Nov 18 2014
Mason Graphite Inc. ("Mason Graphite" or the "Company") is pleased to announce the preliminary results from a location trade-off study for its Lac Guéret project in Quebec that are expected to optimize the upcoming Feasibility Study with a new proposed concentrator site in the area of Baie-Comeau.
The alternate location provides opportunities for the Company to reduce capital and operating costs and improve operational efficiencies. The study was conducted in the third quarter of 2014 by the engineering firm Hatch Ltd. Additional trade-off studies have also been initiated with the aim of further optimizing the project.
Results of the preliminary analysis indicate that relocating the concentrator facility in the vicinity of Baie-Comeau city should represent economic and operational advantages, including: low-cost hydroelectric power, improved access to labour and other managerial and operational efficiencies which, together, should contribute to a reduction in both the project's estimated capital expenditures (CAPEX) and operating costs (OPEX). It is expected that the additional costs incurred to truck the ore from the deposit to the new plant location in Baie-Comeau would be more than offset by the resultant savings. The new plant location is also expected to lead to a reduction in greenhouse gas emissions.
The reductions described hereafter were estimated by evaluating the impact of the location change on the major expense accounts (CAPEX & OPEX), as identified in the Company's Preliminary Economic Assessment (''PEA") announced in April 2013.
CAPEX and OPEX Reduction Opportunities for Upcoming Feasibility Study
The alternative concentrator location near Baie-Comeau would present the Company with the following opportunities to reduce the CAPEX and OPEX of the Lac Guéret Project:
- The size of the Lac Guéret campsite would be reduced, as it would only need
- to accommodate the mine workers. Costs reductions are expected from the associated infrastructure and campsite maintenance (accommodation, transportation, catering, insurance, leisure, etc.);
- No campsite would be needed at the new concentrator site due to its proximity to an urban center;
- The new plant location would access Baie-Comeau's existing hydroelectric power infrastructure that is low-cost, and energy efficient; thus alleviating the need for diesel power generation and reducing the overall power costs and greenhouse emissions;
The Company's Management estimates that these adjustments could result in CAPEX reductions of up to 8%, and OPEX reductions of up to 20% in comparison to the results reported in the PEA.
Management & Operational Efficiencies
By relocating the concentration plant, the majority of the Company's workforce would reside in the urban area of Baie-Comeau, closer to family and recreation. The Company believes that this would positively impact the quality and availability of the potential workforce for the project, as well as improve labour retention.
Additionally, the new plant location would be near an urban center, which would provide easier access to service providers required for maintenance and several other operational services.
Revised Timeline
Due to trade-off studies and subsequent optimization analyses, the publication of the Feasibility Study is now expected in the second quarter of 2015.
The new plant location that will be considered in the Feasibility Study could require the completion of a new environmental baseline study and an environmental impact assessment will also be required to obtain construction and operation permits. These studies will need to be conducted over a prescribed period of time in order to consider seasonal changes. As such, the Company now expects construction to begin in 2016.
Benoit Gascon, President and CEO of Mason Graphite commented, "The positive economical impacts of this trade-off study speak for themselves. The high grade of our mineral deposit presents us with a rare opportunity in the natural graphite industry. We are pleased to have conducted this analysis prior to further advancing the Feasibility Study as the alternative Baie-Comeau plant location could improve our project at many levels, including an operation that would be more environmentally friendly."
Qualified Person
Jean L'Heureux, Eng., Mason Graphite's Executive Vice-President Process Development and a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the scientific and technical content of this press release.