Press ReleasesOctober 16, 2012
Wallbridge announces positive results from Pre-Feasibility Study of Broken Hammer Project in Sudbury
Toronto, Ontario - October 16, 2012 - Wallbridge Mining Company Limited (TSX: WM, FWB: WC7) ("Wallbridge") today announced positive results from a prefeasibility study completed on its Broken Hammer copper and platinum group metal project in Sudbury, Ontario. The prefeasibility study was prepared by Genivar Inc. and demonstrates the viability of the project as an open pit mine, with the ore treated at a custom mill facility.
Prefeasibility study highlights
- Estimated Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $8.4 million or $42.60 per tonne of ore
- Estimated total capital costs (CAPEX) for the project of $1.9M
- Estimated pre-tax Net Present Value (NPV) of $6.03M using an 8% discount factor and $3.50USD per pound of Copper and $1,600USD per ounce of Platinum and CAD/USD of 1.00
- Estimated ore production rate of 750 tonnes of Cu-Ni-PGE ore per day similar to the 2011 bulk sample production rate
- Estimated Mine life of 12 months
- Estimated Operating Costs (OPEX) of $131.99/per tonne of ore
"We are very encouraged by the positive results of the prefeasibility study" said Marz Kord, President and CEO of Wallbridge Mining. "The prefeasibility suggests that the Broken Hammer project has the potential to become economically viable and generate positive cash flow. What's more encouraging is that the deposit remains open for expansion to the west and to depth".
Mr. Kord added, "The footwall-style Broken Hammer project is in a large land package on the northern rim of the Sudbury basin within a 9-kilometer strike length of very similar geology with extremely strong prospects."
Broken Hammer Project Description
The Broken Hammer project is planned to be an open pit operation used for the extraction of approximately 196,000 tonnes of in-pit Cu-Ni-PGE mineral resources utilizing the services of surface mining contractors. The ore is planned to be sampled for metal accounting through a sample tower on-site prior to being transported to an off-site facility for processing. The prefeasibility study assumes the production will commence in early to mid-2013 and will be completed within 12 months of mining operation at an average daily rate of approximately 750 tonnes of ore during the 12-months of operation.
Summary of the Broken Hammer Updated Mineral Resource Estimate
An updated resource estimate prepared by Roscoe Postle Associates Inc. ("RPA") according to NI43-101 standards was filed as a technical report on the property on August 1, 2012.
Table 1: Updated mineral resource estimate, with an effective date of July 27, 2012
|BROKEN HAMMER MINERAL RESOURCE|
|Category||Tonnes||Cu (%)||Ni (%)||Pt (g/t)||Pd (g/t)||Au (g/t)||Ag (g/t)|
As part of the prefeasibility study, RPA prepared an in-pit mineral reserve estimate based on a global mining recovery of 95% and 5% dilution (at zero grade). Table 2 below summarizes the in-pit reserve.
Table 2: Mineral Reserve estimate
|BROKEN HAMMER MINERAL RESERVES|
|Category||Tonnes||Cu (%)||Ni (%)||Pt (g/t)||Pd (g/t)||Au (g/t)||Ag (g/t)|
|Waste Rock||1,710,770 tonnes|
Summary of Capital Cost Estimates (CAPEX)
The total capital cost to build the Broken Hammer open pit is estimated to be $1.9M. Specific details are as follows:
|Category||Capital Cost ($K)|
|Contingency @ 15%||250|
Summary of Mine Operating Cost Estimates (OPEX)
The total mine operating cost including G & A and start-up development, all processing facility charges and penalties and 1.5% royalty are estimated to be $25.95 million, which represents $131.99 per tonne of ore. Specific details are as follows:
|Mine Operating Costs||$/Tonne||$/Tonne|
|Drilling/ Blasting / Loading & Hauling||$8,334,000||$4.37||$42.39|
|SUB-TOTAL MINING (DIRECT)||$4.37||$42.39|
|General & Administrative||$1,263,000||$0.66||$6.42|
|Crushing & Sampling||$2,162,000||$1.13||$11.00|
|Haulage to custom mill||$1,965,000||$1.03||$10.00|
|TOTAL MINING & TRANSPORTATION COSTS||$7.19||$69.80|
|Milling, Smelting, Refining Costs & Charges||$12,227,000||$6.41||$62.00|
|TOTAL PROCESSING COSTS||$6.41||$62.19|
|TOTAL OPERATING COSTS||$13.60||$131.99|
Economic Analysis & Sensitivity
The parameters used for the prefeasibility study are as follows:
|Metal||Price ($)||Mill Recovery (%)|
The 12-month project generates an EBITDA of $8.4M and a pre-tax Net Present Value (NPV) of $6.03 M discounted at 8%. The payback period would be 8.0 months. Below are the details of the economic analysis:
|Crushing & Hauling||3,933,000||20.00|
|Milling, Smelting, Refining & other charges||12,227,000||62.19|
|PROFIT BEFORE ROYALTY||$8,682,000||$44.16|
|Royalty @ 1.5%||307,000||1.56|
The sensitivity analysis on the base case pricing scenario uses variations of +/- 15% from the base case in revenues for copper, platinum, and other factors that could have a significant effect on the project. Below is the sensitivity analysis chart for the Broken Hammer project based on the variations in those significant parameters:
The project is most sensitive to US/C$ exchange rate as well as project operating costs.
