National Instrument 43-101 Report.
New Cantech's Lucky Ship Molybdenum Project is located 85 kilometres by road
southwest of Houston, British Columbia.
The PEA was based on the revised mineral resource estimate as of May 1, 2007
of the Lucky Ship Molybdenum deposit as prepared by A.C.A. Howe International
Limited; and a 10,000 tonne per day ("tpd") open pit option in which the mill
would be located on-site and open pit waste rock and tailings would be disposed
within a waste management area known as T-2 situated seven (7) kilometres from
the projected open pit site. The 10,000 tpd option was assessed for combinations
of mill; Mo recovery (i.e. 80%, 85%, and 90%); and molybdenum price (i.e. US$
20/lb Mo, US$ 30/lb Mo, US$ 40/lb Mo and US$ 50/lb Mo).
It was estimated that the open pit would operate for approximately 16 years
at a rate of 10,000 tpd ore plus waste rock based on the preliminary open pit
design. It was estimated the open pit would produce 55 million tonnes of ore at
an average grade of 0.062% Mo and 131 million tonnes of waste rock. The
resources contain approximately 11.7 million diluted tonnes of inferred material
inside the pit design limit. The reader is cautioned that inferred mineral
resources are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized as
mineral reserves, and there is no certainty that any value from such resource
will be realized either in whole or in part.
The major capital items for the project are: a power line and substation
estimated to cost $25 million; a used and refurbished mill estimated to cost $90
million with commissioning; a waste rock crusher and conveyor system to
transport waste rock to area T-2 estimated to cost $37 million; a pre-production
waste stripping program estimated to cost $26 million; a waste management area
at T-2 estimated to cost $40 million; and mine equipment including shop
estimated to cost $29 million. The annual life of mine operating cost was
estimated to be C$18.54/ tonne milled and includes mining, processing, waste
rock stripping and disposal, and general and administration costs.
The Lucky Ship Molybdenum project was analyzed using the discounted cash flow
method, on the basis of 100% equity, and in first quarter, year-2007 Canadian
dollars. The cash flow projections of annual costs were also based on the open
pit diluted preliminary production schedule, and an exchange rate of
US$1.00:C$1.17 to convert molybdenum revenues to Canadian dollars. The results
of the preliminary financial analysis are presented in Tables 1, 2, 3 and 4.
Table 1. Estimates of internal rates of return (IRR) for selected molybdenum recoveries and
molybdenum price combinations.
Molybdenum Molybdenum oxide price (US$/lb Mo)
Recovery in US$20/lb Mo US$30/lb US$40/lb Mo US$50/lb Mo
Concentrator Mo
90% 8% 34% 59% 84%
85% 5% 30% 53% 77%
80% 2% 25% 48% 70%
Table 2. Estimates of Net Present Value (NPV) at 0% discount rate for selected molybdenum
recoveries and molybdenum price combinations.
Molybdenum Molybdenum oxide price ($US/lb Mo)
Recovery in US$20/lb Mo US$30/lb Mo US$40/lb Mo US$50/lb Mo
Concentrator
90% $207 million $985 million $1,763 million $2,541 million
85% $125 million $860 million $1,594 million $2,329 million
80% $43 million $734 million $1,425 million $2,117 million
Table 3. Estimates of Net Present Value (NPV) at 7% discount rate for selected molybdenum
recoveries and molybdenum price combinations.
Molybdenum Molybdenum oxide price (US$/lb Mo)
Recovery in US$20/lb Mo US$30/lb Mo US$40/lb Mo US$50/lb Mo
Concentrator
90% $18 million $450 million $883 million $1,315 million
85% -$27 million $380 million $789 million $1,198 million
80% -$73 million $311 million $695 million $1,080 million
Table 4. Estimates of Payback Period for selected molybdenum recoveries and molybdenum
price combinations.
Molybdenum Molybdenum oxide price (US$/lb Mo)
Recovery in US$20/lb Mo US$30/lb Mo US$40/lb Mo US$50/lb Mo
Concentrator
90% 10.1 years 2.8 years 1.6 years 1.2 years
85% 12 years 3.1 years 1.8 years 1.3 years
80% 14.2 years 3.7 years 2 years 1.4 years
The preliminary economic assessment ("PEA") is preliminary in nature and
includes inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves.
New Cantech is continuing to assess development options for the Lucky Ship
Molybdenum deposit. New Cantech, since pursuing the stand alone open pit option
at 10,000 tpd that was outlined in the May 2, 2007 news release, has identified
several other mining and milling scenarios for the Lucky Ship Molybdenum deposit. The mining options include a stand alone underground mine; and a
combined `small' open pit and underground mining operation, and the milling
options include on-site and custom milling. The development options are
presented in Table 5.
