Tidbits AIR Abraham Drost's Clean Air Metals Inc. (AIR) took a big hit following an early morning halt, falling 6.5 cents to 4.5 cents on 28.28 million shares. The collapse followed word that the company has determined that there "will likely be a material reduction in the metal content" at its Thunder Bay North project in Northwestern Ontario. Therefore, it is withdrawing not only its mineral resource estimate, but the preliminary economic assessment upon which it was based.
Shareholders may recall that the now discredited resource listed 14.55 million tonnes indicated at 0.23 per cent nickel, 0.42 per cent copper, 167 grams of cobalt and 3.1 grams of platinum group elements per tonne, plus modest amounts of gold and silver, with another 8.08 million tonnes inferred at lesser grades. Nearly all the resources were within several zones of the Current deposit, and the company warns the deduction is likely to be between 20 per cent and 50 per cent of the metal content.
Mr. Drost, CEO, says that Clean Air began a review of the resource estimates last summer. While results from the Escape deposit, the lesser zone at Thunder Bay North, were in line with the calculation, the results of the review at Current were "unexpected and disappointing" -- sufficiently so that they "may have a material effect on the projected economics of the Thunder Bay North project."
No kidding! Losing up to half the resource from a dream sheet that had proposed a $367-million, 10-year mine running at 3,600 tonnes per day is certain to batter the bottom line, which had projected a discounted net present value of $378-million and an internal rate of return of 30 per cent. So now, Mr. Drost and his crew will await an updated resource estimate before planning their next steps. Suffice it to say that the company and its consultants are "now solely focused on this important work." Yes, of course, but shareholders would undoubtedly appreciate some of that focus directed at explaining what went wrong with the now discredited initial calculation.