Cautionary Notes regarding the prefeasibility study
The Broken Hammer pre-feasibility study was prepared to broadly quantify the Broken Hammer deposit's capital and operating cost parameters, and to further the development of this footwall-style Cu-Ni-PGE project. It was not prepared for use as a valuation of the Broken Hammer deposit, nor should it be considered to be a final feasibility study. The information contained in the Broken Hammer pre-feasibility study reflects various technical and economic conditions at the time of writing and is based on the successful results of the 2011 bulk sample. These conditions can change significantly over relatively short periods of time. The achievability of life of mine plans, budgets and forecasts are inherently uncertain. There can be no assurance that the potential results contained in the Broken Hammer pre-feasibility study will be realized. Readers are cautioned that the assumptions used in the preparation of the Broken Hammer pre-feasibility study, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on them.
Qualified person for the Broken Hammer updated resource estimate is Mr. Bruce Churchill, P. Geo., who prepared the 2012 updated resource estimate contained in the prefeasibility study for Broken Hammer Project filed August 2, 2012 referenced herein. Mr. Churchill is a Qualified Person under NI43-101 and is independent of Wallbridge. Qualified Person for the Broken Hammer prefeasibility study, the main subject of this disclosure, is Mr. Rod Doran, P. Eng. of GENIVAR.
In addition to the Qualified Persons responsible for the preparation of the above referenced technical report, Mr. Alar Soever, P. Geo., Executive Chairman for Wallbridge Mining, has acted as Qualified Person, as defined by NI43-101, concerning the exploration portion of this disclosure and Mr. Marz Kord, P. Eng., President & CEO for Wallbridge Mining, has acted as Qualified Person regarding the engineering and economic portions of this disclosure. Both Mr. Soever and Mr. Kord are employees of Wallbridge Mining, thus are not independent.
GENIVAR, through its combination with WSP, is one of the world's leading professional services firms, working with governments, businesses, architects and planners and providing integrated solutions across many disciplines. The firm provides services to transform the built environment and restore the natural environment, and its expertise ranges from environmental remediation to urban planning, from engineering iconic buildings to designing sustainable transport networks, and from developing the energy sources of the future to enabling new ways of extracting essential resources. It has 14,500 employees, mainly engineers, technicians, scientists and architects, as well as various environmental experts, based in more than 300 offices, across 35 countries, on every continent.
RPA is a group of technical professionals who have provided advice to the mining industry for nearly 30 years. During this time, RPA has grown into a highly respected organization regarded as the specialty firm of choice for resource and reserve work. Their portfolio of customers includes clients in banking, government, major mining companies, exploration and development firms, law firms, individual investors, and private equity ventures.
About Wallbridge Mining
Wallbridge Mining Company Limited (WM:TSX) is an established metals company working to build sustainable growth for investors through discovery and development of mineral resources.
Wallbridge specializes in nickel, copper, platinum, palladium and gold projects in mining friendly jurisdictions of North America, with a particular focus on Sudbury, Ontario. Wallbridge's position in Sudbury offers unique large-scale discovery upside in Canada's premier mining district.
Wallbridge has a record of generating high potential projects and financing exploration through joint ventures or spin-out companies. Wallbridge has 48 exploration to pre-feasibility stage mineral projects. These include 12 joint ventures with partners Impala Platinum Holdings Limited, Lonmin Plc, Xstrata Nickel and a number of junior mining companies.
Wallbridge also holds significant equity interests in spin-out companies Duluth Metals Limited (DM:TSX) and Miocene Metals Limited (MII:TSV).
For Further Information
Please visit the Company's website at www.wallbridgemining.com, or contact:
Wallbridge Mining Company Limited
Joshua Bailey, M.Sc., P.Geo
Vice President, Exploration
Tel: (705) 682-9297 ext. 240
Email: [email protected]
Director of Corporate Communications
Tel: (705) 682-9297 ext. 263
Email: [email protected]
This document may contain forward-looking statements relating to operations of Wallbridge or its subsidiaries or to the environment in which they operate. Such statements are based on operations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and may be beyond Wallbridge's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in forward-looking statements, including those set forth in other public filings. In addition, such statements relate to the date on which they are made. Consequently, undue reliance should not be placed on such forward-looking statements. Wallbridge disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws.