Mr. Christopher Dundas reports
DULUTH METALS HIGHLIGHTS LOW COPPER (C1) CASH COSTS AND STRONG OPERATING MARGINS IN ITS PRE-FEASIBILITY STUDY FOR TWIN METALS MINNESOTA PROJECT
Duluth Metals Ltd. has received the draft prefeasibility study set out in the independent National Instrument 43-101 technical report prepared by a multicompany team led by AMEC E&C Services Inc. for Duluth Metals for the proposed underground copper, nickel and platinum-group-element mining project located in northeastern Minnesota (the TMM project). The full PFS technical report will be filed within 45 days on SEDAR.
All dollar amounts in this press release are shown in U.S. dollars, unless otherwise stated.
Highlights:
- The draft prefeasibility study confirms that the proposed underground copper, nickel and platinum-group-metal mining project is supported by financial fundamentals showing a competitive cost position, high margins sustained over time and capital efficiencies resulting from outstanding regional and local infrastructure and competitive advantages;
- The PFS technical report is based on a 30-year underground mine plan focused on the part of the TMM project known as the Maturi and Maturi SW mineral deposits with an average production rate of 50,000 short tons per day, producing copper and nickel concentrates that are anticipated to be marketable to customers across the world;
- Over the TMM project's planned 30 years of operation, the PFS technical report estimates the mine will produce approximately 5.8 billion pounds of copper, 1.2 billion pounds of nickel, 1.5 million ounces of platinum, four million ounces of palladium, one million ounces of gold and 25.2 million ounces of silver;
- Low C1 copper cash cost of 31 cents per pound (net of byproduct credits) over the first 10 years of production and 30-year copper (C1) cash cost of 76 cents per pound (net of byproduct credits);
- Strong 30-year on-site operating margin of $36.54 per short ton;
- The TMM project's pretax base case, as calculated by AMEC, shows a net present value of $1.5-billion at 8-per-cent discount factor ($1.4-billion (U.S.) at 8-per-cent discount factor);
- The TMM project's after-tax base case, as calculated by PricewaterhouseCoopers LLP, shows an NPV of $900-million at 8-per-cent discount factor ($800-million (U.S.) at 8-per-cent discount factor).
Analyst and investor conference call
A conference call with senior management of Duluth Metals for the investment community has been scheduled for Wednesday, Aug. 20, 2014, at 10:30 a.m. EDT. Christopher Dundas, executive chairman, and Kelly Osborne, president and chief executive officer, will be available to answer questions during the call. To participate in the call, please dial in five minutes prior to the call.
Participant dial-in numbers
Operator-assisted toll-free dial-in number: 888-231-8191
Local dial-in number: 647-427-7450
"The PFS technical report validates the TMM project to be one of the most compelling greenfield copper-nickel development projects in the world," stated Mr. Osborne. "The foundations of the TMM project are its tremendous mineral resource, technically sound engineering and testwork, strong operating margins, and location in a state that supports the mining industry and has ready-built mining infrastructure and an experienced work force to support a large-scale mining operation. We look forward to the next phase of the TMM project and continued efforts to improve the value of the TMM project."
The PFS technical report is based on a 30-year underground mine plan with an average production rate of 50,000 short tons of ore per day, generating marketable copper and nickel concentrates. The mine plan is focused on the development of the Maturi and Maturi SW mineral deposits, located approximately nine miles southeast of the city of Ely, Minn., and 11 miles northeast of the city of Babbitt, Minn. Some properties of the TMM project are owned jointly by TMM and the Birch Lake joint venture. The TMM project has the potential to create approximately 850 full-time jobs when the mine is in operation and generate about 12 million labour hours during an approximate three-year construction period.
The PFS technical report indicates a C1 cash cost per pound of copper (life of mine) of 76 cents (net of all byproduct credits) and a C1 cash cost per pound of copper-equivalent LOM of $1.64. Duluth believes that the PFS technical report confirms that the TMM project has:
- A competitive cost position whereby the TMM project would be in the first quartile of C1 cash costs per pound of copper produced over the mine's 30 years of operation when benchmarked against other producing copper mines throughout the world;
- Strong operating margins sustained over time;
- Capital efficiencies resulting from outstanding local infrastructure and work force.
"The PFS technical report confirms that the TMM project offers an extraordinary long-term economic opportunity for the state of Minnesota, local communities and TMM project stakeholders," stated Mr. Dundas. "The TMM project enjoys many advantages, including excellent infrastructure, a mining-friendly jurisdiction and upsides for future expansion and potential downstream processing."
PFS technical report highlights
The independent PFS technical report was prepared at the request of Duluth by AMEC, and therefore the conclusions and opinions expressed in the PFS technical report, and those contained in this new release, are those of AMEC arrived at independently of Duluth Metals, Antofagasta PLC and TMM. The estimations set out in the PFS technical report and summarized in this news release for operating costs, commercial terms and metal price parameters are a result of AMEC's independent evaluation of the TMM project.
NPV
In the PFS technical report, AMEC has calculated a range of TMM project pretax and after-tax net present values based on discount factors of 6, 8 (base case) and 10 per cent. The NPV calculation represents cash flows discounted to the beginning of the first year when construction expenditures are made and represented in 2014 constant dollars. (Base case calculations use projected metal prices of $3.50 per pound copper, $9.50 per pound nickel, $1,300 per ounce gold, $1,680 per ounce platinum, $815 per ounce palladium and $21.50 per ounce silver.)
- Base case pretax NPV (at 8-per-cent discount): $1.36-billion;
- Base case after-tax NPV (at 8 per cent): $750-million;
- Pretax NPV (at 6 per cent): $2.22-billion;
- After-tax NPV (at 6 per cent): $1.45-billion;
- Pretax NPV (at 10 per cent): $730-million;
- After-tax NPV (at 10 per cent): $260-million.
Low 30-year cash cost position
The C1 cash costs in the PFS technical report are as follows, where copper equivalent is derived by adding the pounds of copper and the nickel revenue/price of copper:
- C1 cash cost per pound of copper (LOM): 76 cents (net of all byproduct credits);
- C1 cash cost per pound of copper equivalent (LOM): $1.64.
Strong operating margins
The PFS technical report margins include:
- Revenue per ton milled (LOM): $58.27;
- On-site operating costs per ton milled (LOM): $21.73;
- On-site operating margin per ton milled (LOM): $36.54;
- Total operating costs per ton milled (LOM): $30.58;
- Total operating margin per ton milled (LOM): $27.69.
Efficient capital investment
The PFS technical report capital cost estimates are:
- Initial capital: $2.77-billion;
- Pretax payback period: 6.4 years from start of production;
- Capital intensity (equals initial capital divided by average annualized pounds of copper equivalent produced for the first 10 years): $6.24 per annual pound copper equivalent produced;
- LOM capital: $5.41-billion;
- Internal rate of return pretax: 13.6 per cent.
A strong economic engine during the first 10 years
The TMM project is focused on maximizing project economics from start-up. The PFS technical report estimates that, in the first 10 years of production, the total TMM project will generate the following average annual financial measures:
- Revenue (years 1 to 10): $12.11-billion;
- Earnings before interest, taxes, depreciation and amortization (EBITDA): $6.19-billion;
- Free cash flow (pretax): $4.60-billion;
- Free cash flow (after tax): $3.87-billion;
- Production of payable copper: 2.11 billion pounds;
- Production of payable nickel: 378.55 million pounds;
- C1 cash cost per pound of copper equivalent: $1.36;
- C1 cash cost per pound of copper: 31 cents;
- Operating margin: $37.18 per ton milled.
