After-Tax NPV (8%) Of €190M And 20 Year Mine Life
Strategic Resources Inc.(TSXV: SR) has received positive results from the Preliminary Economic Assessment (PEA), prepared for its 100%-owned Mustavaara Vanadium Project in Finland.
CEO and Director, Scott Hicks, said the PEA outlines a long-life economic project in current market conditions.
“I am extremely pleased that we have demonstrated the ability for this brownfield project to come back into production in the future,” Mr Hicks said.
“Management will now turn its focus to engaging with Finnish authorities on the existing permits held by the previous owner that require transferring and extension, key environmental monitoring work and evaluating moving to a pre-feasibility study.”
Preliminary Economic Assessment Summary
The PEA, initiated in late 2020, was produced by a team of independent consultants that possess extensive expertise in their respective fields. Further details on the contributors can be found in the Qualified Persons section of this news release.
The PEA’s highlights include the following estimates:
- Life of mine (LOM) average annual production of 4.6 kt of FeV80
- LOM average annual co-product production of 329 kt of pig iron
- 20.25-year mine life
- 10,400 tpd processing operation over the life of mine
- After-tax NPV (8%) and IRR of €190 million and 12.2%
- Average all-in sustaining co-product cash costs of €15.2 /kg FeV80 and €210.7/t pig iron
- LOM revenue mix of 46.7 % FeV80, 50.8 % pig iron and 2.6 % other by-products
- Initial capital costs of €597 million
- Life of mine sustaining capital and closure costs of €94 million
The PEA report recommends advancing to a pre-feasibility study on the Project, which would require approximately €1.4M euros and include additional hydrological, comminution, metallurgical and engineering work. Prior to commencing such work, Strategic will engage with local authorities on the existing permits held by the previous owner and assess key environmental monitoring programmes.
Mining and Processing Facility
The PEA contemplates large-scale open pit mining using a 100% owner operated equipment fleet. Mine production and mill feed schedules were estimated from the phase resource tabulations using a declining cut-off grade strategy to maximise net present value for a processing rate of 10.4 ktpd. Pit limiting floating cone shells used to develop the mine plan were based on US$25.50/kg FeV80 price and US$340/t pig iron prices.
The ferrovanadium production process consists of a concentrator plant at the Mustavaara site and smelter / hydrometallurgical plants in Raahe. The concentrator plant process is based on crushing, two-stage grinding and multi-stage magnetic separation to produce iron/vanadium concentrate. The concentrate would then be transported approximately 250 km to Raahe using trucks.
Direct smelting and selective oxidation are used to bring vanadium to a suitable form (vanadium slag) to act as a feed material to the roast-leach process. Pig iron is produced as a co-product of the smelting process.
A roast-leach process is used to produce vanadium pentoxide (V2O5) from vanadium slag. Vanadium pentoxide is then fed into an aluminothermic reduction to produce the final product, ferrovanadium (FeV80). Possible by-products include sodium sulphate, TiO2 slag and Ca-Al Slag.
