Orbite Files a Positive Preliminary Economic Assessment Technical Report For Its First Planned Metallurgical Grade Alumina Plant
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwire) -- 01/13/12 -- Orbite Aluminae (TSX: ORT) ("Orbite") has filed the previously announced detailed Preliminary Economic Assessment (PEA) prepared by the engineering consultant firm GENIVAR Inc. and the filing of a NI 43-101 compliant report about the first plant of the aluminous project in Grande-Vallee. The information presented in this report are for a single plant whereas Orbite's strategy is to build up to 10 such plants to ultimately capture a significant portion of the Quebec alumina market and to support the global sale of alumina.
The document is filed on Sedar () and on Orbite's web site at . All amounts herein are in Canadian dollars and quantities are in metric tonnes unless otherwise noted.
On November 29, 2011, Orbite published the highlights of a positive PEA for a first Smelter Grade Alumina (SGA) plant, which confirmed the economics for its technology and strategy to become a low cost producer of alumina while minimizing environmental footprint. In the final PEA filed today, the two reference scenarios remain unchanged, resulting in a pre-tax NPV of $1.7 billion for the production of alumina and hematite only and a pre-tax NPV of $7.7 billion for the production of alumina, hematite, and all other valuable by-products. Recent market price variations for the Rare Elements contained in Orbite's deposit of aluminous clay were also taken into account through sensitivity analyses which are summarized below and detailed in the PEA.
"We are pleased to submit this Preliminary Economic Assessment and moving towards completing a Feasibility Study for the SGA Plant by midyear. This positive PEA is a key milestone achieved", said Richard Boudreault, President and CEO of Orbite. "Our strategic objectives remain to first launch the commercial production of High Purity Alumina this year (which the foreseen benefits are not taken into account in this PEA), to license our technology to industry producers in selected countries, and to move forward with the first of multiple projected plants for Smelter Grade Alumina".
"The uniqueness of Orbite's process is its capacity to refine alumina while, because of its hydrochloric acid closed loop system, enabling the extraction of other value added by- products such as high purity oxides, rare metals and rare earth elements oxides from a local Gaspesian source of clay," said Andre-Martin Bouchard, Eng., Vice President Environment at GENIVAR. "Nonetheless, the economics of producing and marketing only alumina and hematite, validate the robustness of the project".
Planned Smelter Grade Alumina (SGA) Initial Plant
Based on the PEA filed today, the annual production from the first of a series of SGA plants is estimated at 540,000 tonnes of alumina, 189,000 tonnes of pure hematite and 1.2 million tonnes of high-purity silica. This will be accomplished through the use of a patented and proprietary process incorporating an efficient and eco-friendly hydrochloric acid closed loop system that also enables the annual production of value-added by-products such as an estimated 28,000 tonnes of magnesium oxides, 104,000 tonnes of other value-added oxides, and a minimum of 975 tonnes of the following pure rare metals and rare earth elements oxides (all of which are classified as Inferred Resources), such as Gallium (Ga), Scandium (Sc), Cerium (Ce), Dysprosium (Dy), Erbium (Er), Europium (Eu), Gadolinium (Gd), Lanthanum (La), Neodymium (Nd), Praseodymium (Pr), Samarium (Sm), and Yttrium (Y).
Favourable Economic Scenarios for the first SGA facility
The two reference scenarios outlined, by GENIVAR in the PEA, were calculated using August 2011 market prices. The PEA also presents a detailed sensitivity analysis taking into account the impact on the economics assuming a 65% discount on Rare Earth Element prices, considering their significant price fluctuations over recent months. This 65% discount is equivalent to a 20% discount over and above the November Chinese domestic prices. Assuming these hypotheses and a projected 25 years of operations, the pre-tax NPV of the project would then range between $4.16 billion and $2.5 billion or the equivalent of $20.33 and $12.17 per share of Orbite on a fully diluted basis, when applying a discount rate of 5% and 10% respectively, and assuming an initial investment of $500 million. The project would generate an IRR of 65 % and the payback would be less than one and a half year, thus demonstrating a positive economic outcome.
In the PEA, Orbite's manufacturing costs for all products generated are estimated by GENIVAR to be $209.59/tonne of alumina (thus allocating all costs to alumina), or $201.02 per tonne of alumina, if only alumina and hematite are produced. The specific cost of producing alumina could be reduced to $91.26/tonne of alumina when apportioning the manufacturing cost, to all products sold, based on the energy they consume.
CRU International, an independent and well-recognized industry source of statistics on metal prices, recently forecasted that the site cost average for the alumina industry will be approximately US$265 to US$275 per tonne in 2012 and 2013 respectively, and expected to be much higher by 2022 (about US$320 to US$325 per tonne). Orbite therefore has a unique opportunity to enter the market with its SGA production having a forecasted competitive cost structure.
