ONTARIO - KWG Resources of Montreal has released the preliminary economic assessment (PEA) study for its Big Daddy chromite deposit in the Ring of Fire in the James Bay Lowlands. The report recommends the project advance to the feasibility stage.
The PEA examined an open pit mine, crushing plant, site infrastructure as well as development of a railway and power line to the site. Pre-production capital expenses are expected to be $784 million (includes half the $900-million cost of the railway) to establish an 8,000-t/d operation over a 16-year life. The deposit contains 24.5 million tonnes of indicated resources at a grade of 38.02% Cr2O3 and 13.5 million tonnes of inferred resources at a grade of 37.03% Cr2O3. Other development options will be examined.
The Big Daddy project has an undiscounted gross revenue of $12.6 billion. The pre-tax evaluation is estimated at $2.5 billion net present value (NPV) at 8% or $2.0 billion NPV at 10%. The internal rate of return will be 42.0%, making the payback period 2.5 years.
The Big Daddy project is a joint venture of KWG, Spider Resources and Freewest Resources Canada. Additional information is posted at www.KWGResources.com.
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