[Ferro-Alloys.com] The recently completed preliminary economic assessment (PEA) for the Mont Sorcier iron and vanadium project is supporting TSX-V-listed Vanadium One Iron Corp’s vision for a mine near Chibougamau, Quebec.
Announcing the results of the PEA on Thursday, the company said that the study outlined a robust economic assessment for Mont Sorcier, based on a traditional openpit mining scenario with magnetic separation processing to produce about five-million tonnes a year of vanadium-rich iron concentrates, with low levels of impurities.
Based on test work to date, Vanadium One Iron said the concentrates would be amenable for direct blast furnace route use.
The project will require initial capital expenditure of C$457.5-million and has a three-year payback period, with an after-tax internal rate of return of 33.8%. The PEA calculated an after-tax net present value, at an 8% discount rate, of C$1.7-billion.
The current resource supports a potential mine life of 37 years.
The project should yield positive after-tax cash flow in year one and over its entire mine life, free cash flow is estimated at C$6.25-billion.
“Located in an established mining region, Mont Sorcier has strong access to infrastructure already in place; which reduces upfront capital requirements, and with the production of premium 65% high-grade iron concentrate with vanadium credits, we believe these characteristics position Mont Sorcier as one of the premier iron development projects in the world,” Vanadium One Iron president and CEO Cliff Hale-Sanders commented.
Based on the results of the PEA, the company believes it could improve the economics of this initial PEA through improved resource definition and growth, ongoing project optimisation efforts and further metallurgical test work to enhance product quality even further.
Going forward, Vanadium One Iron would focus on developing strategic partnerships to complete a feasibility study to bring Mont Sorcier to a formal development decision as quickly as possible, Hale-Sanders added.
Vanadium One Iron's stock closed 23% higher at C$0.08 a share.