CRU also expects that the market for SGA will increase from about 80 million tonnes in 2010 to 120 million tonnes by 2016, growing at a Compounded Annual Growth Rate (CAGR) of 6.6%. They are also foreseeing increased demand for alumina production capacity of approximately 4.6 million tonnes per year extending until 2035, in order to maintain market balance.
Qualified persons
The PEA was prepared by leading independent industry consultants, all Qualified Persons (QP) under National Instrument 43-101. The QPs have reviewed and approved the content of this news release. The following consultants participated in the study:
About GENIVAR Inc.
GENIVAR is a leading Canadian consulting services firm providing private and public-sector clients with a full range of professional consulting services through all project phases, including planning, design, construction and maintenance. Ranging in size, its clients operate in various market segments, including the building, industrial and energy, municipal infrastructure, transportation and environmental sectors. GENIVAR is one of the largest engineering services companies in Canada by number of employees, with more than 5,000 managers, professionals, technicians, technologists and support staff in over 100 cities in Canada and internationally.
About Orbite
Orbite owns 100% of the mining rights on a Grande-Vallee property of approximately 6 441 hectares, the site of an aluminous clay deposit located 23 km south of Grande-Vallee, and a 2 600 m2 full scale pilot plant in Cap Chat, in the Gaspe region. An NI 43-101 report issued in August 2011 identified an Indicated Resource of about one billion tonnes of aluminous clay in part of the deposit containing a series of mineral elements. The Company also owns the intellectual property rights to a unique Canada- and U.S.-patented process for extracting alumina from various types of aluminous ores and for which patents are also pending in other countries.
The PEA is preliminary in nature and it includes Inferred Mineral Resources of aluminous clay as they relate to rare metals and earth rare elements that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the conclusions reached in the PEA will be realized. Mineral Resources that are not Mineral Reserves have not demonstrated economic viability.
Forward-looking statements
The PEA referred to herein constitutes a "preliminary economic assessment" within the meaning of Regulation 43-101 respecting standards of disclosure for mineral projects (Quebec) ("Regulation 43-101"). No preliminary feasibility study, pre-feasibility study, nor a feasibility study pursuant to the requirements of Regulation 43-101 have been completed to date.
Certain information contained in this document may include "forward-looking information", particularly regarding the daily production of the projected plant, the anticipated cost of the construction of such plant producing SGA and other resources including rare earths, the plans to build up to ten plants, plans to sell products globally. Without limiting the foregoing, the information and any forward-looking information may include statements regarding projects, costs, objectives and future returns of the Company or hypotheses underlying these items. In this document, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or the Company management's good-faith beliefs with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company's control. These risks uncertainties and assumptions include, but are not limited to, those described in the section of the Management's Discussion and Analysis (MD&A) entitled "Risk and Uncertainties" as filed on November 14, 2011 on SEDAR, and could cause actual events or results to differ materially from those projected in any forward-looking statements. The Company does not intend, nor does it undertake, any obligation to update or revise any forward-looking information or statements contained in this document to reflect subsequent information, events or circumstances or otherwise, except as required by applicable laws. As for projected dates of beginning of operations, namely the year 2013 for the SGA production plant projected to be put into service, this date is an objective and that many steps (feasibility study, financing, environmental and government authorizations and other important an usual conditions) remain before confirming any particular schedule. Notwithstanding the PEA, no independent study has confirmed the feasibility of putting the production plant described herein into service according to the projected dates and its projected financial and economic performance.
Readers are invited to consult the PEA prepared in conformity with NI 43-101 Technical Report entitled "Preliminary Economic Assessment on Orbite Aluminae Inc. Metallurgical Grade Alumina Project" dated January 12, 2012 and effective November 24, 2011 and the Annual Information Form of the Corporation, amended and restated and filed on August 25, 2011 and Management's Discussion and Analysis filed on November 14, 2011 which are available at or on the Corporation's website at .
Contacts:
MEDIA
Frederic Berard
Vice-President
HKDP Communications and Public Affairs
514-395-0375, Ext. 259
ORBITE
Jacques Bedard
Vice-President Finance and Chief Financial Officer
Orbite Aluminae Inc.
514-744-6264, Ext. 111
INVESTOR RELATIONS
Louis Morin
Investor Relations
514-591-3988
Jason Monaco
Managing Partner
First Canadian Capital Corp.
416-742-5600
Nicole Blanchard
Sun International Communications
Investor Relations
450-973-6600
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Datum: 13.01.2012 - 12:00 Uhr
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