TMM PROJECT ECONOMICS
Valuation indicators Units LOM
Pretax
Cumulative cash flow pretax $M 7,913
NPV 6% $M 2,231
Base case NPV 8% $M 1,358
NPV 10% $M 732
Payback period from start of
production Years 6.4
IRR before tax % 13.6%
After tax
Cumulative cash flow after tax $M 6,003
NPV 6% $M 1,449
Base case NPV 8% $M 753
NPV 10% $M 257
Payback period from start of
production Years 7.2
IRR after tax % 11.4%
TMM PROJECT CAPITAL COST
Units Value
Initial capital $M 2,775
Sustaining capital $M 2,636
LOM capital $M 5,410
Capital intensity $/lb CuEq year 6.24
Mineral reserves
The mine plan is based on the mineral reserves converted from 1.233 billion short tons of measured and indicated mineral resources within the Maturi and Maturi SW deposits.
The mine plan, including dilution, estimates total proven and probable reserves, as set out in the PFS technical report, of 527 million short tons over the LOM.
MINERAL RESERVE ESTIMATES
Ore
Area Classification tons Cu Ni Pt Pd Au Ag
(Mst) (%) (%) ppm ppm ppm ppm
Maturi Proven 130 0.65 0.21 0.152 0.354 0.086 2.31
Probable 351 0.59 0.19 0.163 0.367 0.087 2.15
P&P 482 0.61 0.19 0.160 0.363 0.087 2.19
Maturi SW Proven 0 0.00 0.00 0.000 0.000 0.000 0.00
Probable 43 0.48 0.16 0.083 0.192 0.048 1.60
P&P 43 0.48 0.16 0.083 0.192 0.048 1.60
Total Proven 130 0.65 0.21 0.152 0.354 0.087 2.31
Probable 397 0.58 0.19 0.154 0.348 0.083 2.09
P&P 527 0.59 0.19 0.154 0.349 0.084 2.14
Ore Contained metal
Area Classification tons Cu Ni Pt Pd Au Ag
(mst) Blb Blb Moz Moz Moz Moz
Maturi Proven 130 1.7 0.5 0.6 1.4 0.3 8.8
Probable 351 4.2 1.3 1.7 3.8 0.9 22.2
P&P 482 5.8 1.9 2.3 5.1 1.2 31.0
Maturi SW Proven 0 0.0 0.0 0.0 0.0 0.0 0.0
Probable 43 0.4 0.1 0.1 0.2 0.1 2.0
P&P 43 0.4 0.1 0.1 0.2 0.1 2.0
Total Proven 130 1.7 0.5 0.6 1.4 0.3 8.8
Probable 397 4.6 1.5 1.8 4.0 1.0 24.2
P&P 527 6.2 2.0 2.4 5.4 1.3 33.0
Notes:
1. The qualified person for the mineral reserve estimate is
Joanna Poeck, an employee of SRK Consulting (U.S.) Inc. The
mineral reserves have an effective date of July 1, 2014.
2. Mineral reserves are contained within mine designs based on
measured and indicated mineral resources, and assume a mining
rate of 50,000 short tons per day of mineralized material over a
30-year mine life. Underground mining will utilize conventional
post-pillar cut-and-fill and long-hole open stoping methods.
Paste backfill will be employed. The mine plan includes the
mining of remnant mineralized material, which is mineralized
material that is above the marginal cut-off grade, but is left
behind during the first-pass mining of higher-grade material.
3. Mineral reserves are contained within measured and indicated
mine designs using the following net smelter return calculation
inputs. Recovery assumptions used in the calculations were 94.0
per cent for copper, 60.8 per cent for nickel, 82.3 per cent for
gold, 36.1 per cent for palladium and 42.5 per cent for
platinum. Payability assumptions were 76.4 per cent for copper,
70.8 per cent for nickel, 45 per cent for gold, 68.6 per cent
for palladium and 69.3 per cent for platinum. Metal price
assumptions were $3 per pound for copper, $9.50 per pound for
nickel, $1,200 per ounce for gold, $700 per ounce for palladium
and $1,650 per ounce for platinum. Operating cost assumptions
used in the NSR equations total $23.53 per short ton mined and
include mining costs of $13.80 per short ton, process costs of
$5.02 per short ton, paste backfill costs of $1.28 per short
ton, water management costs of 21 cents per short ton, tailings
costs of $0.06 per short ton, general and administrative costs
of $2.44 per short ton, technical services costs of 45 cents per
short ton, and financial assurance costs of 27 cents per short
ton.
4. Mineral reserves are reported using an NSR cut-off of $25 per
short ton.
5. Mineral reserves are reported according to CIM Definition
Standards for Mineral Resources and Mineral Reserves (May 10,
2014).
6. Mineralization that was either not classified or assigned to
the inferred mineral resource category was set to waste within
the above NSR cut-off mining shapes. Mine design incorporates
geotechnical and hydrogeological considerations that take into
account paste and hangingwall dilution. Dilution is allocated in
the mine design based on the mining method, and ranges from 3 to
5 per cent. Mining recovery is assumed at 95 per cent.
7. Contained metal is reported as in situ metal content and does
not include any adjustments for recoverability.
8. Rounding as required by reporting guidelines may result in
apparent summation differences between tons, grade and contained
metal content.
9. Antofagasta uses different parameters in its calculation of
mineral reserves.
Mineral resources
The PFS technical report provides an updated resource estimate for the TMM project, which includes four deposits known as the Maturi, Maturi SW, Birch Lake and Spruce Road deposits. The PFS technical report mine plan and financial estimates for the TMM project are based on mineral resource estimates from the Maturi and Maturi SW deposits that have been updated from the previously disclosed January, 2014, resource estimates. Maturi measured, indicated, and inferred mineral resources incorporate assay results from 57 drill holes totalling 65,635.5 feet drilled between September, 2012, and January, 2014. In addition, the resource estimate tabulates silver grades for the first time, estimating a Maturi measured and indicated grade of 2.14 parts per million silver (0.063 ounce per short ton silver), and Maturi SW indicated grade of 1.58 parts per million silver (0.046 ounce per short ton), for a total of 75.4 million ounces of silver contained in the Maturi and Maturi SW measured and indicated mineral resources.
MINERAL RESOURCE ESTIMATES
CuEq Cu Ni Pt Pd Au Ag
Deposit Category Tons (Mst) (%) (%) (%) (ppm) (ppm) (ppm) (ppm)
Maturi Measured 308 1.02 0.63 0.20 0.146 0.339 0.083 2.26
Indicated 822 0.96 0.58 0.19 0.155 0.350 0.083 2.10
Inferred 531 0.81 0.49 0.16 0.138 0.314 0.070 1.81
Maturi SW Indicated 103 0.77 0.48 0.17 0.080 0.185 0.048 1.58
Inferred 32 0.70 0.43 0.15 0.065 0.157 0.041 1.43
Subtotal Maturi
and Maturi SW Measured 308 1.02 0.63 0.20 0.146 0.339 0.083 2.26
Indicated 924 0.94 0.57 0.19 0.147 0.332 0.079 2.04
M+I 1,233 0.96 0.58 0.19 0.147 0.334 0.080 2.10
Inferred 563 0.81 0.49 0.16 0.134 0.305 0.068 1.79
Birch Lake Indicated 100 1.02 0.52 0.16 0.233 0.511 0.114 -
Inferred 239 0.88 0.46 0.15 0.180 0.370 0.087 -
Spruce Road Inferred 480 0.66 0.43 0.16 - - - -
Contained metals
Deposit Category Cu (Blb) Ni (Blb) Pt (Moz) Pd (Moz) Au (Moz) Ag (Moz)
Maturi Measured 3.9 1.2 1.3 3.0 0.7 20.3
Indicated 9.5 3.1 3.7 8.4 2.0 50.3
Inferred 5.2 1.7 2.1 4.9 1.1 28.0
Maturi SW Indicated 1.0 0.3 0.2 0.6 0.1 4.7
Inferred 0.3 0.1 0.1 0.1 0.0 1.3
Subtotal Maturi
and Maturi SW Measured 3.9 1.2 1.3 3.0 0.7 20.3
Indicated 10.5 3.5 4.0 8.9 2.1 55.1
M+I 14.4 4.7 5.3 12.0 2.9 75.4
Inferred 5.5 1.8 2.2 5.0 1.1 29.4
Birch Lake Indicated 1.0 0.3 0.7 1.5 0.3 -
Inferred 2.2 0.7 1.3 2.6 0.6 -
Spruce Road Inferred 4.1 1.5 - - - -
Note:
1. The mineral resource estimates have different effective dates as follows: Maturi: Feb. 4, 2014;
Maturi SW: June 15, 2013; Birch Lake: Sept. 15, 2012; Spruce Road: Sept. 15, 2012.
2. The qualified person for the estimates is Dr. Harry Parker, RM SME, who is a professional
geologist licensed in Minnesota.
3. Mineral resources are reported inclusive of mineral reserves. Mineral resources that are not
mineral reserves do not have demonstrated economic viability.
4. Mineral resources were estimated assuming underground bulk mining methods and are reported at a
cut-off grade of 0.3 per cent copper.
5. Maturi and Maturi SW copper equivalent grades are based on the following assumptions: copper
equivalent: copper plus 1.459 times nickel plus 0.265 times gold plus 0.101 times palladium plus
0.228 times platinum plus 0.004 times silver; where global metallurgical recoveries are 93.4 per
cent (Cu), 61.4 per cent (Ni), 78.5 per cent (Au), 74.9 per cent (Pd), 63.2 per cent (Pt) and 76.5
per cent (Ag); smelter returns are 94.3 per cent (Cu), 77.1 per cent (Ni), 54.9 per cent (Au), 35.0
per cent (Pd), 45.2 per cent (Pt) and 47.6 per cent (Ag), and long-term consensus metal prices are
$3.50 per pound copper, $9.50 per pound nickel, $1,300 per troy ounce gold, $815 per troy ounce
palladium and $1,680 per troy ounce platinum and $21.50 per troy ounce silver. The Birch Lake CuEq
formula is based on November, 2012, parameters: copper equivalent: copper plus 1.58 times nickel
plus 0.285 times gold plus 0.219 times palladium plus 0.435 times platinum, where concentrate
metallurgical recoveries are 94.3 per cent (Cu), 60.0 per cent (Ni), 85.0 per cent (Au), 90.0 per
cent (Pd) and 93.0 per cent (Pt); CESL metallurgical recoveries are 96.3 per cent (Cu), 95.6 per
cent (Ni), 74.5 per cent (Au), 70.7 per cent (Pd) and 59.4 per cent (Pt); smelter returns are 100
per cent (Cu), 80 per cent (Ni), 80 per cent (Au), 80 per cent (Pd), and 80 per cent (Pt);
long-term consensus metal prices of $3 per pound copper, $9.38 per pound nickel, $1,050 per troy
ounce gold, $805 per troy ounce palladium and $1,840 per troy ounce platinum. The Spruce Road
copper equivalent formula is based on the Maturi parameters, and restricted to copper and nickel:
copper equivalent: copper plus 1.459 times nickel; where global metallurgical recoveries are 93.4
per cent (Cu), 61.4 per cent (Ni); smelter returns of 94.3 per cent (Cu), 77.1 per cent (Ni);
long-term consensus metal prices of $3.50 per pound copper and $9.50 per pound nickel.
