CoTec has entered into an option agreement (the "Option Agreement") to acquire 31 mining claims forming the Lac Jeannine Property (the "Property") located in the Côte-Nord region of Quebec, Canada.
The Property contains historical tailings of the previous Lac Jeannine iron ore mine operated by the Québec Cartier Mining Company between 1959 and 1985. Prior to exercising its option to acquire the Property, the Company intends to complete a maiden resource estimate and extract a bulk sample from the Property tailings material. The bulk sample will be used for independent metallurgy testing and further testing with Binding Solutions Limited ("BSL") of its cold agglomeration technology. If the results are positive, the Company intends to complete a feasibility study regarding the recovery and production of low cost and low carbon iron ore pellets from the Property (the "Project").
On June 27, 2024, the Company announced the completion of an initial Mineral Resource Estimate ("MRE") and positive Preliminary Economic Assessment ("PEA") for the Project. The PEA was prepared by independent experts Addison Mining Services Ltd., Soutex Inc, JPL GeoServices and other independent experts.
Link to the PEA can be found here: August 2024 CoTec NI 43-101 Tech Report Final 1-2
The highlights of the MRE and PEA are as follows:
- Initial Inferred Mineral Resource of 73 million tonnes (Mt) at 6.7% total Fe for 4.9 Mt of contained total Fe (Note: tonnes are metric tonnes)
- Identified tailings material surrounding the Inferred Mineral Resource (the "Adjacent Tailings"), if confirmed by drilling and analysis, could potentially add 50 to 70 Mt to the Project
- Total Fe grade in the Project schedule reduces from approximately 8.4% total Fe to 7.0% total Fe in the first 3.5 years of production to approximately 6.0% total Fe by year 8 and subsequently 5.6% total Fe in the final year
- Based on open-pit extraction methods and the production of a gravity concentrate via conventional processing techniques and at a discount rate of 7.0% (and based solely on the MRE), the pre-tax NPV is US$93.6M, and its IRR is 38%, and the after tax NPV is US$59.5M, and its IRR is 30%
- Product is a high purity iron concentrate at 66.8% total Fe, low contaminant SiO2, Al2O3 and phosphorus with an average production of circa 380k tonnes per annum for just over 10 years
- The up-front capital cost of the Project is US$64.6M (inclusive of a 15% contingency margin and estimated further study and engineering costs), with payback achieved in 2.5 years and a profitability index (PI) of 0.921
- C1 cash costs of US$53/t (excl. transport to port and royalty payments)
- All-in Sustaining Cost (ASIC) of US$61/t (incl. transport to port and royalty payments)
- The Project significantly reduces the environmental liability of the Lac Jeannine site. The current tailings pile is considered an orphan site and the provincial government carries the environmental liability
- The Company will now proceed with the completion of a Feasibility Study for the Project to:
- Complete the next phase of drilling to upgrade the resource to indicated (and ultimately to a reserve category) and to extend the Project it to a larger portion of the Adjacent Tailings, detailed processing design targeting 67.5% total Fe concentrate to qualify for Provincial and Federal critical mineral incentives
- Investigate future low carbon pelletizing options to produce pellets in Québec using innovative, low carbon green technology, including the Binding Solutions Limited's cold bonding technology, which will further enhance the economics of the Project
- Explore potential economic support from Federal and Provincial governments, funding opportunities and other economic incentives including carbon price premiums that could improve economics, including those aiming to encourage the development of critical minerals and to promote a circular economy
- Derisk the Project in the key study areas of permitting, social acceptability, power supply and secure rail access for the transportation of the concentrate
