|By Marketwired .||
|June 24, 2014 09:24 AM EDT||
OTTAWA, ONTARIO -- (Marketwired) -- 06/24/14 -- Northern Graphite Corporation (TSX VENTURE:NGC)(OTCQX:NGPHF) announces that it has updated the Preliminary Economic Assessment (the "PEA") on its 100% owned Bissett Creek graphite project to assess the economics of building a process plant with twice the capacity of the plant contemplated in the Company's Feasibility Study ("FS"). The larger process plant was evaluated due to recent developments in the lithium ion battery industry and strong buyer interest in the extra large flake, high purity concentrates that will be produced using Northern's proprietary purification technology.
The updated PEA indicates that the Bissett Creek Project has very attractive economics even at or below current depressed graphite price levels. The pre-tax internal rate of return ("IRR") is 31.7% (26.7% after tax) and the pre-tax net present value ("NPV") is $264.7 million ($178.9 million after tax) in the base case which is based on an 8% discount rate and a weighted average price of US$1,800/tonne of concentrate which reflects current market conditions.
Development capital costs in the updated PEA have been estimated at $134.1 million (including a 10% contingency) for an operation that will produce an average of approximately 44,200 tonnes of graphite concentrate annually over the first 10 full years of operation. Almost 90% of production will consist of large and extra large flake and battery grade graphite which is by far the highest ratio in the industry. There are also 27.3 million tonnes of Measured and Indicated resources and 24 million tonnes of Inferred resources that are not part of the PEA mine plan and the deposit has not yet been closed off by drilling, all of which indicates that further production expansions are possible.
Gregory Bowes, CEO, commented that: "It has been reported that multiple new graphite mines will be required to supply proposed lithium ion battery manufacturing plants because graphite deposits typically produce a high percentage of non battery grade material, and two thirds of the material that is battery grade is lost in the manufacturing process. However, Bissett Creek may be the only mine that is required to meet market demand due to its very high percentage of battery grade material, lower manufacturing losses and future expansion potential."
Summary of updated PEA Results Potential Economically Extractable Resources (million tonnes)(i) 40.5Mt(i) Feed Grade (% graphitic carbon) 1.83%(i) Waste to ore ratio 0.25:1 Annual processing rate (tonnes per year) 2,000,000 Processing rate (tonnes per day - 92% availability) 5,480 Project life (based on 2.0 Mtpa) 21 years Mill recovery 94.7% Average annual concentrate production (tonnes - first 10 years) 44,200 Capital cost ($ millions - including 10% contingency) $134.1 Sustaining capital ($ millions) $55.1 Cash operating costs ($/tonne of concentrate) $736 Mining costs ($/tonne of process feed material) $3.74 Processing costs ($/tonne of process feed material) $7.78 General and administrative costs ($/tonne of process feed material) $1.45 Concentrate transportation to Montreal ($/tonne of process feed material) $0.55 CDN/US dollar exchange rate $0.95US = $1 CDN
(i) The PEA production plan is based on 24 million tonnes ("Mt") grading 2.20% Cg (as estimated in the FS) being processed first followed by the processing of 16.1 million tonnes of Measured and Indicated resources grading 1.26 % Cg from a low grade stockpile. All grades are diluted. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
PEA Update ------------------------------------ (base case) Average graphite price (US$ per tonne) $2,100 $1,800 $1,500 Pre tax Net Present Value @8% (CDN$ millions) $380.9 $264.7 $148.4 Pre tax IRR (%) 40.7% 31.7% 22.2% After tax Net Present Value @8% (CDN$ millions) $257.9 $178.9 $99.0 After tax IRR (%) 33.9% 26.7% 18.9%
The PEA was originally undertaken to demonstrate the ability to meet expected future growth in graphite demand by substantially increasing production from the Bissett Creek deposit after three years of operation based on Measured and Indicated resources only. The PEA built on the Feasibility Study completed by G Mining in August, 2012 and the expanded resource model, mine plan and updated FS economics completed by AGP Mining Consultants ("AGP") in September, 2013. P&E Mining Consultants Inc. ("P&E") reviewed the AGP mine plan and modified it to commence production at the expanded 2.0 Mtpa production rate in Year 1 rather than ramping up in Year 3 and to more aggressively backfill the open pit with waste. WorleyParsons Canada updated the capital and operating costs for the process plant which represents a portion of the total capital and operating costs for the project. Consistent with industry practice, the estimates have been prepared with an engineering accuracy of +15/- 20%.
Graphite Markets and Pricing
Graphite prices have fallen 50% or more from their 2012 peak due to the economic slowdown in China and a lack of growth in the US, Europe and Japan. Recently, it has been reported that Chinese flake production has fallen 30% as uneconomic and polluting mines are being closed. Current prices are at the marginal cost of production for many producers which should limit further price declines. The weighted average price that would be realized by Bissett Creek concentrates in the current market is estimated at US$1,800/t which is the highest in the industry because approximately 50% of production will be +50 mesh extra large flake and another 40% is +80 mesh large flake. Current graphite pricing is approximately $2,100/t for +50 mesh XL flake concentrates, $1,300/t for +80 mesh large flake, $1,100/t and $900/t for +100 mesh and +150 mesh medium and small flake respectively, and less than $500/t for -150 mesh fines. Typical graphite deposits only have about 15% XL flake and over one third -150 mesh fines, and would realize average prices in the range of $1,000-1,200 per tonne of concentrate under current conditions, assuming a market for the fines.
