Mineral Resources Increased at Maskwa; PrelimMineral Resources Increased at Maskwa; Preliminary Assessment
2007-01-23 08:30 (New York)
Mineral Resources Increased at Maskwa; Preliminary Assessment
Outlines Profitable Open Pit Mine With 9 Year Mine Life
TORONTO, ONTARIO -- (MARKET WIRE) -- 01/23/07 -- The Board of
Directors of Mustang Minerals Corp., (TSX VENTURE: MUM) today
announced the results of a National Instrument 43-101 compliant
Preliminary Economic Assessment for the Maskwa Property located 150
km northeast of Winnipeg Manitoba. The report was authored by Micon
International Limited, an independent consulting firm, and included
an updated resource estimate based on a grade-block model prepared by
Scott Wilson Roscoe Postle. The projects' economic character was
deemed "robust" by Micon and Mustang has subsequently initiated work
geared towards completion of a feasibility study.
Several of the key findings of the Preliminary Assessment by Micon
are:
- An increased total mineral resource to over 9 million tonnes
enabling a 9 year mine life
- average annual nickel production of 10.4 million pounds of nickel
and 2.4 million pounds of copper in concentrate
- average annual revenues projected to average C$88 million over the
9 year mine life forecast
- estimated initial capital cost of C$64.5 million
- projected total cash flow forecast over the 9 year project life of
C$290 million on a pre-tax basis and C$194 million on an after-tax
basis
- base case assumed nickel price at US $7 and copper price US $2 per
pound
- a forecast life-of-mine open pit strip ratio of 3.7:1
- projected NPV at 10% discount rate of C $90 million
- a projected 2 year payback of invested capital using all pricing
scenarios
- utilization of conventional flotation technology
- assumed life-of-mine cash operating cost per pound of nickel was US
$2.62 per pound.
Mustang is extremely encouraged by the results of the preliminary
assessment. Robin Dunbar President of Mustang stated that "The Micon
report clearly establishes Maskwa as a potentially significant nickel
project in Canada. Our operating focus for Mustang in 2007 will be to
advance the project toward production. In addition Mustang is also
making a renewed commitment to exploration to further enhance the
project economics". Mustang announced on January 16 that a drill
program is underway at the Maskwa Project.
Conceptual Model
All production outlined in the preliminary economic assessment was to
be mined by open pit methods at a processing rate of approximately 1
million tonnes per annum. Material would be hauled to a new
concentrating plant and milled by means of a conventional flotation
circuit. Concentrates would be sold to a smelter on a toll basis. The
Net Present Value and Internal Rate of Return for the project are
outlined in chart form below.