Mason Graphite Presents Its Updated Feasibility Study Economic Results for the Lac Guéret Graphite Project
Press Release
MONTREAL, Dec. 05, 2018 — Mason Graphite Inc. (“Mason Graphite” or the “Company”) (TSX.V: LLG; OTCQX: MGPHF) presents detailed updated economics for the Lac Guéret graphite project (the “Project”).
On October 25th, 2018, Mason Graphite communicated its new construction budget for the Project in its Corporate and Project update. This new budget is part of a full update of the economics of the Project (“Project Economics”).
Benoît Gascon, President and Chief Executive Officer of Mason Graphite, commented: “As we are completing the detailed engineering, have started receiving equipment and have begun pre-construction work at mine site, we have updated the economics of the project. This update demonstrates, once again, that our project remains financially very robust and is becoming a reality at the dawn of an imminent and unique growth period for natural graphite, driven by the Li-ion batteries and electric vehicles revolution, expected for many years. Furthermore, this does not take into account the potential returns of the value-added and Li-ion battery materials program, another very strong upside potential for our shareholders.”
The technical and financial data was prepared by GoldMinds Geoservices, BBA and Soutex and validated by Qualified Persons, all independent of Mason Graphite.
Project Economics Update Highlights
- No change to the Mineral Resources;
- No change to the Mineral Reserves;
- No material changes to the Project scope (production capacity and process unchanged);
- Updated Capital Expenditures (“CAPEX”), Operating Expenditures (“OPEX”) and Natural Graphite sale prices;
- Updated NPV, IRR and Payback period.
| Main Economic Parameters1 | |
| Initial Mine Life | 25 years |
| Average annual graphite concentrate production and sales (tonnes) | 51,900 |
| Weighed average selling price, FCA Baie-Comeau ($ / tonne of concentrate) | 1,933 |
| Average production cost of graphite ($ / tonne of concentrate) | 484 |
| Total initial CAPEX ($ M) | 258.2 |
| Total sustaining CAPEX ($ M) | 16.9 |
| Rehabilitation costs, both sites ($ M) | 15.8 |
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1 Unless otherwise noted, all monetary figures presented herein are expressed in Canadian dollars. Figures may not add up due to rounding.
| Project Economics | Pre-Tax | Post-Tax | ||
| Total Sales, 25 years ($ M) | 2,506 | n/a | ||
| Cumulative Cashflow, 25 years ($ M) | 1,588 | 977 | ||
| NPV at 8% Discount Rate ($ M) | 484 | 278 | ||
| Internal Rate of Return | 27.7 | % | 21.7 | % |
| Payback Period | 3.7 years | 4.4 years | ||
MINERAL RESOURCES AND MINERAL RESERVES
Using the updated operating costs and updated natural graphite sale prices, GoldMinds Geoservices (“GMG”) verified that the Mineral Resources estimated in 2014 were still valid. Using a revised cut-off grade of 5.75% Cg, the pit constrained Mineral Resources (Measured + Indicated) are now estimated at 65,540,000 tonnes, a change of -0.25% compared to 2014. The average graphite grade remains unchanged at 17.2% Cg.
| Open Pit Mineral Resources | Tonnes | Grade |
| Measured | 19,021,000 | 17.9% Cg |
| Indicated | 46,519,000 | 16.9% Cg |
| Total Measured + Indicated | 65,540,000 | 17.2% Cg |
| Inferred | 17,613,000 | 17.3% Cg |
Since the Mineral Reserves were constrained by the duration of the economic analysis (25 years) and not the Mineral Resources, they remain unchanged at 4,741,000 tonnes (Proven + Probable) at 27.8% Cg.
| Open Pit Mineral Reserves | Tonnes | Grade |
| Proven | 2,003,000 | 25.1% Cg |
| Probable | 2,738,000 | 29.8% Cg |
| Total Proven + Probable | 4,741,000 | 27.8% Cg |
IBF4