6. Silver is not included in the 2012 resource estimate for Birch Lake as quality assurance/quality
control results had not been reviewed at the time of the estimate. Silver is not a contributor to
either the NSR calculation or the copper equivalent grade for Birch Lake. Gold, platinum, palladium
and silver assays were not available to support estimation in the 2012 Spruce Road resource model.
Gold, silver, platinum and palladium do not contribute to either the NSR calculation or the copper
equivalent grade for Spruce Road.
7. No allowances for mining recovery and external dilution have been applied. Mineral resources for
Maturi assume a 400-foot-thick safety pillar above the mineral resource. Mineral resources for
Maturi SW are tabulated based on a 15-foot allowance for overburden and no safety pillar. Mineral
resources for Birch Lake do not have a safety pillar allowance since the mineralization is located
600 feet below ground surface. Mineral resources at Spruce Road assume a 164-foot-thick safety
pillar.
8. Contained metal is reported as in situ metal content and does not include any adjustments for
recoverability.
9. Rounding as required by reporting guidelines may result in apparent summation differences between
tons, grade and contained metal content.
TMM project description
Duluth believes that the TMM project is expected to be one of the world's largest development-stage polymetallic projects and that Minnesota offers worldwide competitive advantages through extensive modern infrastructure such as easily accessible roads, rail lines, ports, power and water supplies, as well as a highly experienced mining labour force.
The TMM project comprises four major areas: the underground mine site, concentrator site, tailings storage facility site and the utility corridors. The mine site is located at the Maturi and Maturi SW deposits. The TMM project has two declines that involve non-ore development, with the portals located on and near the concentrator site. The concentrator site includes the primary portal, temporary ore stockpiles (lined with leachate collection), and a process water pond. The tailings storage facility located south of the city of Babbitt, would store tailings that are not returned to the underground mine as paste backfill. The tailings storage facility also includes a concentrate filtration plant, intermediate pond, electrical substation and rail load-out facility. The TMM project will use multiple utility corridors for infrastructure needs, including concentrate, tailings and water pipelines, service and contact roads, and an extension of the existing railway.
Mining methodology
The TMM project is based on an underground mining operation with a throughput capacity of 50,000 short tons per day, or 18.25 million short tons per year. The underground operation would utilize a combination of post-pillar cut-and-fill and long-hole stoping mining methods (PPCF and LHS, respectively). These methods were selected for their ability to accommodate specific geometries of the deposit, to allow for a relative low-cost, high-ramp-up rate, and high productivity.
The mine plan estimates a LOM production of 527 million short tons of mineralized material at 0.59 per cent copper and 0.19 per cent nickel. Mine infrastructure covers a wide variety of fixed facilities to be constructed underground (for example, primary crushers, conveyors, pumping stations, explosives magazine and electrical substations). Mine equipment has been selected to satisfy high productivities and low costs, and all selected equipment is considered well suited for mass mining and appropriate for a modern operation.
Mining will occur in mining units or panels separated by barrier pillars. These panel areas are a maximum of 1,700 feet along strike by 1,700 feet along dip. Mining recoveries inside the panels varies between 75 to 82 per cent depending on the depth, dip, width and mining method selected.
Mine construction and preproduction development will take place in years minus 3 through minus 1. Mineralized material will be stockpiled until year 1, when ore production ramps up and is fed directly to the processing plant. The mine achieves peak sustainable production of 50,000 short tons per day in year 2, which is sustained through year 26. Initial mine construction is estimated to take approximately three years.
The TMM project has been designed to minimize the waste impact. The underground mining methods generate little waste rock in comparison with surface mining, and when in production, all waste rock will be used as underground backfill. Similarly, approximately half of the tailings produced by the concentrator will be placed back into the mine in the form of paste backfill, with the remainder being held in surface storage at the tailings storage facility.
Mineral processing
Extraction and processing of the valuable minerals are centred on sequential flotation where a copper concentrate is first produced from the mineralized material, followed by production of a nickel concentrate. The tailings produced from the flotation process will be very low in sulphur, with approximately half contained in a conventional lined tailings impoundment, and the remainder combined with cement and fly ash and returned to the mine as paste backfill.
