Avanti Mining Inc. (TSXV:AVT) released the results of an update to the 2010 NI 43-101 compliant Feasibility Study on its Kitsault Molybdenum property in BC and the report will be filed on SEDAR. Roundy Creek yielded an Indicated Mineral Resource of 1.94 million tonnes grading 0.109% Mo at the Sunshine and Sunlight Areas containing 4.7 million pounds molybdenum, and an additional Inferred Mineral Resource of 0.33 million tonnes grading 0.079% Mo for 0.6 million pounds of molybdenum and Bell Moly yielded an Inferred Mineral Resource of 109.7 million tonnes grading 0.048% Mo containing 115.8 million pounds of molybdenum.
As quoted in the press release:
- Initial capital costs including working capital are estimated at $938 million and LOM sustaining capital at $ 106 million (+/- 15% accuracy);
- Cash operating cost at the mine site are estimated at $6.65 per pound of Mo produced, but it drops to $5.73 per pound of Mo (US$ 5.33), after a by-product silver credit of $0.91 per pound of molybdenum is realized. Total cash cost including transportation and beneficiation would be $6.73 (US$ 6.26) per pound of Mo.
- The new mine plan based upon an updated resource model developed in 2012 calls for a total of 228 million tonnes of proven and probable reserves grading 0.083% molybdenum and 5.0 g/t silver to be mined over a 16-year mine life, producing 374 million pounds of molybdenum and 14.4 million ounces of silver. The molybdenum grade to the mill over the first five years of production averages 0.103% Mo;
- At a long term molybdenum price of US$14.50/lb, that approximates the 3 year trailing average price, the project has an after tax Net Present Value (NPV) at an 8% discount rate of $433 million and a 16.6% IRR.
Avanti Mining Inc. President and CEO, Craig J. Nelsen said:
The project continues to show robust economics despite the sharp industry-wide rise in capital and operating cost. In fact, Kitsault’s projected cash costs are in the lowest quartile of primary molybdenum producers worldwide. We are fortunate to have been able to add silver by-product revenue to help offset the increased operating costs. Initial NI 43-101 resources at the neighboring Roundy Creek and Bell Moly prospects continue to add value to the long term reserve expansion possibilities of the Kitsault property.