Table 5. Options to be considered for the development of the Lucky Ship Molybdenum Deposit
Option General Description
Large open pit This option assesses a 10,000 tpd mine and on-site concentrator.
Small open pit This option will assess the development of a smaller 6,000 tpd range open pit
designed to generate less waste rock and reduce waste rock storage
requirements. This open pit would be assessed along with options for:
*Utilizing an on-site concentrator; or
*Utilizing a concentrator located off-site and within an economic haulage
distance of the pit, or
*Utilizing a custom mill and tailings management area.
Small open pit This option will assess the development of a smaller 6,000 tpd range open pit
and U/G mine and underground (U/G) mine. Options for the concentrator would be assessed
as described above.
Underground This option will assess the development of a 6,000 tpd range underground
mine mine without an open pit. Options for the concentrator would be assessed as
described above.
As presented in Tables 1 to 4 inclusive, molybdenum price: molybdenum recovery combinations with a molybdenum price of US$20/lb are not favourable for
this 10,000 tpd option given a long payback and estimated IRR values of less
than 15%.
In contrast, the estimated project internal rate of return (IRR) values for
molybdenum price: molybdenum recovery combinations with a molybdenum price of
US$30/lb, US$40/lb Mo, and US$50/lb are favourable given that on a pre-tax
basis:
- At US$30/lb the estimated payback time line is 2.8 to 3.7 years, and the
IRR ranges from an estimated 25% to 34%;
- At US$40/lb, the estimated payback time line reduces to 1.6 to 2 years,
and the IRR ranges from an estimated 48% to 59%; and
- At US$50/lb, the estimated payback time line reduces to 1.2 to 1.4 years,
and the IRR ranges from an estimated 70% to 84%.
The project is situated in an area with valued ecosystem components. In
consideration of the assessment of the options listed in Table 5 which are to be
assessed over the coming months:
- The siting of waste management areas is a critical aspect of the mine
design at many locations including the Lucky Ship Molybdenum project. The
project development options identified in Table 5 allow for the consideration
of other smaller waste management areas situated to the south, east and north
of McBride Lake, as well as nearby off-site waste management areas, and waste
management areas at custom milling sites.
- The potential for acid rock drainage and metal leaching has only been
assessed on a preliminary basis, and as such this will need to be further
addressed in regards to waste management siting and preliminary design considerations within subsequent assessments.
- Molybdenum recovery rates influence revenues and cash flow. As such,
ongoing metallurgical test work to, in part, improve the understanding of
molybdenum recovery is expected to provide an improved technical basis for
predicting cash flow.
- The Howe "revised" resource estimate of May 1, 2007 was based on the 2006
database, due to the fact that there is only at this time an incomplete assay
data set available from the Phase 4 - 2007 drilling. The Phase 4 program was
postponed at the end of April, 2007 due to spring break-up conditions on the
property. The Phase 4 (2007) drilling is expected to be reactivated just
before the end of June, 2007. The program will continue in the interest of
providing information and data to enable some of the inferred mineral resource
to be reclassified, to the extent possible, to the indicated or measured
resource categories.
- Once the complete 2007 assay data set is available, it is part of the
current work plan that the Howe mineral resource be revised to incorporate the
additional drilling and assay information. Howe will regenerate a new block
model resulting in calculation of a new mineral resource. New Cantech is aware
that inferred resources cannot be used in a NI 43-101 compliant
pre-feasibility study and, therefore, is presently conducting its 2007 Phase 4
drilling program, for the purpose of attempting to reclassify the inferred
resources to either indicated resources or measured resources.
Qualified Person
David Orava, M.Eng., P.Eng. Associate Mining Engineer for A.C.A. Howe International Limited is a NI 43-101 Qualified Person and has reviewed and
approved the disclosure above relating to the Preliminary Economic Assessment.
About New Cantech
New
Cantech is a TSX Venture company focusing on the development of its Lucky Ship
Molybdenum Project in northern British Columbia. In addition to the Lucky Ship
Project, New Cantech is pursuing other related mineral projects that may be
beneficial to shareholders.
For more information please contact Dalton B.
DuPasquier, President & CEO of New Cantech Ventures Inc., at (604) 541-7288
or visit Cantech's website at http://www.newcantech.com.
ON BEHALF OF THE
BOARD OF DIRECTORS
"James Jacuta", Chairman
NEW CANTECH VENTURES
INC.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of the information
contained herein.
For
shareholder enquiries contact:
John R. Chalcraft, ProActive Communications
#201 - 2383 King
George Hwy., White Rock, BC, V4A 5A4
Local: (604) 541-1995;
Toll free: 1 (800) 540-1995
email: johnchalcraft@shaw.ca