The copper and nickel concentrate process flowsheet was mainly developed through an investigative pilot plant program conducted at ALS Metallurgy in Kamloops, B.C. Following that program, an optimization bench-scale program was undertaken at Blue Coast Research in Parksville, B.C.
The concentrator facilities proposed for the TMM project comprise a process plant with an ore treatment capacity of 50,000 short tons per day, a single process line using SAG and ball milling with sequential copper and nickel flotation, high-rate tailings thickening, concentrate receiving system, filter plant, concentrate storage and rail load-out.
Extensive work on mineral processing and metallurgy for the PFS technical report was carried out between 2012 and 2014 on a variety of samples obtained through major drilling programs conducted between 2010 and 2012.
LIFE OF MINE RECOVERY
Metal Cu concentrate (%) Ni concentrate (%) Cumulative (%)
Copper 85.75 7.99 93.74
Nickel 6.71 55.50 62.21
Gold 64.69 13.32 78.01
Palladium 38.84 35.99 74.83
Platinum 23.90 39.20 63.10
Silver 64.43 12.46 76.89
TMM CONCENTRATE GRADES
Typical
Element Unit assay Expected range
Copper concentrate
grade
Copper % 25.4 23.5 to 25.5
Nickel % 0.64 0.57 to 0.66
Gold ppm 2.7 1.9 to 4.1
Palladium ppm 6.8 4.4 to 10.6
Platinum ppm 1.9 1.1 to 2.9
Silver ppm 69.1 66.0 to 73.1
Nickel concentrate
grade
Copper % 4.7 4.4 to 7.8
Nickel % 10.5 8.4 to 13.4
Gold ppm 1.1 0.9 to 1.6
Palladium ppm 12.6 9.2 to 18.4
Platinum ppm 6.1 4.3 to 9.0
Silver ppm 26.4 23.8 to 42.3
There are not expected to be any deleterious or penalty elements in the concentrate.
TMM OPERATING COST ESTIMATES
Operating costs on site
Mining cost per short ton milled $12.56
Process cost per short ton milled $ 3.99
G&A per short ton milled $ 2.69
Surface operating costs per short ton milled $ 2.49
------
Operating costs on site per short ton milled $21.73
Operating costs off site
Treatment charges per short ton milled $ 5.13
Freight costs per short ton milled $ 3.71
------
Operating costs off site per short ton milled $ 8.85
------
Total operating cost per short ton milled $30.58
The capital cost estimate for the TMM project is an Association for the Advancement of Cost Engineering Class 4 (PFS) estimate with a plus-or-minus-25-per-cent accuracy.
TMM CAPITAL COST ESTIMATES
(in millions of U.S. dollars)
Description
Mine $ 793
Concentrator 956
Tailings management 547
Surface infrastructure and utilities 379
Owner's costs 100
------
Total capital cost $2,775
The PFS technical report will be written by John Barber, PE, Dr. Ted Eggleston, RM SME, Dr. Harry Parker, RM SME, David Frost, FAusIMM, Simon Allard, PEng, and Janine Hartley, PE, of AMEC, Chris Martin, CEng, of Blue Coast Group, Tom Radue, PE, of Barr Engineering, Dr. Mathew Pierce, PE, and Dr. Robert Sterrett, PG, of Itasca, Matthew Malgesini, PE, of Golder, and Joanna Poeck, RM SME, of SRK.
The qualified persons will be responsible for the preparation of the PFS technical report. These qualified persons have verified the data in this news release that pertain to the PFS technical report.
Phillip Larson, PGeo, is the qualified person for Duluth Metals, in accordance with National Instrument 43-101 of the Canadian Securities Administrators, and has reviewed and approved the technical content of this press release.
We seek Safe Harbor.
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