(TheNewswire)
HIGHLIGHTS
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Updated assumptions from the NI43-101 Feasibility Study have increased the Project’s Pre-taxNPV to C$383.1m (previously -C$175.8m) and Post-tax NPV toC$287m (previously - $126.3m)
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The average EBITDA over the mine lifeincreased to C$102m per annum (previously $67.6m); peaking at C$168mduring the fourth year of production
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The Zinc price has increasedsubstantially since the October 2021 Feasibility Study . The fundamentals for sustained higherprices continue to strengthen due to multiple factors, includingzinc’s importance in the renewable energy industry
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The Company is fully funded until aFinal Investment Decision (FID) following the recent C$5.2m capitalraising
May 17, 2022 – TheNewswire - Metallum Resources Inc.(TSXV:MZN) ( “Metallum” or the “Company”) ispleased to announce updated economics for its Superior Lake Zinc andCopper Project (“Project”) in Ontario, Canada. Based on updatedassumptions 1 , the Project’s NPV 8 Pre-tax has increased toC$383m (previously - C$175.8m) whilst the average EBITDA 3 has increasedto C$102m perannum (previously C$67.6m). Image 1illustrates the Project’s Pre and Post tax NPV 8% returns based on a number of zincprice scenarios.
Image 1: NPV 8 under a range of different zinc price assumptions 1,2,4
The significant improvement in prices for the suite ofcommodities produced at the Project (zinc, copper, silver and gold),has driven the Project’s improved returns compared to theFeasibility Study (Table 1 below). Whilst zinc, the major commodityproduced at the Project, price has slightly fallen from its recent a15-year high (US$2.05 / lb) achieved during April 2022, thefundamentals for the sector are extremely positive due to limited newsupply, whilst a significant increase in demand, largely driven by theimportance of zinc in multiple renewable energy industry (EV (electricvehicles), solar power generation and wind energy).
1 - Updated commodity prices: Zn: US$1.65/lb, Cu:US$4.22/lb, Au: US$ 1,845/oz, Ag: US$21.6/oz ; 2 - 8% discounted NPVpre-tax; 3 - Life of mine average EBITDA. Total project EBITDA is$870m; 4 The Feasibility Study was conducted using a Zinc price ofUS$1.22/lb (US$2,700/t), Copper Price of US$3.31/lb (US$7,300/t),Silver Price of US$21.00/oz, and Gold price of US$1,635/oz.
Image 2: Forecasted zinc demand usedon renewables industry 5
5 - Source: CRU, IRENA, Teck
Given the strengthening market fundamentals for theProject, the Company is advancing the Project through a number ofcritical steps prior to making a Final Investment Decision (FID) inthe future. Updates on these initiatives will be released as work isadvanced.
The Company is in an excellent financial positionfollowing the recent C$5.2m capital raising that sees the Companyfully funded until an FID is made. A summary of the key inputs andoutputs in the Feasibility Study and updated returns are highlightedbelow.
Table 1: Updated FeasibilityAssumptions and Outputs
Units | Feasibility Study (Nov 2021) 2 | Updated Assumptions 1 | Change C$ | Change % | |
Average Zinc Production (concentrate) | Tonnes pa | 33,401 | 33,401 | - | - |
Average Copper Production (concentrate) | Tonnes pa | 1,270 | 1,270 | - | - |
Mine Life | years | 8.5 | 8.5 | - | - |
Initial Capex 1 | C$ Million | 145.1 | 145.1 | - | - |
C 1 - Operating Costs | C$ / lb | 0.44 | 0.44 | - | - |
AISC – operating costs | C$ / lb | 0.55 | 0.51 | -0.04 | 7% |
Pre-Tax NPV 8% | C$ Million | 175 | 383 | 207.3 | 118% |
Pre-Tax IRR | % | 26 | 42 | 16 | 62% |
Post-Tax NPV 8% | C$ Million | 126 | 287 | 160.7 | 127% |
Post-Tax IRR | % | 23 | 38 | 15 | 65% |
Payback | years | 2.5 | 2.25 | 0.25 | 11% |
Zn Price | USD/lb | 1.22 | 1.65 | 0.43 | 35% |
Cu Price | USD/lb | 3.31 | 4.22 | 0.91 | 27% |
Au Price | USD/oz | 1,635 | 1,845 | 210 | 13% |
Ag Price | USD/oz | 21.00 | 21.60 | 0.6 | 3% |
1 - Updated commodity prices: Zn: US$1.65/lb, Cu:US$4.22/lb, Au: US$ 1,845/oz, Ag: US$21.6/oz ;
2 - The Feasibility Study was conducted using a Zincprice of US$1.22/lb (US$2,700/t), Copper Price of US$3.31/lb(US$7,300/t), Silver Price of US$21.00/oz, and Gold price ofUS$1,635/oz.
