Operational Highlights:
-- Proposed Life of Mine production of 6.0 million tonnes (Mt) of mill feed
at a grade of 15.66% graphitic carbon (Cgr), based on the initial
Mineral Resource estimate disclosed on January 19, 2012
-- Mine Life of 20 years, open pit operation at 300,000 tonnes per year
-- Processing through a sequence of crushing, grinding, flotation, magnetic
separation, thickening and drying, producing a primary concentrate of
graphite of various grades and flake sizes
-- Tailings directed through sulfide flotation circuit in order to minimize
the volume of acid-generating residues and to enable proper management
of both acid-generating tailings and waste rock within a unique disposal
site
-- Average graphite recovery of 91.3% at Lac Knife process plant
-- Life of Mine production of 928,000 tonnes of concentrate at 92% Cgr on
average at Lac Knife, or approximately 46,600 tonnes of concentrate per
annum (tpa)
-- Thermal purification upgrade of approximately 40% of the primary
concentrate to 99.99% Cgr by an existing producer with inherent
purification losses of 15%
-- Life of Mine Project production of 868,000 tonnes of concentrate at
93.5% Cgr on average, including 338,000 tonnes of high purity 99.95% Cgr
product
Financial Highlights:
-- Exchange rate US$1.00 = C$1.00
-- PEA economics for the Project calculated based on graphite market prices
of $10,000, $1,300, and $800 per tonne of battery grade (greater than
99.95% Cgr, +100 mesh), medium grade (greater than 90% Cgr, -100+200
mesh) and fine grade (greater than 80% Cgr, -200 mesh) respectively, on
a FOB mine basis
-- $246 million pre-tax Net Present Value (NPV) (at a 10% discount rate)
-- 32% pre-tax Internal Rate of Return (IRR)
-- $926 million pre-tax undiscounted cash flow
-- $3.7 billion total net revenue
-- Pre-tax payback period of 2.8 years
-- $154 million initial capital cost, inclusive of $33 million and $24
million in working capital and contingency (25%), respectively
-- $68 per tonne average unit operating cost at Lac Knife
-- $435 per tonne average unit operating cost, assuming thermal
purification on a contract basis