Copper Mountain Announces Q3 2018 Production Results

Copper Mountain Mining Corporation (TSX:CMMC | ASX:C6C)  (“Copper Mountain” or the “Company – http://www.commodity-tv.net/c/search_adv/?v=298239) announces Q3 2018 production results for its Copper Mountain Mine, located in southern British Columbia.  All results are reported on a 100% basis. 

Production for the third quarter 2018 was 18.3 million pounds of copper, 7,500 ounces of gold and 64,900 ounces of silver, which was in line with expectations. The Company guided that third quarter 2018 copper production would be approximately 10% lower than the second quarter due to lower copper grades being mined. Actual copper production was 8.5% lower than the second quarter. Fourth quarter copper production is expected to be the strongest quarter of 2018.  The Company remains on track to achieve 2018 annual production guidance of 80 million pounds of copper (+/-5%).

Copper equivalent production was 22.0 million pounds and was down only 4.8% compared to the second quarter due to higher gold production as a result of increased gold grade and recovery after the installation of a flash flotation circuit in the concentrator.

The mine continued with the next pushback on Pit#2 west, which commenced in the second quarter. The strip ratio in the third quarter was 2.3 to 1, lower than the second quarter.  Mill throughput averaged 41,300 tonnes per day, with copper recovery of 79.1% and average feed grade of 0.28% copper.  Grade was lower in the third quarter but was as guided and in line with the mine plan.

“Copper Mountain Mine operated on plan and as expected this quarter,” commented Gil Clausen, Copper Mountain’s President and CEO. The fourth quarter will be our strongest quarter this year and we are on track to achieve our production guidance.  Copper Mountain continues to demonstrate predictability and consistency.”

Q3 2018 Financial and Operating Results Conference Call and Webcast

Copper Mountain will release Q3 2018 financial and operating results before the market opens on Wednesday, October 31, 2018. The Company will hold a conference call on Wednesday, October 31, 2018 at 7:30 am (Pacific Standard Time) for management to discuss the Q3 2018 financial and operating results.

Live Dial-in information

Toronto and international:          647-427-7450

North America (toll-free):            1-888-231-8191

To participate in the webcast live via computer go to:

https://event.on24.com/wcc/r/1833337/29A6E0EF562FD710672ED8952756F33F

Replay call information

Toronto and international:          416-849-0833                   Passcode: 9499185

North America (toll-free):            1-855-859-2056               Passcode: 9499185

The conference call replay will be available from 10:30 am (PST) on October 31, 2018 until 20:59 pm PST on November 7, 2018. An archive of the audio webcast will also be available on the company’s website at http://www.cumtn.com.

About Copper Mountain Mining Corporation:

Copper Mountain’s flagship asset is the 75% owned Copper Mountain mine located in southern British Columbia near the town of Princeton. The Copper Mountain mine produces about 90 million pounds of copper equivalent per year with a large resource that remains open laterally and at depth. Copper Mountain also has the permitted, development stage Eva Copper Project in Queensland, Australia and an extensive 4,000 km2 highly prospective land package in the Mount Isa area. Copper Mountain trades on the Toronto Stock Exchange under the symbol “CMMC” and Australian Stock Exchange under the symbol “C6C”.

Additional information is available on the Company’s web page at www.CuMtn.com.

Note:  This release contains forward-looking statements that involve risks and uncertainties.  These statements may differ materially from actual future events or results.  Readers are referred to the documents, filed by the Company on SEDAR at www.sedar.com, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.  The Company undertakes no obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statement.

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Cypress Development Announces Strong PEA Economics And Increased Resource At Clayton Valley Lithium Project

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1. Introduction

Despite negative sentiment in commodities and especially lithium of late, Cypress Development (TSXV: CYP; OTC: CYDVF; FRA: C1Z1) keeps delivering the goods at their Clayton Valley Lithium project in Nevada at high speed. A Preliminary Economic Assessment (PEA) was announced at September 6, 2018, and the resulting economics were impressive. An after-tax NPV of US1.45B at a 8% discount rate and an after-tax IRR of 32.7% (LCE price of US$13,000/t) indicate the large size of Clayton Valley, making it a potential buyout or JV target for one of the major players like nearby Albemarle. This is exactly the kind of growth CEO Bill Willoughby had in mind when he signed up with Cypress Development, as he saw the potential for the large assets of Cypress one day gaining serious attention. Let’s have a look where Clayton Valley stands at the moment, after this PEA.

All presented tables are my own material, unless stated otherwise.

All pictures are company material, unless stated otherwise.

All currencies are in US Dollars, unless stated otherwise.

2. PEA

The new PEA wasn’t just an impressive study in itself, as it beat my expectations for NPV (my hypothetical NPV7.5 @US$12,000 would come in at US$966M vs the PEA NPV8 of US$1260M, on the other hand the hypothetical IRR at 33.8% was slightly better vs the PEA IRR of 29%), Cypress Development also updated their resource statement. Notwithstanding the first NI43-101 compliant resource estimate of 6.5Mt LCE which was already world class, the company now has almost 9Mt LCE (see green markers).

Again, as a continuous reminder, examples of world class sized LCE deposits in each category are brine projects like Cauchari/Olaroz (Orocobre: 6.4Mt LCE, SQM/Lithium Americas 11.7Mt LCE), clay projects like Sonora or Thacker Pass (Bacanora: 7.2Mt LCE/Lithium Americas: 8.3Mt) or hard rock projects like Whabouchi (Nemaska: 4.06 Mt LCE). Although Cypress doesn’t have reserves yet, for size it is the largest clay-hosted deposit in the Americas at the moment.

