VYYRF - Voyageur Pharmaceuticals Announces IRR of 137% and NPV of $344 Million from Preliminary Economic Assessment for the Frances Creek Pharmaceutical Barium Project

(TheNewswire)

News Release – Calgary, Alberta - TheNewswire – January 11, 2022 - Voyageur Pharmaceuticals Ltd. (“ Voyageur ” or the“ Company ”) (TSXV:VM) is pleased to announce the results of itsPreliminary Economic Assessment (“PEA”) for the development of itsFrances Creek pharmaceutical barium sulfate project (the“Project”), located in British Columbia, Canada. The PEA wasprepared by SGS Geological Services (“SGS”). The effective date ofthe PEA is January 11, 2022 and a technical report relating to the PEAwill be filed on SEDAR within 45 days of this news release. Allvalues are in Canadian dollars.

Economics

The base case economics for the Project, indicates apre-tax net present value (“NPV”) of $464 million CAD and internalrate of return (“IRR”) of 168%, while the post tax NPV is $344million CAD with an IRR of 137% at a discount rate of 8%. The Projectassumes a pre-production period of 2 years for equipment delivery andinstallation, and mine permitting. The payback period under the basecase is 11 months.

Based on current shares issued and outstanding, the NPVafter tax = $3.38 per share (fully diluted share value = $2.59 pershare).

Processing products include the following:

• Smooth X

• Barium Sulfate 98% HDX

• Barium Sulfate 96% LDX

• MultiXThick

• MultiXThin

• Bulk Product

• BaSO Drill Product

Current pricing of 97.5% BaSO 4 available from Chinahas a delivered price of $4,760 USD per tonne, or $5,960 CAD pertonne. This pricing is used for bulk sales of BaSO 4 , that are not used in the manufactureof pharmaceutical products. Voyageur’s product has a higher qualityof 98.3% BaSO 4 and pricing in thePEA is based on 97.5% BaSO 4 product. The BaSO 4 product rejected for the Company's manufacturing processwill be relatively high-quality Barite, which is assumed to besuitable for drilling fluids products and is assumed to be sold asdrilling grade barite in bulk to the Alberta energy industry.

Resource Model

For the mineral resource estimation, SGS relied upondata that Voyageur supplied in pdf, xlsx and other formats. The finaldatabase contains 57 drillholes and 3 channels totalling 3,106.12 m.The length of the channels ranges from 2.5 to 8.4 m and the drillholesrange from 18.29 to 122.53 m in length. There are 169 assays varyingfrom 0.15 to 18.3 m in length and from 0.22 to 99.09 %BaSO 4 , and there are 100lithology intervals.

Voyageur provided SGS with a three-dimensional lidartopography. The verification of the surface shows a great accuracy.The site visit indicated that the overburden was estimated to be 2mdeep in most places. Therefore, a depth of 2m vertical was applied forthe entire project for the overburden.

The 2003-2017 drilling was used to make a 3-dimensionalmineralisation model.  A total of 3 volumes were modelled and namedA, B1 and B2.

A block model was then created and estimated by InverseDistance squared (IDS) using calculated composites of about 2.5 m butwith the avoidance of remainders by slight adjustments in thecomposite lengths. Capping was found to affect minimally the resourceresults. Nevertheless, samples of more than 5 m in length got theirgrades reduced by 10% to reduce the risk related to these longintervals. The global impact is a reduction of the grade by about 5%.The block size used was 5 x 5 x 5m. Block fractions were used so theblocks have a “percent block” variable between 0 and 1 to accountfor incomplete blocks partly inside the mineralized volumes. Similarestimation parameters were used for the 3 estimation passes: minimumnumber of samples: 3, maximum number of samples: 5, maximum number ofsamples per drillhole: 2. There were 3 successive estimation passeswith “variable orientation” search ellipsoids: pass 1 with asearch ellipsoid of 20 x 20 x 5m, pass 2 with a search ellipsoid of 40x 40 x 10m; and pass 3 with a search ellipsoid of 80 x 80 x 30m. Hardboundaries were used for all 3 solids.

Because of the small deposit and the high value of theBarite, the 2 pits were not optimized using a pit optimizer. The pitdesigns were created around the mineral volumes. The followingassumptions were used to estimate a cut-off grade of 10%BaSO 4 .

