Chieftain Metals Corp. (“Chieftain” or the “Company”) (TSX: CFB) is pleased to announce that it has filed its National Instrument 43-101 Technical Report – 2014 Feasibility Study for the high-grade Tulsequah Chief polymetallic deposit located in north-western British Columbia on SEDAR (www.sedar.com) as well as on the Company’s website (www.chieftainmetals.com). The Feasibility Study includes an updated resource estimate for the nearby Big Bull deposit.
The 2014 Feasibility Study reflects a project with lower capital costs resulting in enhanced projected investment returns, notwithstanding the lower annual production relative to the prior 2012 Feasibility Study. Additionally, this operating profile preserves all the growth potential and is expected to allow Chieftain to use funds for project expansion out of future cash flow. Chieftain previously announced the results from this study, summarized below, on October 20, 2014 (see October 20, 2014 press release):
(all amounts in Canadian dollars unless stated otherwise)
• 1,100 tonne per day underground mining operation with an 11-year mine life.
• Reserves of 4.4 M tonnes of which 684 K tonnes, (15%) are proven and are the higher-grade portion of the 6.4 M tonnes previously reported in the 2012 Feasibility Study.
• Base Case price deck for metals and foreign exchange based on spot prices at October 15, 2014.
• Operating costs are estimated to average $186 /tonne processed including concentrate shipment.
• Annual Zinc Production of 46.9 million pounds (lbs) at a C1 cash cost of zinc production (net of by-product credits) of negative ($0.25)/lb.*
• Use of conventional barging for five months of the year to transport concentrate and supplies. This logistical solution eliminates the road proposed in the 2012 Feasibility Study, saving $125 million in capex.
• Pre-production capital costs are estimated at $198.6 million including contingency.
• The 2014 Feasibility Study yields a pre-tax Net Present Value (NPV8%) of $212 million and an IRR of 25.1% and post-tax NPV8% of $146 million and an IRR of 21.8%.
* C1 Cash cost of zinc production is calculated by taking the life of mine operating costs and the off-site costs to produce all metals, minus the revenue generated by all produced metals excluding zinc, divided by the total pounds of zinc produced.
Victor Wyprysky, President and CEO commented: “We are pleased to deliver the completed feasibility study report demonstrating robust economics for the Tulsequah Chief project. We are now evaluating options to secure project financing.”