TORONTO, Oct. 16, 2012 /CNW/ - MBAC Fertilizer Corp. ("MBAC" or the "Company") (TSX:MBC and OTCQX:MBCFF) announced today that it has filed on SEDAR a technical report for its previously announced Preliminary Economic Assessment (the "PEA") completed for its 100% owned Araxá Rare Earth Oxide-Niobium-Phosphate Project. Araxá is located in the western part of Minas Gerais State in Brazil. The PEA was prepared by Venmyn, a South Africa-based, independent mining and minerals management advisor.
Highlights of the PEA
Highlights of the PEA include:
- Production is expected to commence in Q1 2016, at 120,000 tonnes per year of initial feedstock.
- Estimated initial production of 8,750 tonnes per annum of individual REO (Phase 1), doubling capacity to 17,500 tonnes per annum of REO after 5 years.
- Estimated production of 740 tonnes per annum of niobium oxide as a by-product in the first five years, growing to 1,832 tonnes per annum during Phase 3.
- Mine life of 40 years with significant resource expansion potential.
- Capital costs of US$406 million estimated for Phase 1, with an additional US$214 million estimated for the expansion required after the fifth year of operation.
- Conservative basket pricing of US$29.19 per kilogram relative to current rare earth prices.
- Estimated operating cash costs of US$10.50 per kilogram of REO in Phase 1, US$9.60 per kilogram in Phase 2 and US$12.20 per kilogram in Phase 3 (includes a 5% contingency).
- A robust after tax NPV of US$967 million (at a discount rate of 10%) and an IRR of 30%.
The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.
The Araxá Project
The Project consists of four tenements covering 214 hectares. The Barreiro carbonatite containing the Araxá REO is also the host rock to Companhia Brasileira de Metalurgia e Mineração's ("CBMM") niobium mine and Vale's Araxá SSP plant. Exploration from the Araxá Project has led to the discovery of significant REO, phosphate and niobium mineralization.
The scientific and technical information in this press release has been reviewed and approved by each of Bradley Ackroyd (MAIG (CP)) of AMS and Andy Clay (MSAIMM, FAusIMM, FGSSA, MAIMA) Managing Director of Venmyn, a South Africa-based, independent mining and minerals management advisor. Each of Messrs. Ackroyd and Clay are qualified persons within the meaning of National Instrument 43-101.
MBAC is focused on becoming a significant integrated producer of phosphate and potash fertilizers and related products in the Brazilian and Latin American markets. MBAC has an experienced team with over 150 years of combined experience in the business of fertilizer operations, management, marketing and finance within Brazil. In October 2008, MBAC acquired Itafós Mineração Ltda, which consisted of a phosphate mine, a mill and plant and related infrastructure, all located in central Brazil. MBAC's exploration portfolio includes a number of additional exciting phosphate and potash projects, which are also located in Brazil. The Santana Phosphate project is a high grade phosphate deposit located in close proximity to the largest fertilizer market of Mato Grosso State and animal feed market of Pará State. The Company continues to search for additional fertilizer opportunities in the Brazilian and other Latin-American markets, where strong agricultural fundamentals and unique opportunities are expected to provide attractive growth opportunities in the near future. Further information on MBAC can be found on the Company's website at www.mbacfert.com and on SEDAR at www.sedar.com.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements related to activities, events or developments that the Company expects or anticipates will or may occur in the future, including, without limitation, statements related to the Company's business strategy, objectives and goals related to the Araxá Project, including the realization of the expected economics of the Araxá Project. Forward-looking statements are often identified by the use of words such as "plans", "planning", "planned", "expects" or "looking forward", "does not expect", "continues", "scheduled", "estimates", "forecasts", "intends", "potential", "anticipates", "does not anticipate", or "belief", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are based on a number of factors and assumptions made by management and considered reasonable at the time such statements are made, and forward-looking statements involve known and unknown risks, uncertainties and other factors may cause the actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors include, among others, not meeting the various expected cost and production estimates, not realizing the anticipated NPV and IRR for the project, as well as those factors disclosed in the Company's current Annual Information Form and Management's Discussion and Analysis, as well as other public disclosure documents, available on SEDAR at www.sedar.com. Although MBAC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. The forward-looking statements contained herein are presented for the purposes of assisting investors in understanding the Company's plan, objectives and goals and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements. The company does not undertake any obligation to update forward-looking statements except in accordance with applicable securities laws.
SOURCE: MBAC Fertilizer Corp.
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