Sep. 4, 2012
Toronto, Ontario, September 4, 2012. Noront Resources Ltd. (“Noront” or the “Company”) (TSX Venture: NOT) is pleased to announce the results of an updated National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) compliant Feasibility Study (“FS”) for a stand alone nickel, copper, platinum group element (“Ni-Cu-PGE”) mine and mill complex exploiting the Company’s 100% owned Eagle’s Nest deposit (the “Project”), McFaulds Lake, James Bay Lowlands, Ontario. The results of the independent study, completed by Independent Consultants1 under the supervision of Micon International (“Micon”), confirms that Eagle’s Nest offers robust economics.
FEASIBILITY STUDY HIGHLIGHTS:
A Discounted Cash Flow (“DCF”) based on the Assumed Metal Prices2 indicates:
•an after tax Net Present Value at an 8% discount rate (“NPV(8%)”) of $543 million;
•an after tax IRR exceeding 28%;•an estimated initial capital investment of $609 million;
•an estimated life of mine sustaining capital cost of $160 million;
•estimated operating costs (including road access fees) of $97 per tonne or $2.34 per pound of nickel equivalent or -$0.31 per pound of nickel net by-product credits;
•an estimated mine life of 11 years; and
•a capital payback period of under 3 years based on a 100% equity project.
Wes Hanson, CEO of Noront states: “The decision of the Province of Ontario to financially support the north-south road corridor pending certain approvals is a very positive development in unlocking the mineral wealth of the Ring of Fire. Our discussions with the Province have confirmed that the all-season road will be accessible to all industrial users including Cliffs and that the costs to use the road will be based on proportional usage, a critical consideration for Noront as our concentrate shipments represent less than seven percent of the currently identified ore haulage along the corridor.”
Mr. Hanson adds: “We are currently focused on site work in advance of project development as we evaluate opportunities to finance project construction. Analysts are predicting a nickel price rally in 2015 and 2016 as demand outstrips supply. This timing matches the planned start of production at Eagle’s Nest. With nickel production costs in the lowest quartile of existing and planned nickel producers and limited capital costs, Eagle’s Nest remains one of the most exciting opportunities in the nickel sector today.”
ALL-SEASON ROAD ACCESS:
In a letter dated August 10, 2012, Ontario’s Ministry of Northern Development and Mines (“MNDM”) advised Noront that the Province was in early stage discussions with Cliffs Natural Resources regarding a north – south all-season road that would connect the Ring of Fire to existing provincial infrastructure. The letter confirmed the Province’s intent to contribute financially to develop the proposed all-season road subject to various environmental, regulatory and financial approvals.
MNDM advised Noront that “the current expectation is that the all-season road would be made available for use by industrial users other than Cliffs, with access fees generally based on proportional road usage, although specific terms are still to be determined.”
Details on the estimated capital costs of the proposed north-south road have not been provided to Noront. However, Cliffs has publically stated that the cost of their proposed integrated transportation system is budgeted at $600 million. This cost is consistent with previous work completed by Noront on this alternative and was used as the basis to establish road usage costs in the feasibility study.
In developing the DCF model for the project, Noront has assumed that concentrate shipments from site and supply shipments to site would be subject to a toll charge. On a proportional usage basis, Noront estimates that concentrate shipments represent less than seven percent of the total ore haulage along the road corridor. The Feasibility Study has assumed a toll representing 12.5% of the total road cost which includes capital, interest and maintenance costs.
PROJECT DESCRIPTION:
The Project Description is as follows:
•1.0 million tonne per year throughput rate, producing approximately 150,000 tonnes of high grade nickel-copper concentrate per annum;
•A proven and probable mineral reserve of:
For the rest of this news release, please go to the Noront website: http://www.norontresources.com/News/PressReleaseDetails/308