For the PEA the company has elected to use only the high grade portion to the east of the deposit (see red marker), with an average grade of plant feed ore of 1012 ppm Li. This is a viable option as the deposit is so big, that high grading it results in a life of mine of 40 years at an annual production of 24,000t LCE anyway.

In order to discuss the PEA metrics a bit further, it is always useful to see those metrics lining up with the data of other peer projects. In this case there are 3 clayhosted projects (although Rhyolite Ridge of Global Geoscience has low clay content), of which Bacanora’s Sonora is hectorite clay which means it can’t be leached by acid at all, and needs very expensive roasting. Thacker Pass of Lithium Americas seems to have non hectorite bearing host rock (smectite and Illite clay) but sample material is called hectorite by metallurgical description, nevertheless they still can use acid leaching, and Rhyolite Ridge of Global Geoscience can use acid leaching as well. This last project is the only one without a completed economic study, but some work has been done already for a small (end target is a 30y LOM project) PFS study, and Australian companies can report these findings easier than Canadian ones, so some metrics are already available for the audience. On a sidenote: Global Geoscience has hired Amec Foster Wheeler for their upcoming PFS, and I consider Amec the single best engineering firm out there by a countrymile, so in my view this study could become a future reference for likewise projects. Here we go.

I have normalized the post-tax NPV and IRR for a lithium carbonate equivalent (LCE) price of $10,500/t, which I deem a reasonable and fairly conservative lithium product price. As we can see in the next chart, these prices have been much higher for the last 2 years or so, but the long-term contract prices are hovering around $13,000/t now, and as far as I am concerned this is the market where serious producers are doing business, and not the much smaller spot market, where prices are much more volatile:

I can see this bottoming easily at $10,000-11,000/t so $10,500/t seems like a realistic midpoint to me. The very bearish Morgan Stanley report was timed to perfection in itself, but I don’t see for example SQM bringing online the projected 500kt LCE anytime soon, resulting in the dreaded oversupply from the end of 2019 onwards, as they already have big issues expanding modestly as it is. It might be the case that the trade war between the US and China is putting the brakes on the world economy, and in turn this could have an effect on electric vehicle (EV) demand which means less demand for batteries and thus lithium, but as I don’t have a good grasp on the machinations of the lithium spot market, I don’t really have a good explanation on why lithium product prices dropped off so sharply over there the last 6 months or so. Maybe the negative commodity sentiment influenced small traders working with the most risky metals the most. Enough about the lithium price, let’s continue with the PEA.

When we look at the peer comparison, it will be clear that Thacker Pass comes closest to Clayton Valley, as both projects use acid tank leaching, and the ore is claystone hosted, although the ore from Thacker Pass seems to have slightly hectorite characteristics as mentioned. To what extent isn’t really clear, but what is clear is that opex and the capex/tpd ratio of Thacker Pass are significantly influenced by this, as both are much higher than the numbers for Clayton Valley. One of the reasons is that Thacker Pass needs about triple the amount of acid per tonne ore. Acid consumption is by far the biggest opex item for Cypress, as can be seen here:

And the acid plant isn’t cheap either.

When we look at the PFS of Thacker Pass, we see relatively equally high costs for utilities & reagents, and raw materials for the acid plant accounted for like this: reagents are $18.14/t,  raw materials for the acid plant $22.18/t, mining costs are $7/t, so this adds up pretty quickly, resulting in much higher opex compared to Clayton Valley. On a side note, a further item in the Thacker Pass PFS that I found to be interesting was the dewatering pump capacity with a peak of 340m3/hour, which is substantial. This might even influence the processing of mined claystone, as wet ore behaves differently.

The absence of hectorite ore at Clayton Valley is another reason that CEO Willoughby was excited to join Cypress. As he mentioned to me: “Early on, I saw leach tests from surface samples on Cypress’ property which showed the lithium was soluble in water and dilute acid. This was a good indication the lithium wasn’t present in hectorite.” I asked him if he didn’t think 10% contingency on opex was on the low side, and acid consumption could increase after further testing, and the answer was he even thinks they can go from 125kg acid/t ore to 100kg acid/t ore, which would shave off another estimated $1.5-2/t of opex, increasing after-tax IRR with an estimated 2-3% and the after-tax NPV8 with an estimated $40-60M.

In case you wondered what the item Indirect Capital Costs stands for, as it isn’t really the margin for error, have a look at the indirect costs of Thacker Pass.

As Thacker Pass has more substantial stripping costs because of a higher strip ratio, Cypress has almost no stripping/pre-stripping as mineralization frequently begins at surface at Clayton Valley.   

As no blasting or drilling is required, mining is very simple. Engineering firm GRE evaluated four options for mine equipment and mill feed transportation, and selected an in-pit feeder-breaker with slurry pumping for the base case.

The only major piece of mobile equipment is a front-end loader to feed the in-pit feeder-breaker.

Such earth-moving monsters are capable of scooping up 40-70t in one move, meaning one front-end loader could feed the processing plant at nameplate capacity. Waste mining is minimal, amounting to a total of 6Mt over the 40 year mine life, resulting in the very low strip ratio of 0.025:1.

The plant design of Clayton Valley includes agitated tank leaching, and a multi-stage thermal-mechanical evaporation system for concentrating leach solution. Slurried feed is transported to the mill where lithium extraction is achieved through leaching at elevated temperatures with dilute sulfuric acid. The sulfuric acid concentration is targeted at 5%, with the addition of concentrated acid delivered from the on-site 2,000 tpd acid plant. Steam from this acid plant will be used for heating in the leaching and evaporation stages of processing.

The retention time of pregnant solution in the leach circuit is estimated at 4 to 6 hours with acid consumption estimated at 125 kg per tonne of feed as mentioned. This is an advantage compared to the cheaper vat leach method which Global Geoscience intends to use, which takes much more time (days) and would need a much bigger plant for the same production. Net recovery of lithium throughout processing is estimated at 81.5%. Tailings are aimed to be dry stacked, which will improve permitting procedures.

Process water for the operation will be obtained by recycling barren leach solution after treating in a reverse osmosis plant, and by introducing fresh make-up water, estimated at 345 m3/hour and delivered via pipeline from a well field located off-site. Reducing fresh water needs as much as possible is also an advantage in Nevada, which is known for its water rights which can be owned by private individuals, and complicated permitting around using these water rights.

3. Next steps

The biggest issue for Cypress Development is the viability of the recovery method. Preliminary test results continue to be positive according to management, but the company has to prove their method at a commercial scale at one point. When discussing this, and the potential need for a pilot plant, with CEO Willoughby, he answered that a pilot plant wasn’t needed to complete a PFS, this was only needed for a FS. They are already looking at acquiring an existing pilot plant for this purpose. At the same time, he indicated that he wasn’t convinced they would have to get a PFS first before going towards a FS.

In his view the recently completed PEA was already at the level of a PFS with respect to cost estimates, only some more drilling and metallurgical work would be needed for a PFS. He would rather see that Cypress would spend money on a FS in that case. Such an advanced study would be scheduled for completion by next summer by his estimates. As the treasury contains just C$500k at the moment, the company needs to raise sufficient cash in order to complete permitting and the FS. This means they have enough money to do additional met work as recommended by GRE. Cypress intends to proceed with this recommendation as soon as possible, beginning with the collection of representative sample material.

The release of the PEA caused an unexpectedly fierce liquidity event, causing the share price to drop over 25% in a few days. Unexpected, as the PEA economics are robust, and the share price had held up strongly compared to almost all lithium competitors, who already shed 25-60% in the last few months, after overall- and lithium sentiment turned negative. It is possible that investors expected or hoped for a lower capex, as it would be a hugely dilutive event to finance capex by itself, at such a tiny market cap of C$19.8M. But in my view a US$482M capex is below average for the usual lithium project, as these are big ventures, and at some point Nemaska and Orocobre were tiny too.

A PEA is still early stage as a development stage, so it usually gets discounted quite a bit until it advances further, depending on the various parameters and economics of the project. With Cypress, the recovery method needs proof so I can imagine the markets are still willing to assign an increased discount to this as long as the method hasn’t been proven on a commercial scale. When Cypress manages to achieve success in this regard, the re-rating should be pretty significant, as the conservative NPV8 @US$10,500/t Li is about 62 times the current market cap.

4. Conclusion

The resource update for Clayton Valley ranks this project as the largest lithium clay deposit in the Americas, and the accompanying PEA indicated robust economics, holding up well at 20% lower lithium product prices. This comes in handy, as lithium prices are having a hard time these days. After this PEA, Cypress Development will probably start to appear on the radar of most major lithium producers/processors, and management already indicated they received interest from several of those parties to talk business. An important part of convincing others is proving up recovery at a commercial scale, and it is up to CEO Willoughby, who has a PhD in mining engineering and metallurgy, to lead this effort. Management is deciding now whether they want to proceed with a PFS or a FS, which will determine their financing needs and timeline. I am curious what their next steps will be, as an interested shareholder.

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter at www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.

Disclaimer:

The author is not a registered investment advisor, and has a long position in this stock. Cypress Development is a sponsoring company. All facts are to be checked by the reader. For more information go to www.cypressdevelopmentcorp.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.

Please find tables and pictures in the attachement.

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New material for generators: thyssenkrupp Schulte supplies material for innovative aluminum fan blades

thyssenkrupp Schulte, a company of thyssenkrupp’s Materials Services business unit, has collaborated with Siemens to develop new fan blades made from a special aluminum alloy. The innovative material is used among other things in generator cooling fans.

Gerald Mulot, sales manager for major customers at thyssenkrupp Schulte, believes this will deliver significant cost benefits to the customer: “Being in close proximity to our customers means we can check their production processes regularly for potential savings. That was the case with the fan blades. The switch from steel to aluminum will provide Siemens with the same functionality at significantly lower cost.”

The optimized part was identified as part of thyssenkrupp Schulte’s central key account support. Extensive tests were conducted and trial deliveries met all requirements.

thyssenkrupp Schulte will now supply Siemens with several tons of aluminum mill products per year from its logistics center in Dortmund on a just-in-time basis. “That will allow Siemens to concentrate fully on its core activities,” says Mulot.

thyssenkrupp Schulte GmbH is a materials partner for carbon and stainless steels and nonferrous metals, providing made-to-measure products for over 70,000 customers in industry, construction and the trades. The company has a broad range of flat products, sections and tubes for all requirements which can be cut to customer specification. Closeness to customers is another key advantage: With over 40 sites in Germany, thyssenkrupp Schulte is always close at hand and can serve customers throughout the country quickly and reliably. A wide product range, professional advice and extensive services round out the portfolio of Germany’s biggest materials distributor.

About Siemens Power & Gas Division

The Siemens Power and Gas Division offers utilities, independent power producers, engineering, procurement and construction companies (EPCs), and oil and gas customers a broad spectrum of products and solutions for the environmentally-compatible and resource-saving generation of power from fossil fuels and renewable sources of energy and for the reliable transportation of oil and gas.

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New material for generators: thyssenkrupp Schulte supplies material for innovative aluminum fan blades

thyssenkrupp Schulte, a company of thyssenkrupp’s Materials Services business unit, has collaborated with Siemens to develop new fan blades made from a special aluminum alloy. The innovative material is used among other things in generator cooling fans.

Gerald Mulot, sales manager for major customers at thyssenkrupp Schulte, believes this will deliver significant cost benefits to the customer: “Being in close proximity to our customers means we can check their production processes regularly for potential savings. That was the case with the fan blades. The switch from steel to aluminum will provide Siemens with the same functionality at significantly lower cost.”

The optimized part was identified as part of thyssenkrupp Schulte’s central key account support. Extensive tests were conducted and trial deliveries met all requirements.

thyssenkrupp Schulte will now supply Siemens with several tons of aluminum mill products per year from its logistics center in Dortmund on a just-in-time basis. “That will allow Siemens to concentrate fully on its core activities,” says Mulot.

thyssenkrupp Schulte GmbH is a materials partner for carbon and stainless steels and nonferrous metals, providing made-to-measure products for over 70,000 customers in industry, construction and the trades. The company has a broad range of flat products, sections and tubes for all requirements which can be cut to customer specification. Closeness to customers is another key advantage: With over 40 sites in Germany, thyssenkrupp Schulte is always close at hand and can serve customers throughout the country quickly and reliably. A wide product range, professional advice and extensive services round out the portfolio of Germany’s biggest materials distributor.

About Siemens Power & Gas Division

The Siemens Power and Gas Division offers utilities, independent power producers, engineering, procurement and construction companies (EPCs), and oil and gas customers a broad spectrum of products and solutions for the environmentally-compatible and resource-saving generation of power from fossil fuels and renewable sources of energy and for the reliable transportation of oil and gas.

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New order from Jindal Group

JSW Steel Ltd. in Toranagallu, India, belonging to Jindal Group, has awarded SMS Concast, a company of SMS group (www.sms-group.com), an order covering a 5(6)-strand high-speed billet caster. This project is part of a bigger expansion plan, and the main objective is a productivity increase.

The existing steel plant consists of a 160-ton electric arc furnace, ladle furnace, billet caster and rolling mill and shall increase the annual production to 1,500,000 tons of steel after installation of the new billet caster. The caster will be designed for fast casting of square billets with an edge length of 165 millimeters.

SMS Concast’s caster configuration will allow the common use of spares in two different steel meltshops. This is one big feature to decrease OPEX.

Furthermore, latest technology will be applied to reach the specified productivity and OPEX targets. One special product is the lowmaintenance oscillation drive called CONDRIVE, another the advanced INVEX® mold technology.

The CONDRIVE mold oscillation represents a totally new approach combining the advantages of hydraulic and mechanic drives in one. Due to the innovative torque drive, the amplitude, frequency and oscillation profile can be adjusted online and independently. Thus it grants full functionality, however without the hydraulic system drawbacks in terms of maintenance and piping. In this context, CONDRIVE is one part of the advanced maintenance concept with a view to reduced spare parts inventory.

Regarding productivity, the SMS Concast-developed INVEX® mold allows for very high strand throughputs in the area of 790 kg/min. The special tube geometry and enhanced water cooling features allow the mold to achieve efficient heat transfer and thus a more uniform solidification at the faces and in the corner areas, thus enabling higher casting speeds.

“Considering the very good performance of the existing SMS Concast equipment, its advanced technology and reduced OPEX, we have decided to go for another co-operation in order to implement our expansion plan,” says Mr. Purushottam Prasad from JSW Steel Ltd.

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ArcelorMittal Bremen will upgrade its hot strip mill with the aid of SMS group

ArcelorMittal Bremen, Germany, has contracted SMS group (www.sms-group.com) to modernize its hot strip mill with the objective of improving hot strip tolerances.

The upgrade will comprise the installation of a CVC®plus work roll shifting system with integrated bending mechanism and of new drive spindles in the first three mill stands of the finishing line, plus the installation of a new PCFC® (Profile, Contour and Flatness Control). The modernization will provide ArcelorMittal Bremen with a powerful actuator to influence strip profile and strip flatness.

The facility in Bremen is the third hot strip mill of the ArcelorMittal group to be equipped with the CVC®plus system (Continuously Variable Crown) by SMS group within a short period. Axial shifting of the work rolls, that come with the special CVC®plus crown, combined with roll bending system and the technological process model PCFC® permit the roll gap to be perfectly adjusted to changing process conditions and hence to produce strips with close geometrical tolerances. The drive spindles to be supplied to ArcelorMittal Bremen will be SIEFLEX® HT gear-type self-aligning spindles (High Torque) developed by SMS group.

Finishing stands F1 to F3 will be modernized in two steps during the regular annual maintenance downtimes in October 2018 and October 2019. The PCFC® will be integrated before the second downtime already and run in parallel to the existing control system. Thanks to this so-called shadow mode, it will be possible to check all functions, interaction with the automation environment as well as model adjustment prior to commissioning, and finally to ensure the smooth start of production.

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Lianxin Steel and Shandong Laigang Yongfeng order TMbaR mill from SMS group

For decades, SMS group (www.sms-group.com) has been a pioneer in and promoter of thermomechanical rolling. Now, two Chinese companies, Lianxin Steel and Shandong Laigang Yongfeng Steel, have decided to employ TMbaR, the process developed by SMS group for thermomechanical rolling of rebar.

With SMS group’s TMbaR process, it is possible to produce fine-grained final products while reducing the content of expensive alloys in the input stock.

Thermomechanical rolling is a forming process in which final reduction is carried out within a defined temperature range leading to specific properties of the rolled stock. Thus, sufficient capacity for cooling and equalization has to be provided for in the plant design. The lower rolling temperatures (750 to 820 degrees Celsius) require higher rolling forces and consequently wire rod blocks capable of sustaining very high loads. Under these rolling conditions, grain sizes that in conventional rolling would typically range between ASTM 8 and 10 can be improved to ASTM 12 with thermomechanical rolling.

Key components of the SMS group TMbaR technology are a loop line with water boxes for controlled cooling and equalizing and a MEERdrive® finishing block. Besides its rigid design, which allows rolling forces so far unattained in the market, the MEERdrive® block is equipped with a single drive which provides the flexibility required to optimally control recrystallization after rolling.

Two companies have now decided in favor of the TMbaR technology: Lianxin Steel and Shandong Laigang Yongfeng.

Lianxin Steel has ordered a TMbaR mill for its Dafeng site. The plant will be designed for an annual production of 1,000,000 tons of rebar with diameters ranging between 8 and 40 millimeters at a maximum rolling speed of 45 meters per second. SMS group will supply all rolling mill stands for the roughing, intermediate and finishing mills, including two six-stand MEERdrive® finishing blocks, shears, water boxes as well as the double HSD® system. Additionally, the complete package of electrical and automation systems as well as supervision of erection and commissioning are in the scope of supply. The plant is scheduled to be started up by the end of 2018.

The TMbaR mill for Shandong Laigang Yongfeng´s Dezhou site is part of a capacity conversion program using the EAF-based production route to replace the existing facilities. The new plant will be designed for an annual production of 1,000,000 tons of rebar in diameters ranging between 8 and 32 millimeters. This includes straight bars with diameters between 8 and 25 millimeters to be rolled at a maximum speed of 45 meters per second and bar-in-coil in diameters ranging from 8 to 32 millimeters to be rolled at a maximum speed of 35 meters per second. Yongfeng is going to install two five-strand continuous casting machines supplied by SMS Concast as well as a new high-speed rolling area, including two six-stand MEERdrive® finishing blocks, cooling and equalizing lines, a high-speed outlet consisting of a two-strand HSD® (High-Speed Delivery) system with dividing shears and pinch roll unit as well as a VCC® (Vertical Compact Coiler) system for coils weighing up to five tons. Additionally, the electrical and automation systems for the three mechanical packages and supervision of erection and commissioning will be supplied. The plant is scheduled to start production in 2019.

Both companies put their trust in the long-standing experience of SMS group and its one-step-ahead TMbaR technology, which will allow Lianxin Steel and Shandong Laigang Yongfeng to respond better and faster to market demands, achieve improved material properties and save on alloys and operating costs.

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Successful modernization of AOD converter at SěAH CSS

The 100-ton AOD converter at the SěAH CSS stainless steel mill in Changwon, South Korea, was successfully re-commissioned in March 2018, after installation of an electro-hydraulic torque retainer from SMS group.

The purpose of the modernization was to minimize the destructive forces acting on the gears, bearings and converter car during gas injection.

The scope of supply of SMS group (www.sms-group.com) comprised an electro-hydraulic torque retainer including electrical equipment and automation systems as well as the supervision of erection and commissioning.

The installation of the torque retainer was performed during a scheduled maintenance standstill and completed within ten days, including cold and hot commissioning. Hot commissioning even took place two days ahead of schedule under regular production conditions. The guaranteed values were fully reached. Thanks to the new electro-hydraulic torque retainer from SMS group, the dynamic loads on the entire converter equipment have been significantly reduced. This is the result of the successful cooperation between the teams from SěAH and SMS group.

Seungheon Lee, General Manager Steelmaking Facility Team: “The new torque retainer from SMS group has significantly reduced the vibrations of the AOD converter. We experience the benefits of this modernization every day. Maintenance costs will be reduced significantly. We are very satisfied.”

SěAH Changwon Integrated Special Steel produces stainless steel, tool steel and carbon steel at a production volume of 1.2 million tons per year. The produced high-tech steel grades are used in a wide range of applications, for example in vehicles, machinery, aircrafts, nuclear power plants, shipbuilding and electronics.

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Firesteel Resources Boosts Operating Team Strength with the Appointment of Seasoned, International Gold Mining CFO

FIRESTEEL RESOURCES INC. (TSX-V: FTR) (“Firesteel” or the “Company” – https://www.youtube.com/watch?v=svqa541JNhA&t=3s) today announced that it has appointed Gregory Duras as Chief Financial Officer for Firesteel.

Gregory has over 20 years of experience working in the resource sector and over 10 years of experience working as Chief Financial Officer for various publicly traded companies including Avion Gold Corp. which had mining operations in Mali and Burkina Faso.

Gregory has an abundance of international mining experience, having served as Vice President of Finance and Administration at S.C. Rosia Montana Gold Corporation, a mineral exploration and mining development company based in Romania, and more recently working in the resource sector based in Seville, Spain.

Gregory has a Bachelor of Administration from Lakehead University and is a Certified Professional Accountant (“CPA”). 

Michael Hepworth, President and CEO of Firesteel said; “Given the international nature of our operations and the fact that we are set to begin production in the 4th quarter of 2018, we have been intent on building a competent management team with appropriate, international business and hands on gold mining experience. Gregory is thus a welcome addition to the team, having been responsible for the CFO function in several international gold mining operations.”

“Firesteel wishes to thank Grant Smith for his contributions to Firesteel’s success while he was CFO. We wish him every success in his future endeavors.”

About the Company

Firesteel is an exploration-stage junior mining company engaged in the acquisition and exploration of prospective precious and base metal properties in Canada and stable jurisdictions around the world. Firesteel is currently working to evolve from an exploration company to becoming a junior producer.

