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Lion Copper and Gold announces first phase work program agreement with Rio Tinto and start of permitting process

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  • Updated assumptions with NI 43-101 feasibility study increased NPV project before tax to C $ 383.1 million (previously – C $ 175.8 million) and NPV after taxes to C $ 287 million (previously – $ 126.3 million)

  • The average EBITDA for the life of the mine rose to 102 million Canadian dollars per year (previously – 67.6 million dollars); reaching a peak of C $ 168 million in its fourth year of production

  • The price of zinc has risen significantly since the feasibility study in October 2021 . The foundations for sustainable price increases continue to strengthen due to many factors, including the importance of zinc in the renewable energy industry

  • The company is fully funded until the final investment decision (FID) after the recent raising of Canadian $ 5.2 million

May 17, 2022 – TheNewswire – Metallum Resources Inc. (TSXV: MZN) ( “Metal” or “Company”) is pleased to announce the updated economic performance of its Superior Lake Zinc and Copper (“Project”) project in Ontario, Canada. Based on updated assumptions 1 The project NPV 8 Before taxes, it increased to 383 million Canadian dollars (previously – 175.8 million Canadian dollars) while average EBITDA 3 increased to 102 million Canadian dollars a year (previously 67.6 million Canadian dollars). Figure 1 illustrates the NPV before and after project taxes 8% returns based on a number of zinc pricing scenarios.

Figure 1: NPV 8 at different zinc prices 1,2,4


Click on the image to view full size

A significant improvement in the prices of a number of goods produced under the project (zinc, copper, silver and gold) led to an increase in the profitability of the project compared to the feasibility study (Table 1 below). While zinc, the main commodity produced under the project, has fallen slightly since a recent 15-year high ($ 2.05 / pound) reached in April 2022, fundamental to the sector is extremely positive due to limited new supply, while a significant increase in demand, is largely due to the importance of zinc in several areas of renewable energy (EV (electric vehicles), solar and wind energy).

1 – Updated prices for goods: Zn: $ 1.65 per pound, Cu: $ 4.22 per pound, Au: $ 1,845 per ounce, Ag: $ 21.6 per ounce; 2 – 8% with NPV discount before tax; 3 – Average EBITDA in my life. The total EBITDA of the project is $ 870 million; 4 The feasibility study was conducted using a zinc price of $ 1.22 per pound ($ 2,700 per tonne), a copper price of $ 3.31 per pound ($ 7,300 per tonne), a silver price of 21, 00 US dollars per ounce and gold prices of 1635 US dollars / ounce.

Figure 2: Projected demand for zinc used in renewable energy 5


Click on the image to view full size

5 – Source: CRU, IRENA, Teck

Given the strengthening of the market fundamentals of the project, the Company is advancing the project through a number of crucial steps towards making a final investment decision (FID) in the future. Updates to these initiatives will be published as work progresses.

The company is in excellent financial position following a recent $ 5.2 million capital raising, leaving the company fully funded until FID is made. A summary of the main inputs and results in the feasibility study and updated revenues is highlighted below.

Table 1: Updated assumptions and results

Units

Feasibility study

(November 2021) 2

Updated assumptions 1

Change C $

Change

%

Average zinc production (concentrate)

Tons a year

33 401

33 401

Average copper production (concentrate)

Tons a year

1270

1270

My life

years

8.5

8.5

Initial investment 1

A million Canadian dollars

145.1

145.1

C 1 – Operating costs

C $ / pound

0.44

0.44

AISC – operating costs

C $ / pound

0.55

0.51

-0.04

7%

NPV before taxes 8%

A million Canadian dollars

175

383

207.3

118%

IRR before taxes

%

26

42

16

62%

NPV after taxes 8%

A million Canadian dollars

126

287

160.7

127%

IRR after taxes

%

23

38

15

65%

Payback

years

2.5

2.25

0.25

11%

Price Price

USD / pound

1.22

1.65

0.43

35%

Price Cu

USD / pound

3.31

4.22

0.91

27%

Au Price

USD / ounce

1635

1845

210

13%

Ag Price

USD / ounce

21.00

21.60

0.6

3%

1 – Updated prices for goods: Zn: $ 1.65 per pound, Cu: $ 4.22 per pound, Au: $ 1,845 per ounce, Ag: $ 21.6 per ounce;

2 – A feasibility study was conducted using a zinc price of $ 1.22 / lb ($ 2,700 / t), a copper price of $ 3.31 / lb ($ 7,300 / t), and a silver price of $ 21.00 per ounce and US gold prices at $ 1,635 an ounce

The feasibility study of 13 October 2021 was prepared by DRA Global Limited with the participation of other well-known engineering companies. A detailed technical report is posted on SEDAR in the company profile. The technical report is also available on the Metallum website at metallumzinc.com.

