QUEBEC – The preliminary economic assessment of the Ashram rare earth element deposit at the Eldor project in the northern part of the province shows what owner Commerce Resources of Vancouver calls “robust economics.” The study postulates that a 4,000-t/d open pit with a 25-year life would have a pre-tax and pre-finance net present value of $2.32 billion at a 10% discount rate. Under the same conditions the internal rate of return would be 44% and the project would pay for itself in 2.25 years.
The PEA was prepared by SGS Canada-Geostat using a base case cut-off grade of 1.25% TREO to outline 29.3 million tonnes of measured and indicated resources, plus 219.8 million tonnes of inferred resource averaging 1.88% TREO.
Total cost of the pre-production activities at Eldor is estimated to be $763 million, including $204 million for an all-weather road from the mine to shipping facilities at Mackay’s Island, north of the community of Kuujjuaq, QC. Port upgrades will be $42 million, mine site infrastructure $287 million, equipment $21 million, and administration $56 million. There is also a 25% contingency factor of $153 million.
Additional details from the PEA are available in the news release dated May 24, 2012, available at CommerceResources.com.