On April 7, 2017, Firesteel first announced the signing of heads of agreement with Nordic Mines AB to form a joint venture to operate and eventually acquire 100% of Nordic Mines Marknad, a wholly owned subsidiary of Nordic Mines AB. Nordic Mines Marknad owns 100% of Nordic Mines OY, the operator of the fully permitted and past producing Laiva Mine near Raahe in Finland.

Firesteel recently completed an updated Resource Estimate prepared in accordance with NI 43-101 guidelines and CIM standards (Firesteel Press release dated August 21, 2017).   The results of that study include:

The mineral resources presented here were estimated using a block model with a block size of 9 m by 9 m by 9 m sub-blocked to a minimum of 3 m by 3 m by 3 m using ID3 methods for grade estimation.  All mineral resources are reported using a pit constrained gold cut-off of 0.40 g/t Au.  

 Mineral resources which are not mineral reserves do not have demonstrated economic viability.  The estimate of mineral resources may be materially affected by environmental permitting, legal, title, socio-political, marketing, metals prices or other relevant issues.

  • Nordic Mines OY
    • 250 tonne per hour autogenous Outotec mill
    • Cyanide leaching circuit
    • First dore cast in 2011
    • Conventional open pit mine
    • Excellent local infrastructure
  • 2 additional early stage gold properties in Finland.

Disclosure: Companies typically rely on comprehensive feasibility reports on mineral reserve estimates to reduce the risks and uncertainties associated with a production decision.  The Company has not completed a feasibility study on, nor has the Company completed a mineral reserve estimate at the Laiva Mine and as such the financial and technical viability is deemed to have higher risk than if this work had been completed.  Based on historical engineering and geological reports, historical production data and current engineering work completed or in process by Firesteel, the Company intends to move forward with the development of this asset.

The Company further cautions that it is not basing any production decision on a feasibility study of mineral reserves demonstrating economic and technical viability, and therefore there is a much greater risk of failure associated with its production decision. In addition, readers are cautioned that inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves.

Firesteel currently has one highly prospective property in British Colombia.

The Star property is currently operated under a Joint Venture agreement between Firesteel (49%) and Prosper Gold. (TSX-V: PGX) (51%).

About Pandion Mine Finance, LP

Pandion is an affiliate of PFL Raahe Holdings LP and is a mining-focused investment firm backed by MKS PAMP Group and Ospraie Management, LLC that provides flexible financing solutions to developing mining companies.

Qualified Person

The scientific and technical information in this news release has been reviewed and approved by Paul Sarjeant, P.Geo., a Qualified Person under National Instrument 43-101 and a director of the Company.

For a detailed overview of Firesteel Resources Inc. please visit:

www.FiresteelResources.com

For further information, please contact:

Michael Hepworth

President and Chief Executive Officer

(416) 419 5192

mhepworth@firesteelresources.com

www.firesteelresources.com

In Europe:

Swiss Resource Capital AG

Jochen Staiger

info@resource-capital.ch

www.resource-capital.ch

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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

Advisory Regarding Forward Looking Statements

This news release contains forward-looking statements. Users of forward-looking statements are cautioned that actual results may vary from forward-looking statements contained herein. Forward-looking statements include, but are not limited to: expectations, opinions, forecasts, projections and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. While the Company has based these forward-looking statements on its expectations about future events as at the date those statements were prepared, the statements are not a guarantee of the Company’s future performance.  Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. 

The Company’s forward-looking statements are expressly qualified in their entirety by this cautionary statement and are made as of the date of this new release.  Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, events, results or circumstances or otherwise.

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Panoro Reports Positive Preliminary Economic Assessment for Antilla Copper Project Heap Leach & SX/EW Operation

Panoro Minerals Ltd. (TSXV: PML, Lima: PML, Frankfurt: PZM) (“Panoro”, the “Company”) is pleased to announce that it has received the results of an independent Preliminary Economic Assessment ("PEA") of the Company’s 100% owned Antilla project in Peru. The Antilla project is a copper-molybdenum porphyry deposit, located 140 km south west of the city of Cuzco, in the Apurimac region in Southern Peru.

Highlights

  • Pre-tax Estimates:
  • NPV (7.5%) of US$ 519.8 million;
  • IRR of 34.7%; and
  • Payback of 2.6 years.
  • After-tax Estimates:
  • NPV (7.5%) of US$ 305.4 million;
  • IRR of 25.9%; and
  • Payback of 3.0 years.
  • Conventional open pit mine focused on supergene copper sulphides;
  • Heap Leach and Solvent Extraction Electrowinning (SX/EW) process;
  • Design throughput of 20,000 tonnes per day with an operational mine life of 17 years
  • Low waste to mill feed ratio of 1.38:1;
  • Average annual payable copper of 46.3 million pounds, as Cathodes;
  • Average direct cash costs (C1) of US$1.51 per pound of payable copper;
  • Initial Project capital costs of US$ 250.4 million, including contingencies; and
  • Good potential for discovery of additional supergene mineralization adjacent to the current mineral resource area.

Having completed the optimization of the Antilla Project, the Company will be completing a strategic review of the development and financing plans to put the Antilla Project on the road to development.

The PEA was prepared by Moose Mountain Technical Services Ltd. (“MMTS”) in accordance with the definitions in Canadian National Instrument 43-101. The PEA is based on a Mineral Resource estimate completed by Tetra Tech Inc. (“Tetra Tech”) in December 2013, based on 2,919 metres of drilling from legacy campaigns (2003-5), 9,130 metres of drilling by Panoro (2008), and 2,242 metres of drilling during a joint venture agreement with Chancadora Centauro SA (CHC) in 2010. The Mineral Resource estimate includes primary and supergene sulphides, as well as mixed hypogene and supergene copper mineralization.