Qualified person

The news release was reviewed and approved by Andrew Tims, P.Geo., The company’s intelligence manager, and a qualified person as defined by National Instrument 43-101 – Disclosure standards for minerals .

ON BEHALF OF RULING

For more information, contact:

Kerem Usenmez, President and CEO

Tel: 604-688-5288; Fax: 604-682-1514

Email: info@metallumzinc.com

Website: metallumzinc.com

Neither the TSX Venture Exchange nor the Investment Regulatory Organization of Canada assumes responsibility for the adequacy or accuracy of this issue.

A warning regarding statements about the future

Some of the statements contained in this news release represent prospects within the meaning of Canadian securities law. All statements included in this document, with the exception of historical facts, are forward-looking statements and include, without limitation, statements of feasibility study, updated project economics, and company development plans for the project. Often, but not always, these forward-looking statements can be identified by words such as “evaluation”, “evaluation”, “evaluation”, “potential”, “open”, “future”, “expected”, “predicted”, ” used “,” read more “,” was “,” enhanced “,” improved “,” offset “,” limited “,” contained “,” reflects “,” contains “,” left “,” will “,” periodically ” or allegations that events “may” or “should” occur or be achieved, and similar expressions, including negative options.

Statements about the future include known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of a company to differ materially from any results, performance or achievements expressed or implied in forward-looking statements. Such uncertainties and factors include, but are not limited to, the uncertainties inherent in the feasibility study and the updated economic situation of the project; whether the exploration and development of the company’s facilities will continue as planned; changes in general economic conditions and financial markets; A company or any joint venture partner that does not have the financial capacity to achieve its exploration and development objectives; risks associated with the results of exploration and development, assessment of mineral resources and geology, class and continuity of mineral deposits; contingencies and costs; risks associated with COVID-19, including adverse impacts on the global economy, exploration and development, and staffing; and such other risks, which are periodically described in detail in the company’s quarterly and annual documents to the securities regulators and are available in the company’s SEDAR profile at www.sedar.com. Although the Company has attempted to identify important factors that may cause actual actions, events, or outcomes to differ materially from those described in forward-looking statements, there may be other factors that cause differences in actions, events, or outcomes. from those expected, calculated or assigned.

The forward-looking statements contained in this document are based on the assumptions, beliefs, expectations and opinions of management, including, but not limited to: the accuracy of the feasibility study and the updated economics of the project; that the objectives and planned exploration and development activities set before the Company will be achieved; that there will be no significant adverse changes affecting the Company or its properties; and such other assumptions set forth here. Statements of the future are made as of the date of this document, and the Company waives any obligation to update any forward-looking statements as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that the forward-looking statements will be accurate, as actual results and future events may differ materially from those expected in such statements. Accordingly, investors should not overly rely on forward-looking statements.

ABOUT Metal resources

Metal resources (MZN.TSXV) owns 100% of the Superior Lake Zinc and Copper project in Ontario, Canada. The project is the highest zinc production project in North America with a resource of 2.35 Mt at 17.9% Zn, 0.9% Cu, 0.4 g / t Au and 34 g / t Ag.

The company has completed a positive feasibility study, which emphasizes that the project will be in the lowest quarter of operating costs (C1 costs – 0.44 Canadian dollars / pound; AISC 0.51 Canadian dollars / pound). These low costs, due to the high class of the project, provide a reliable economic return. Most permits and licenses are available, allowing for quick renovations after the final investment decision.

For more information on the company and the top project, please visit the company’s website at metallumzinc.com .

Copyright (c) 2022 TheNewswire – All rights reserved.

https://investingnews.com/lion-copper-and-gold-announces-agreement-for-stage-one-work-program-with-rio-tinto-and-commencement-of-permitting-process/

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