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Northern Graphite Updates Project Economics With Current Commodity Prices and Exchange Rates
Ottawa, Ontario--(Newsfile Corp. - February 28, 2018) - Northern Graphite Corporation (TSXV: ...
About this update from Northern Graphite Corporation
[{"type":"text","content":"Northern Graphite Updates Project Economics With Current Commodity Prices and Exchange RatesOttawa, Ontario--(Newsfile Corp. - February 28, 2018) - Northern Graphite Corporation (TSXV: NGC) (OTCQX: NGPHF) (the \"Company\") is pleased to provide updated financial metrics for the Preliminary Economic Assessment (the \"PEA\") on the Company's 100% owned Bissett Creek graphite project (the \"Project\"). The PEA used a weighted average concentrate price of US$1,800/t and a CDN/US dollar exchange rate of 1.05, which reflected market conditions at the time, as well as an 8% discount rate. The CDN/US dollar exchange rate has subsequently increased to approximately 1.25 while the US dollar graphite price has declined. The net effect is a 10% increase in the weighted average Canadian dollar price that the Company would realize for its concentrates. Based on this change only, the Project has a pre-tax internal rate of return of 30.3% (25.4% after tax) and a pre-tax net present value of CDN$292.5 million (CDN$192.2 million after tax) using an 8% discount rate. Cash operating costs over the first 10 years of operation are estimated at US$547/t using current exchange rates. For the purpose of this analysis, no change has been made to capital or operating cost estimates. The Company has engaged GMining Services Inc. to update costs and review other technical parameters with respect to the Project and those results will be released when available. The PEA is based on Measured and Indicated resources only which have not changed. Mineral resources that are not mineral reserves do not have demonstrated economic viability.The Company's PEA envisions developing the Project in two phases. Phase 1 will consist of building a mine and plant capable of producing over 20,000 tonnes of graphite concentrate per annum at an initial capital cost of CDN$101.5 million (US$81.2 million at current exchange rates). A full Feasibility Study was filed by the Company with respect to the Phase 1 development. The PEA, which was subsequently filed in late 2013, includes a second phase which involves doubling the plant throughput after three years of operation and increasing production to an average of 42,000tpy over the succeeding 10 years in order to meet the expected future growth in graphite demand. \"Bissett Creek not only has attractive economics at current prices ...