The PEA is considered preliminary in nature. The mine plan of the PEA includes 113.3 million tonnes of Indicated Mineral Resources and 5.4 million tonnes of Inferred Mineral Resources.   Inferred Mineral Resources are considered too speculative to have the economic considerations applied that would enable classification as Mineral Reserves. There is no certainty that the conclusions within the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Luquman Shaheen, President & CEO of Panoro Minerals states, “The redesign of the Antilla Project has resulted in significantly improved project economics.  The mine plan has focused on the higher grade, near surface secondary sulphides, which are amenable to processing through heap leaching, solvent extraction, and electrowinning (LIX-SX-EW).  As a result, the initial capital costs have been reduced by 59%, the C1 cash costs reduced by 18%, the C2 cash costs by 23% and the sustaining capital required for a tailings facility has been eliminated. The base case, after tax NPV(7.5) has increased 36%, the IRR has increased 11% and the payback period has been reduced by 27%.  Over 95% of the mineralized material contained in the mine plan is classified as Indicated. The improved Antilla Project is now near the lower quartile of new copper projects in terms of both cash costs and capital intensity.  The much reduced $250 million initial capital cost will facilitate a broader range of strategic financing and/or development approaches to advancing the Antilla Project through feasibility studies and into development and operation.  We are very pleased to have achieved the objective of optimizing the Antilla Project and look forward to advancing our strategic plan. We continue focussing on our Flagship Cotabambas Project where our investment programs for 2018 and 2019 are focussing on enhancing the project economics and growth profile through exploration success.”

Economics

The table below summarizes base case economic metrics for the project as well as its sensitivity to the price of copper

Project economics were estimated on the basis of long-term copper price of US$3.05/lb.  The long-term forecasts were derived from prices periodically published by large banking and financial institutions and were applied to years 4 to 17 of the mine life.  Shorter term copper price estimates were used for Years 1 to 3 of the mine life reflecting higher price forecasts in the shorter term.  For the base case, Years 1 to 3 of the mine life used estimated copper prices of $3.20, $3.15 and $3.10, respectively.  Molybdenum is not included in the proposed process recovery and not included in the project economics.

Mineral Resources

The PEA was based on a Mineral Resource model prepared by Tetra Tech, which is documented in a technical report filed on Sedar, dated December 16, 2013.

Mineral Resources were estimated by Qualified Person Paul Daigle, PGeo. (APGO #1592). A block model was generated with grade estimation constrained by modeled mineralization wireframes. Mineralization is mined from an open pit and treated using a conventional hydrometallurgical flow sheet. Copper equivalent (CuEq) cut-offs were used to report the mineral resource. Metal prices: copper – US$3.25/lb and molybdenum – US$9.00/lb and metallurgical recoveries: copper – 90% and molybdenum – 80% were applied in the equivalency calculation.

Mining and Processing

The PEA incorporates an open pit mining operation using conventional truck and shovel methods delivering mineralized material to the heap leach pad.  Mining will be done using contractors. The estimated 17 year life of mine includes 118.7 million tonnes of mineralized leach pad feed plus 163.4 million tonnes of waste rock resulting in an average waste:process feed ratio of 1.38:1. The average life of mine leach pad head grade is 0.43% copper. The leach material placement is planned at an average rate of 20,000 tonnes per day. The waste rock will be placed in a storage area to the west of the pit, in between the pit and the leach pad.

Of the 118.7 million tonnes of leach material mined from the open pit, 117.1 million tonnes is classified as supergene enriched material with the balance of the 1.6 million tonnes being classified as overburden, leach cap or primary sulphides.

The sub-set of the Mineral Resources contained within the ultimate pit and included in the mine plan is 113.3 million tonnes averaging 0.45% Cu classified as Indicated Resources, and 5.4 million tonnes averaging 0.26% Cu classified as Inferred Resources. The reader is cautioned that the Inferred Resources included in the mine plan are considered too speculative geologically to have economic considerations applied to them that would enable categorization as Mineral Reserves. There is no certainty that Inferred Resources will be upgraded to Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Haul trucks will deliver the run of mine, mineralized material to a two-stage crushing plant. The product from the primary crusher will feed a secondary crushing station whose product will then be stored in a crushed ore stockpile. The crushed material will be loaded to trucks and delivered to the synthetic lined valley-fill heap leach facility for irrigation with sulfuric acid and ferric solutions. The pregnant leach solution (PLS) will be recovered from the heap leach operation and piped to a conventional solvent extraction and electrowinning (SX-EW) plant to produce grade-A copper cathodes. The copper-stripped solution generated in the SX plant (raffinate) will be conditioned with sulfuric acid and fresh water and then recycled to the heap leaching operation to irrigate more mineralized material.

Preliminary metallurgical characterisation testwork was completed on samples of mineralogical materials from the Antilla project in 2017. An extended testwork program was initiated at Aminpro Laboratories in March 2018 under the direction of Tetra Tech Mining and Minerals. Aminpro Laboratories are fully certified under both ISO 9001 and 1400. The testwork program comprises quantitative mineralogical analysis, sulphuric acid and ferric sulphate bottle roll predictor tests and column leach tests aimed at characterising the copper leaching characteristics of supergene mineralogical materials. Results from the predictor tests indicate secondary copper minerals are available for extraction with close to theoretical copper extractions being achieved. The column tests remain under leach and are estimated to be completed by September 2018. The results from the column leach program will be incorporated in subsequent technical studies. No test work has been conducted on the Cover, Cap and Primary Sulphide domains as these constitute only minor portions of the deposit.

