SASKATCHEWAN - The preliminary economic assessment for the Border coal-to-liquids (CTL) project has been filed by owner Goldsource Mines of Vancouver. The property is 45 km north of the town of Hudson Bay, SK.
The PEA assumes the Border project will produce at a rate of 14,000 b/d. With assumed market prices of $2.25 per gallon for diesel and $2.11 and $1.29 per gallon for naphtha and LPG-propane respectively, the estimated annual product revenues average $425 million per year with estimated operating costs of approximately $266 million/year. Cost of building such a project will probably be just shy of $2 billion over a five-year period.
Based on the pro-forma development plan, technology for upgrading, and estimated costs of operations, the project generates a positive pre-tax internal rate of return of approximately 6.3% and a payback period of 13 years with a minimum project life of 30 years. Sensitivity analyses show that the project rate of return is much more sensitive to changes in revenue (product prices) than either operating or capital costs.
Goldsource has revised the coal resources upward to 79.2 million tonnes in the indicated category, 33.0 million tonnes in the inferred category, and 61.2 million tonnes in the speculative category.
The PEA is posted at www.GoldsourceMines.com under the Properties link.
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