The Feasibility Study dated effective October 13, 2021was prepared by DRA Global Limited, along with contributions fromother prominent engineering companies. Thedetailed technical report is available on SEDAR under the Company’sprofile. The technical report is also available on Metallum’swebsite at metallumzinc.com.
Qualified Person
The news release has been reviewed and approved byAndrew Tims, P.Geo., Exploration Manager of the Company, and aQualified Person as defined by National Instrument 43-101 – Standards of Disclosure forMineral Projects .
ON BEHALF OF THE BOARD
For further information, contact:
Kerem Usenmez, President & CEO
Tel: 604-688-5288; Fax: 604-682-1514
Email: info@metallumzinc.com
Website: metallumzinc.com
Neither the TSXVenture Exchange nor the Investment Industry Regulatory Organizationof Canada accepts responsibility for the adequacy or accuracy of thisrelease.
Cautionary NoteRegarding Forward-Looking Statements
Certain statements contained in thisnews release constitute forward-looking statements within the meaningof Canadian securities legislation. All statements included herein,other than statements of historical fact, are forward-lookingstatements and include, without limitation, statements about theFeasibility Study, the updated economics of the Project, and theCompany’s development plans for the Project. Often, but not always,these forward looking statements can be identified by the use of wordssuch as “estimate”, “estimates”, “estimated”,“potential”, “open”, “future”, “assumed”,“projected”, “used”, “detailed”, “has been”,“gain”, “upgraded”, “offset”, “limited”,“contained”, “reflecting”, “containing”, “remaining”,“to be”, “periodically”, or statements that events,“could” or “should” occur or be achieved and similarexpressions, including negative variations.
Forward-looking statements involveknown and unknown risks, uncertainties and other factors which maycause the actual results, performance or achievements of the Companyto be materially different from any results, performance orachievements expressed or implied by forward-looking statements. Suchuncertainties and factors include, among others, the uncertainties inherent in theFeasibility Study and the updated economics of the Project; whether exploration anddevelopment of the Company’s properties will proceed as planned;changes in general economic conditions and financial markets; theCompany or any joint venture partner not having the financial abilityto meet its exploration and development goals; risks associated withthe results of exploration and development activities, estimation ofmineral resources and the geology, grade and continuity of mineraldeposits; unanticipated costs and expenses; risks associated withCOVID-19 including adverse impacts on the world economy, explorationand development efforts and the availability of personnel; and suchother risks detailed from time to time in the Company’s quarterlyand annual filings with securities regulators and available under theCompany’s profile on SEDAR at www.sedar.com. Although the Companyhas attempted to identify important factors that could cause actualactions, events or results to differ materially from those describedin forward-looking statements, there may be other factors that causeactions, events or results to differ from those anticipated, estimatedor intended.
Forward-looking statements containedherein are based on the assumptions, beliefs, expectations andopinions of management, including but not limited to: the accuracy ofthe Feasibility Study and the updated economics of the Project; thatthe Company’s stated goals and planned exploration and developmentactivities will be achieved; that there will be no material adversechange affecting the Company or its properties; and such otherassumptions as set out herein. Forward-looking statements are made asof the date hereof and the Company disclaims any obligation to updateany forward-looking statements, whether as a result of newinformation, future events or results or otherwise, except as requiredby law. There can be no assurance that forward-looking statements willprove to be accurate, as actual results and future events could differmaterially from those anticipated in such statements. Accordingly,investors should not place undue reliance on forward-lookingstatements.
ABOUT METALLUM RESOURCES
Metallum Resources (MZN.TSXV) owns 100% of the SuperiorLake Zinc and Copper Project in Ontario, Canada. The Project ranksas the highest grade zinc project in North America with a resource of2.35 Mt at 17.9% Zn, 0.9% Cu, 0.4 g/t Au and 34 g/t Ag.
The Company completed a positive Feasibility Study thathighlights the Project will rank in the lowest quartile of operatingcosts (C1 costs – C$0.44 / lb; AISC C$0.51 / lb). These low costsdriven by the high grade of the Project drive robust economic returns.The majority of permits and licenses are in place allowing for a quickre-development following a Final investment Decision.
For further details about the Company and the SuperiorProject, please visit the Company’s website at metallumzinc.com .
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