Table 4 summarizes the expected recoveries of the four mineralized domains, with the Cover and Leach Cap performance assumed to follow the main domains based on similar copper mineralogy/speciation.

Capital and Operating Costs

The projected capital and operating costs for Antilla over a 1 ½ year construction period and 17 year operating mine life are summarized in the tables below.

Power will be supplied via a 10 km long power line connected to the existing national grid connecting the Las Bambas mine to the Cotaruse substation in the district of Chalhuanca.  This power line passes by the south part of Antilla property.

Grade-A copper cathodes produced by Antilla Project will be trucked by a contractor from the mine site to the port of Marcona, in Nazca province, along existing road networks.

Opportunities for Project Growth and Enhanced Economics

  • Tetra Tech recommends that further investigation of the Antilla deposit is warranted and necessary. There is potential to add new mineral resources at depth and in the Northeast and Southeast sides of the pit shell. Tetra Tech recommends that additional drilling be carried out to reduce the drill spacing in those zones with copper mineralization, where drill spacing is greater than 100 m.  Additional drilling will determine, with greater confidence, both the continuity and extents of copper mineralization within and outside of the known deposit.
  • Tetra Tech recommends an extension of the current exploration grid to include the West Block, North Block, Middle Block and Chabuca exploration targets.  Tetra Tech recommends continued geochemical sampling and geophysical surveys over these areas located next to the current mineral resources. 
  • Considering the preliminary metallurgical testwork undertaken on the project to date, there is potential to increase recoveries with additional metallurgical testing

Future Work

Further work leading to a Pre-Feasibility or Feasibiilty Study is recommended and will include drilling, mineral resource modeling, metallurgical testwork, engineering, and marketing studies, hydrological and geotechnical analysis, as well as various baseline environmental and archeological studies. In addition, exploration work will be recommended over the other targets in the vicinity of the known deposits.

Environment & Permitting

Existing environmental liabilities associated with the project are restricted to those expected to be associated with an exploration-stage project, and include drill sites and access roads. Additional Environmental Baseline studies should be conducted to collect site data including surface water quality, archeology, aquatic and terrestrial biology, flora, fauna, and additional geochemical characterization of mine waste materials.  This information will inform a comprehensive Environmental Impact Study.

Technical Reporting

The complete technical report documenting the PEA will be filed within 45 days of this news release and will be available on Panoro’s website and on SEDAR. The technical report will be authored by the following Qualified Persons

About Panoro

Panoro Minerals is a uniquely positioned Peru focused copper exploration and development company. The Company is advancing its flagship project, Cotabambas Copper-Gold-Silver Project and its Antilla Copper-Molybdenum Project, both located in the strategically important area of southern Peru. The Company is well financed to expand, enhance and advance its projects in the region where infrastructure such as railway, roads, ports, water supply, power generation and transmission are readily available and expanding quickly.  The region boasts the recent investment of over US$15 billion into the construction or expansion of four large open pit copper mines.

Since 2007, the Company has completed over 80,000 meters of exploration drilling at these two key projects leading to substantial increases in the mineral resource base for each, as summarized in the table below.

Preliminary Economic Assessments (PEA) have been completed for both the Cotabambas and Antilla Projects, the key results are summarized below.

The PEAs are considered preliminary in nature and include Inferred Mineral Resources that are considered too speculative to have the economic considerations applied that would enable classification as Mineral Reserves. There is no certainty that the conclusions within the updated PEA will be realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

Luis Vela, a Qualified Person under National Instrument 43-101, has reviewed and approved the scientific and technical information in this press release.

CAUTION REGARDING FORWARD LOOKING STATEMENTS:   Information and statements contained in this news release that are not historical facts are “forward-looking information” within the meaning of applicable Canadian securities legislation and involve risks and uncertainties.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation:

  • risks relating to metal price fluctuations;
  • risks relating to estimates of mineral resources, production, capital and operating costs, decommissioning or reclamation expenses, proving to be inaccurate;
  • the inherent operational risks associated with mining and mineral exploration, development, mine construction and operating activities, many of which are beyond Panoro’s control;
  • risks relating to Panoro’s ability to enforce Panoro’s legal rights under permits or licenses or risk that Panoro’s will become subject to litigation or arbitration that has an adverse outcome;
  • risks relating to Panoro’s projects being in Peru, including political, economic and regulatory instability;
  • risks relating to the uncertainty of applications to obtain, extend or renew licenses and permits;
  • risks relating to potential challenges to Panoro’s right to explore and/or develop its projects;
  • risks relating to mineral resource estimates being based on interpretations and assumptions which may result in less mineral production under actual circumstances;
  • risks relating to Panoro’s operations being subject to environmental and remediation requirements, which may increase the cost of doing business and restrict Panoro’s operations;
  • risks relating to being adversely affected by environmental, safety and regulatory risks, including increased regulatory burdens or delays and changes of law;
  • risks relating to inadequate insurance or inability to obtain insurance;
  • risks relating to the fact that Panoro’s properties are not yet in commercial production;
  • risks relating to fluctuations in foreign currency exchange rates, interest rates and tax rates; and
  • risks relating to Panoro’s ability to raise funding to continue its exploration, development and mining activities.

This list is not exhaustive of the factors that may affect the forward-looking information and statements contained in this news release.  Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward‑looking information.  The forward‑looking information contained in this news release is based on beliefs, expectations and opinions as of the date of this news release.  For the reasons set forth above, readers are cautioned not to place undue reliance on forward-looking information.  Panoro does not undertake to update any forward-looking information and statements included herein, except in accordance with applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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