GEOFIN
Geological & Financial 1419 – 133A Street
Consulting Services Surrey, BC V4A 6A2
Tel/Fax 604-541-9161
COST ANALYSIS – STARFIELD RESOURCES’ FERGUSON LAKE PROJECT.
With the resource estimate approaching the 25 million tonne limit and the tenor of the ore remaining remarkably consistent GeoFin Inc has prepared this informal cost estimate for the management of the company to use as a guideline as it moves the project beyond the exploration stage into the development and pre-feasibility stages. It is based on the data available and is set out as a guideline for further work, which will be able to continue to confirm the economic viability of the project.
These preliminary estimates are based on existing and proposed mining operations in northern Saskatchewan, Nunavut, Northwest Territories, Southwest Australia and Labrador for a few of the localities.
CAPITAL COSTS (Cdn$)
PROCESSING $ Cdn millions
Mill designed for 2500 tonnes per day with capacity to increase to 4500 tonnes per day $18 - $22
Administration offices, laboratory, living quarters, $5
Power plant generation $25
Infrastructure for Mine site; insulated durable. $10
Tailings impoundment roads construction
Upgrading contingency $15
TOTAL PROCESSING $73-$78 Million
MINING $ Cdn millions
Shaft to 500 metres depth with capacity 2500 tonnes per day and ability $15
to sustain 4500 tonnes per day
Mining Equipment Repair shops set up Underground $ 5
Preparation of open pit pre mining stripping $2.5
Mine Administration offices, $0.5
TOTAL MINING $23 Million
OTHER MINING RELATED COSTS $ Cdn millions
Road Access 140 kilometres to Baker Lake $500,000 per 1.6 kilometres $45
Contingency 25 % $36
TOTAL OTHER $81 Million
TOTAL CAPITAL COSTS ($Cdn) $177-$181 Million
These total capital cost do not take into consideration any Government assistance in creating the needed infrastructure to construct and operate an operation in this new territory.
The plan would be to mine and mill year round cat-train or truck the mill concentrate ore to the Baker Lake for transhipment to the best smelter return by ocean freighter during the 4 month shipping season. This is basically what Nanisivik mine does for its northern Baffin Island Operation.
Capital Cost comparison: Foran Mining $100 million 2500 tonne per day operation
Voisey Bay Mining $750 million 6000 tonne per day operation
OPERATING COSTS (US$)
MINING $US per tonne of ore
Open pit operations Contract mining for 400K tonnes of ore 1,600K of waste $10
to sustain 2500 tonnes per day for half a year $2 per tonne moved
Mine Administration surveying etal included.
TOTAL MINING per Tonne Ore open pit $10.00
Underground operations for 450K tonnes of ore year 1; 1 million tonnes thereafter $20
Waste estimated at 1:8 cost estimate includes
Mine Administration surveying etal included
TOTAL MINING per Tonne Ore Underground $20.00
PROCESSING $US per tonne of ore
Milling 2500 tonnes per day $10
Administration offices, laboratory, living quarters, $2.5
Power plant generation $4
TOTAL PROCESSING per Tonne Ore $16.50
SMELTING $US per tonne of ore
Trucking Concentrate 50 tonnes of concentrate per day storage & shipping $3.90
Estimated tonnes of concentrate 150,000 annually $25
TOTAL SMELTING per Tonne Ore $28.90
OTHER MINING RELATED COSTS $US per tonne of ore
Head office overhead $0.50
TOTAL OTHER $0.50
TOTAL OPERATING COSTS per Tonne Ore Open Pit $55.90
TOTAL OPERATING COSTS per Tonne Ore Underground $65.90
Operating Cost comparison(US$): Nanisivik Mines $37 per tonne mining 2200 tonne per day operation all
in; including Smelting cost estimated at $64 per tonne all in.
Lupin Mine – Echo Bay Mining $72 per tonne all in cost 1500 tonne
per day operation
PROFITABILITY ANALYSIS
At 1 million tonnes per year milling (just over 2700 tonnes per day)
. $US .
Profit per tonne Annually .
Value per tonne of Ore – High Grade Core $120 $54.10 $54.1 million
Current resource estimates suggest 4.5 years of operation. Payback of Capital Costs ($180Million Cdn: US$ 118 million) in just over 2 years
Value Per Tonne of Ore – Run of Mine $103 $37.10 $37.1 million
Current resource estimates suggest 18 more years of operation
Or a total profit of $711 million US ($1.1 Billion Cdn) at current prices after capital payback.
Value of ore takes in no credit for cobalt, with prices Copper $0.82; Nickel $3.50; Palladium $778 Platinum $595.
A basic IRR calculated on the above cash flows is: 41%
A net present value per share at a 20% discount rate is $4.61 per share Cdn$ |
