NI 43-101 Independent Technical Report Mount ... - Adex Mining Inc.

NI 43-101 Independent Technical Report Rev 02 January 22 nd , 2010
Mount Pleasant North Zone Preliminary Assessment (Project 6526-03) 1-5
Three production options were compared in the preliminary assessment:
Case A:
Case B:
Case C:
Concentrator plant for production of tin concentrate and indium-bearing zinc
concentrate.
The concentrator plant of Case A plus a hydrometallurgical plant for production of
tin concentrate, indium sponge and zinc metal.
The concentrator/hydromet plant of Case B plus an add-on pyrometallurgical
plant for production of tin chloride, indium sponge and zinc metal.
1.6 Environmental
The study identifies the process technology and a conceptual management plan for tailings
treatment, wastewater treatment (including wastewater generated by hydrometallurgical or
pyrometallurgical operations) and tailings disposal. The overall plan for tailings management and
the proposed technology for wastewater treatment is based on compliance with Federal and
Provincial environmental guidelines. Bench scale and pilot testing of the tailings and wastewater
treatment process as defined herein is recommended as an integral part of the metallurgical test
programs to confirm compliance with environmental guidelines.
1.7 Economic Assessment
The preliminary assessment and economic analysis contained herein are preliminary in nature
and contain inferred mineral resources that are considered too speculative geologically to have
economic considerations applied to them that would enable them to be categorized as mineral
reserves and there is no certainty that the results of the preliminary assessment will be realized
with more detailed work. Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
The preliminary assessment of the project economics was based on a processing rate of 850
tonne/day run-of-mine ore and a 10 year project life. The pre-production capital cost for the
processing plant includes a blend of new and used processing equipment, and the accuracy is
considered to be within -10% to +35%. Revenue was based on 3-year trailing average metals
pricing up to August, 2009 and standard smelter terms for treatment charges. The economic
assessment for Case A assumes a pay factor of 15% of the contained indium value in the zinc
concentrate and further work is required to better define an indium pay factor based on smelter
contract negotiations.
A summary of the discounted cash flow assessment of the three processing options is presented
in Table 1-2. Case A, with the lowest capital investment for production of concentrates only,
provides a pre-tax internal rate of return (IRR) of 23.49%, while the added capital investment to
produce indium sponge and zinc metal in Case B improves the pre-tax IRR to 28.87%. For Case
C, a substantial increase in capital investment over Case B is required, only to yield a lower pretax
IRR. This, in combination with higher risk associated with marketing of tin chloride in
specialized markets, provides little incentive to further pursue Case C for production of tin
chloride.
Thibault & Associates Inc.
Applied Process Chemical Engineering