Hannukainen PEA Report Posted on SEDAR
(Thomson Reuters ONE) -
June 29, 2010 Northland Resources S.A. ("Northland" or "the Company") advises
that the Final Report on the Preliminary Economic Assessment (PEA) on the
Hannukainen Iron Oxide-Copper-Gold (IOCG) Project ("the Project") authored by
Watts, Griffis and McOuat Limited ("WGM"), Consulting Geologists and Engineers
of Toronto, Canada, has been posted on SEDAR (www.sedar.com). The separate
report which contains the supporting documentation developed by Hatch
Engineering (Hatch) has been posted on the Northland website (www.northland.eu).
At full production the Hannukainen Project is projected to produce 2M tonnes per
year of high quality pellet feed grade concentrate and variable amounts of
copper/gold concentrate.
WGM's report concludes that "For the most part, WGM believes that the PEA is a
conservative document for most areas in the conceptual design and costing of the
mine and concentrator."
WGM commented that, "The results show a viable project worthy of being taken
forward to feasibility. WGM believes that some of the key costs estimated in
the PEA and used in the analysis will change favourably due to the conservative
approach that has been taken in some areas. More favourable designs that will
result as more information becomes available and basic engineering is advanced
should favour the project economics."
In WGM's view, "The project mining schedule has been designed to mine the higher
grade copper-gold areas in the early years. This not only takes advantage of
the higher projected copper prices in the early years, but increases the project
Internal Rate of Return ("IRR") and reduces the payback period."
In finalising its analysis, WGM prepared an Excel spreadsheet to examine the
assumptions and conclusions in the PEA. The Model is based on the capital and
operating costs contained in the PEA, and various data supplied to WGM by
Northland. WGM has modified certain of the parameters, relative to the PEA
results released on May 12, 2010, based on its experience, review of the project
details and its professional opinions. In particular, WGM:
· Developed a price forecast based on their view of the market,
· Increased sustaining capital,
· Reduced operating costs,
· Added working capital and
· Calculated a pre-tax and post-tax Net Cash Flow.
A comparison of the key results of the Pre-tax WGM analysis to the PEA results
are summarized below (all amounts in USD except where noted).
+-----------------+----------------+--------------+------------+
| Element | WGM Analysis | PEA Analysis | Difference |
+-----------------+----------------+--------------+------------+
| Net Cash Flow | $988 M | $1,011 M | $23 M |
+-----------------+----------------+--------------+------------+
| IRR | 28.8% | 32.5% | 3.7% |
+-----------------+----------------+--------------+------------+
| Capex | $509 M | $474.5 M | $34.5 M |
+-----------------+----------------+--------------+------------+
| Opex | $1,318 M | $1,492 M | $174 M |
+-----------------+----------------+--------------+------------+
| Iron Ore Price | ¢114.2 /dmtu | ¢123.3 /dmtu | ¢8.1 /dmtu |
+-----------------+----------------+--------------+------------+
| Working Capital | Max $45 M | Not Included | |
+-----------------+----------------+--------------+------------+
In their report WGM noted that "Despite the more conservative analysis WGM
considers the differences to be immaterial for this level of study." Northland
agrees with this and views these differences as well within the +30% level of
accuracy of the study.
WGM also modeled a number of sensitivities including modeling the WGM capital
and operating assumptions against the price series used in the May 12, 2010 PEA
producing the following results:
· Net Cash Flow = $1,164 M
· IRR = 33.7%
The Preliminary Assessment is preliminary in nature and includes Inferred
mineral resources that are considered too speculative geologically to have the
economic considerations applied to them that would enable them to be categorized
as mineral reserves, and there is no certainty that the Preliminary Assessment
will be realized.
The Qualified Person responsible for the technical content of this press release
is Gordon Watts, P.Eng., Senior Associate Mineral Economist of WGM.
ON BEHALF OF THE BOARD
"Karl-Axel Waplan"
President & CEO
Northland Resources S.A.
For more information please contact:
Karl-Axel Waplan, President & CEO: +46 705 104 239
Anders Hvide, Executive Chairman: +47 92 88 98 58
Patrick Foster, Director Finance +44 77 101 236 03
Marguerite Manshreck-Head, Investor Relations, Canada: +1 647 224 7882
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
[HUG#1428113]
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.
All reproduction for further distribution is prohibited.
Source: Northland Resources S.A. via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 29.06.2010 - 12:49 Uhr
Sprache: Deutsch
News-ID 23169
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"Hannukainen PEA Report Posted on SEDAR"
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