The specific gravity used for the mineralized materialis based on the BaSO 4 grade using the following formula: SG = 2.828 +0.0000009404*(BaSO 4 )3 -0.000030963*(BaSO 4 )2 +0.010623107*BaSO 4 thatfits

very well with the 87 measurements from 2017. Theformula also fits reasonably well with the 82 measurements from 2003and 2005.

The resources are shown in the tablebelow:

Click Image To View Full Size

(1)        Effective date for resources is January11, 2022.

(2)        The independent QP for this resourcesestimate is Yann Camus, P.Eng., SGS Geological Services.

(3)        The base case is reported at a cut-offgrade of 10% BaSO 4 .

(4)        Open pit mineral resources are reportedat a base case cut-off grade of 10% BaSO 4 within a conceptual pit shell.Cut-off grades are based on a barite price, barite mining andprocessing recovery and mining and processing cost.

(5)        The resources are presented in-situ andwithout dilution.

(6)        Block fraction was applied to themineral resources.

(7)        Mineral resources that are not mineralreserves do not have demonstrated economic viability . The quantity and grade of reportedInferred Resources in this Mineral Resource Estimate are uncertain innature and there has been insufficient exploration to define theseInferred Resources as Indicated or Measured. However, based on thecurrent knowledge of the deposits, it is reasonably expected that themajority of Inferred Mineral Resources could be upgraded to IndicatedMineral Resources with continued exploration.

(8)        This Resource Estimate has been preparedin accordance with CIM definition (2014).

(9)        The density used for each block is basedon grade and the following formula:

2.828+(0.0000009404*(BaSO 4 )3) - (0.000030963*(BaSO 4 )2) + (0.010623107* BaSO 4 )

(10)        A variable BaSO 4 capping grade was used by removing10% of the grade on assay with lengths >5 m and resulting in anoverall reduction of 5% of the barite content.

(11)        Total may not add due torounding.

Quarry

The Project has a very small environmental footprint atthe quarry site. Management has moved forward to create a project thatlimits environmental issues. Voyageur has eliminated tailing ponds,reduced water consumption, designed a quarry and concentrateprocessing site that uses minimal land and low land disturbance to thearea. Mining will be seasonal, and work will continue to expand theresource. The PEA economics are based on quarry operations on the Bzone. Voyageur has resource below the B zone at the A zone. Voyageurwill be expanding its exploration program after positive cash flow tocontinue to expand the Project.

Capital & Operating Costs

Capital and operating costs for both the mine andprocessing facilities were developed based on first principalcalculations, factored estimates, project benchmarking, vendor quotesand conceptual scheduled production/equipment hours where available. The qualified persons have reviewed these costs and concluded they are reasonable for inclusion in the PEA.Capital and operating costs are estimated within +/- 40% at aPreliminary Economic Assessment level of accuracy. Process capitalcosts include a 15% contingency, while mining costs are based oncurrent rental quotes, contractor rates and first principalcalculations.

Mining and infrastructure costs, as well as primaryprocessing of the BaSO 4 product was conducted by SGS, while capital and operating costs forthe pharmaceutical products was provided by Alberta VeterinaryLaboratories (“AVL”).

A summary of Mine and Process capitalcosts are presented in the Table below.

Sensitivities

Figures show the results for the base case for post-taxNPVs.

Click Image To View Full Size

A sensitivity analysis was conducted on capital costs,operating costs and revenue in 10% increments from 60% of base valuesto 140% of base values (+/- 40%). Results indicate that any scenariowithin this large range still produce strong NPVs.

Brent Willis, CEO of Voyageur, stated: “We are pleased to have delivered a positive PEA for the FrancesCreek Project that has the potential to be one of the highest puritynatural barium projects in the world. Barium Sulfate is a critical andstrategic mineral for North America, our plan to fully integrate thebarium radiology contrast market will be essential to providinglow-cost pharmaceuticals and secure supply chains to market. Theresults of the PEA reveal the Frances Creek Project demonstratesrobust economics and low initial CAPEX via a staged developmentscenario to fully integrate the barium contrast drug and devicemarket. The SGS report establishes a path forward to allow Voyageur tobecome a competitive force, utilising our low cost barium to become amarket leader. The fullyintegrated team at SGS was critical to pull in all the pieces for ourdynamic project. SGS mining,metallurgical and life science divisions where instrumental to bringtogether all our segments of our fully integrated project. Voyageurnow has a process to upgrade and produce the highest quality bariumsulfate, at a low cost to industry standards. The Frances Creekproject is a stand alone, one of a kind project in the barium sulfateindustry.”