Ken Kuchling, P.Eng., Senior Mining Associate of P&E Mining Consultants Inc. prepared the revised mine plan for the PEA update. Dan Peldiak, P.Eng., Principal Process Engineer WorleyParsons Canada prepared the revised capital and operating costs for the process plant. Andrew Bradfield, P.Eng., of P&E, who is independent of the Company, approved and authorized the disclosure of the technical information contained in this press release. Readers should refer to the NI 43-101 technical reports relating to the FS and the PEA for further details with respect to the Bissett Creek Project.
Northern Graphite Corporation
Northern Graphite Corporation is a Canadian company that has a 100% interest in the Bissett Creek graphite deposit located in eastern Ontario. The Company expects graphite prices to outperform those of other commodities in an economic recovery because of Chinese supply problems and the continued rapid growth in new uses such as lithium ion batteries. Bissett Creek is the only true large flake deposit and the only one with a bankable Feasibility Study and its major environmental permit. It also has the best infrastructure of any new graphite project, the lowest capital costs and the highest operating margin. A copy of this press release which includes detailed cash flows for the updated PEA economics, as well as additional information on Northern, can be found at www.sedar.com and www.northerngraphite.com.
This press release contains forward-looking statements, which can be identified by the use of statements that include words such as "could", "potential", "believe", "expect", "anticipate", "intend", "plan", "likely", "will" or other similar words or phrases. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. The Company does not intend, and does not assume any obligation, to update forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by applicable securities laws. Readers should not place undue reliance on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Northern Graphite Corporation
Northern Graphite Corporation
Today’s connected world is moving from devices towards things, what this means is that by using increasingly low cost sensors embedded in devices we can create many new use cases. These span across use cases in cities, vehicles, home, offices, factories, retail environments, worksites, health, logistics, and health. These use cases rely on ubiquitous connectivity and generate massive amounts of data at scale. These technologies enable new business opportunities, ways to optimize and automate, al...
Oct. 8, 2015 06:15 PM EDT Reads: 119
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete en...
Oct. 8, 2015 06:15 PM EDT Reads: 242
Manufacturing has widely adopted standardized and automated processes to create designs, build them, and maintain them through their life cycle. However, many modern manufacturing systems go beyond mechanized workflows to introduce empowered workers, flexible collaboration, and rapid iteration. Such behaviors also characterize open source software development and are at the heart of DevOps culture, processes, and tooling.
Oct. 8, 2015 06:00 PM EDT Reads: 1,065
DevOps is gaining traction in the federal government – and for good reasons. Heightened user expectations are pushing IT organizations to accelerate application development and support more innovation. At the same time, budgetary constraints require that agencies find ways to decrease the cost of developing, maintaining, and running applications. IT now faces a daunting task: do more and react faster than ever before – all with fewer resources.
Oct. 8, 2015 06:00 PM EDT Reads: 376
The web app is agile. The REST API is agile. The testing and planning are agile. But alas, data infrastructures certainly are not. Once an application matures, changing the shape or indexing scheme of data often forces at best a top down planning exercise and at worst includes schema changes that force downtime. The time has come for a new approach that fundamentally advances the agility of distributed data infrastructures. Come learn about a new solution to the problems faced by software organ...
Oct. 8, 2015 06:00 PM EDT Reads: 776
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
Oct. 8, 2015 06:00 PM EDT Reads: 129
The IoT market is on track to hit $7.1 trillion in 2020. The reality is that only a handful of companies are ready for this massive demand. There are a lot of barriers, paint points, traps, and hidden roadblocks. How can we deal with these issues and challenges? The paradigm has changed. Old-style ad-hoc trial-and-error ways will certainly lead you to the dead end. What is mandatory is an overarching and adaptive approach to effectively handle the rapid changes and exponential growth.
Oct. 8, 2015 06:00 PM EDT
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. Migration to cloud shifts computing resources from your data center, which can yield significant advantages provided that the cloud vendor an offer enterprise-grade quality for your application.
Oct. 8, 2015 06:00 PM EDT Reads: 221
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Oct. 8, 2015 06:00 PM EDT Reads: 2,155
The last decade was about virtual machines, but the next one is about containers. Containers enable a service to run on any host at any time. Traditional tools are starting to show cracks because they were not designed for this level of application portability. Now is the time to look at new ways to deploy and manage applications at scale. In his session at @DevOpsSummit, Brian “Redbeard” Harrington, a principal architect at CoreOS, will examine how CoreOS helps teams run in production. Attende...
Oct. 8, 2015 05:45 PM EDT Reads: 1,220
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Oct. 8, 2015 05:30 PM EDT Reads: 145
The APN DevOps Competency highlights APN Partners who demonstrate deep capabilities delivering continuous integration, continuous delivery, and configuration management. They help customers transform their business to be more efficient and agile by leveraging the AWS platform and DevOps principles.
Oct. 8, 2015 05:30 PM EDT Reads: 205
As-a-service models offer huge opportunities, but also complicate security. It may seem that the easiest way to migrate to a new architectural model is to let others, experts in their field, do the work. This has given rise to many as-a-service models throughout the industry and across the entire technology stack, from software to infrastructure. While this has unlocked huge opportunities to accelerate the deployment of new capabilities or increase economic efficiencies within an organization, i...
Oct. 8, 2015 05:30 PM EDT Reads: 224
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
Oct. 8, 2015 05:30 PM EDT Reads: 223