COPPER-NICKEL-PGM STUDY: Results of PEA for Thunder Bay North are “robust”

ONTARIO - Magma Metals of Perth, Australia, says the preliminary economic study (PEA) for its Thunder Bay North platinum-palladium-copper-nickel project has "robust" economics. AMEC Americas prepared the report on the property 45 km northeast...

ONTARIO - Magma Metals of Perth, Australia, says the preliminary economic study (PEA) for its Thunder Bay North platinum-palladium-copper-nickel project has "robust" economics. AMEC Americas prepared the report on the property 45 km northeast of Thunder Bay.

According to the base case scenario using consensus long term metal prices, the project generates an undiscounted pre-tax cash flow of $164 million, with an IRR of 13%, NPV (8%) of $41 million and NPV (5%) of $77 million. In the upside case based on January 2011 metal prices and exchange rates, the project generates an undiscounted pre-tax cash flow of $360 million, with an IRR of 27%, NPV (8%) of $164 million and NPV (5%) of $222 million.

The PEA suggests a pre-production capital expenditure of $174 million to develop an open pit and associated infrastructure. A mill would employ gravity recovery, flotation and pressure oxidation to create a high grade PGM and gold bullion product, a high grade silver product, copper briquettes and a nickel-cobalt alloy. Total operating costs are estimated at $41.73 per tonne milled.

The PEA is available at the company's website at www.MagmaMetals.com.au and will be filed at www.SEDAR.com because the company trades on the TSX.

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