Voyageur Near Term Strategy

Voyageur is currently using third party manufacturingand mineral supplies to develop its first products for market.Voyageur has Health Canada approval on five barium contrast productsand is moving forward with FDA and EU licencing. Voyageur plans togenerate revenue in 2022 utilising AVL's good manufacturing processpharmaceutical manufacturing plant located in Calgary, Alberta. Thefollowing are the planned phased in steps to full integration in thecontrast media market:

• Produce products using third parties

• Build critical mineral active pharmaceutical ingredient(“API”) good manufacturing practice (“GMP”) processing plantand barium Quarry

• Fully integrate the barium contrast market andsupplement revenue with high purity industrial barium sales

• Produce iodine products utilising thirdparties

• Produce iodine products from brine waters with fullyintegrated processing plant from the well head to the bottle

Voyageur is continuing to advance its full integrationof the radiology barium and iodine drug and device market. Managementbelieves Voyageur’s From TheEarth To Bottle strategy has sound economics tocreate high growth and profitability in the near future.

About Voyageur

Voyageur is a Canadian public company listed on theTSXV under the trading symbol VM. Voyageur is focused on thedevelopment of barite and iodine Active Pharmaceutical Ingredients(“API”) and high-performance cost-effective imaging contrastagents for the medical radiology marketplace. Voyageur’s goal is toinitially generate positive cash flow from operations using thirdparty GMP pharmaceutical manufacturers in Canada and internationally.Ultimately, Voyageur has plans to build all the requiredinfrastructure to become 100% self-sufficient with all manufacturing.Voyageur owns a 100% interest in three barium sulphate (barite)projects including the Frances Creek property, suitable in grade forthe pharmaceutical barite marketplace, with interests in a high-gradeiodine, lithium & bromine brine project located in Utah,USA.

Voyageur is moving forward with its business plan ofbecoming the only fully integrated company in the radiology medicalfield, by controlling all primary input costs under the motto of:"From the Earth to the Bottle".

Independent Qualified Persons

The resource estimate was prepared by Yann Camus,P.Eng., of SGS Canada Inc for Voyageur. Marc-Antoine Laporte, P. Geo.,of SGS Geological Services reviewed and approved the scientific andtechnical disclosure of this press release.

Both Mr Camus and Laporte are independent of Voyageurand are “Qualified Persons” as defined by National Instrument43-101.

For Further MediaInformation or to set up an interview, please contact:

BrentWillis

President &CEO

E brent@vpharma.ca

www.voyageurpharmaceuticals.ca

Ron Love

CFO

T403.818.6086

E ronl@vpharma.ca

Neither the TSX Venture Exchange norits Regulation Services Provider (as that term is defined in thepolicies of the TSX Venture Exchange) accepts responsibility for theadequacy or accuracy of this news release.

Cautionary Statement Regarding“Forward-Looking” Information

This news releasemay contain certain forward-looking information and statements,including without limitation, statements pertaining to: the estimatesset out in the PEA including total capital required, capital andoperating costs, equipment delivery and installation period, paybackperiod, operating gross margins, net present value, cash flow, and theresource estimation and grade of the barite; Voyageur generatingrevenue in 2022; the timing and success of penetrating the US andother markets; the timing and success of the Company's productsmeeting various regulatory standards; and the Company's long termplans, including with respect to becoming 100% self-sufficient withall manufacturing. All statements included herein, other thanstatements of historical fact, are forward-looking information andsuch information involves various risks and uncertainties. There canbe no assurance that such information will prove to be accurate, andactual results and future events could differ materially from thoseanticipated in such information. A description of assumptions used todevelop such forward-looking information and a description of riskfactors that may cause actual results to differ materially fromforward-looking information can be found in the Company's disclosuredocuments on the SEDAR website at www.sedar.com. Voyageur does notundertake to update any forward-looking information except inaccordance with applicable securities laws.

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