Bard" or the "Company")
wishes to announce that it has received a positive Preliminary Economic
Assessment ("PEA") on the Lone Pine property covering the
Molybdenum ("Mo"), Copper ("Cu") rich Alaskite
Zone (the "Property"). The Property is located approximately 15
kilometers north-northwest of Houston, British Columbia. The independent PEA
was prepared by P&E Mining Consultants Inc. ("P&E"), of
Brampton, Ontario., with EHA Engineering Ltd. ("EHA") providing the
metallurgical components. All currency amounts in this news release are in
Canadian dollars unless otherwise indicated.
Conclusions and Recommendations
P&E concludes that the Property has favourable economic potential as an open pit mine
producing Mo and Cu concentrates. The base case economic analysis
contemplates an average life-of-mine strip ratio of 5:1 (including the
pre-stripping), a 40,000 tonnes per day mill feed
rate and a 12 year mine life. Pre-production capital expenditures, including
contingencies, are estimated to be $435 million. The Property has an
estimated pre-tax net present value ("NPV") of $505 million (at a
5% discount rate) and an internal rate of return (the "IRR") of
12.4% using a base case Mo price of US$19.00 per pound and Cu price of
US$3.00 per pound. These prices correspond to the approximate three year
trailing average prices of these metals as of December 31, 2010.
The estimated average resource grades
including mine dilution and losses and the Life-of-Mine metal production from
the Property, are listed in the following table:
-----------------------------------------------------
Recovered Mo Recovered Cu
Mineral Resource ORE Mo Cu Pound Pound
Classification Tonnes % % (millions) (millions)
---------------------------------------------------------------------------
Measured & Indicated 146,365,000 0.069 0.034 189.3 65.2
---------------------------------------------------------------------------
Inferred 16,679,000 0.081 0.034 25.3 7.4
---------------------------------------------------------------------------
P&E notes that the PEA is
preliminary in nature and its mineable tonnage includes Inferred Resources
that are considered too speculative geologically to have economic
considerations applied to them that would enable them to be categorized as
mineral reserves. There is no certainty that the projections in a preliminary
assessment incorporating these resources will be realized. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.
The potentially mineable mineral resources in this press release were
estimated using the Canadian Institute of Mining, Metallurgy and Petroleum
(CIM), Standards on Mineral Resources and Reserves, Definitions and
Guidelines prepared by the CIM Standing Committee on Reserve Definitions.
P&E recommends that the Company
advance the project with additional exploration and delineation drilling, as
well as with studies in metallurgical, geotechnical and environmental
matters, with the intention to continue the project to the feasibility stage.
Economic Analysis
The economic analysis uses a simple
pre-tax cash flow model where undiscounted revenues during the 12 year mine
life are projected on an annual basis. The mine would produce a Mo
concentrate and a Cu concentrate. The currency exchange rate used was
$0.95USD/$1.00CDN.
Highlights:
-- Total Undiscounted Cash Flow of $1,234 million
-- With a 5% Discount Rate (base case): $505 million
-- With a 7% Discount Rate: $321 million
-- With a 10% Discount Rate: $112 million
-- Internal Rate of Return of 12.4%
-- Project payback period from start of production is 8.6 years
-- Maximum negative cumulative cashflow of $624 million occurs in the
fourth year of production
The following sensitivity table
demonstrates the positive effect on project economics if higher Molybdenum
prices are realized during the 12 year mine life:
Sensitivity of Project Economics to Mo Prices at Various Discount Rates
---------------------------------------------------------------------------
NPV (millions of $) @
--------------------------------------------
Mo US$ per Pound IRR 0% 5% 7% 10%
---------------------------------------------------------------------------
$19.00 12.4% 1,233 505 320 112
---------------------------------------------------------------------------
$20.00 14.4% 1,459 651 445 206
---------------------------------------------------------------------------
$22.50 19.1% 2,024 1,017 757 443
---------------------------------------------------------------------------
$25.00 23.6% 2,589 1,383 1,068 679
---------------------------------------------------------------------------
$27.50 27.8% 3,153 1,749 1,380 915
---------------------------------------------------------------------------
$30.00 32.0% 3,718 2,115 1,691 1,152
---------------------------------------------------------------------------
Development Plan
The mine has been planned as a
conventional open-pit mining operation producing 40,000 tonnes
per day of mill feed at full production. The plan anticipates mining 14.0
million tonnes of ore annually based on a 350 day
operating year. The stripping ratio for the first 7 years of operation
(excluding prestripping of some 10 million tonnes) is approximately 7.0:1 but reduces to an average
of 1.8:1 for the remaining 5 years of operations. Overall pit slopes have
been designed at approximately 50 degrees.
Drilling will be carried out by
electric, track mounted drill units. Operating bench heights of 15 metres have been assumed for the ore and waste mining
operations. Electric hydraulic shovels with 327 tonne
waste haul trucks and 222 tonne ore haul trucks are
contemplated for this operation, with annual total material movement of up to
114 million tonnes (325,000 tonnes
per day).
Mining operations will commence with an
initial mill feed grade of 0.035% Mo, which increases as the mine deepens. In
the last 7 years of the mine life, the average Mo grade will be approximately
0.091%. Cu grades will remain relatively constant throughout the mine life at
approximately 0.034%. The project is expected to produce 214 million pounds
of Mo and 72 million pounds of Cu over a 12 year mine life. Process
recoveries of 85% for Mo and 65% for Cu were utilized in the cash flow model
while the metal payables were 98.5% for Mo and 85% Cu.
The mine plan contemplates transporting
the resource by truck to a primary crushing and processing plant near the
open pit. The processing plant will utilize the conventional processes of
crushing, grinding and froth flotation to produce separate concentrates of Cu
and Mo. The plant tailings will be pumped to a tailings management facility.
Waste rock will be deposited in an adjacent rock storage facility.
Estimated mine closure and site
rehabilitation cost allowances have been included in the economic analysis.
During mine operation, health and safety and environmental protection costs,
including effluent treatment, have also been estimated.
Eugene Beukman,
President and Chief Executive Officer of the Company stated: "The PEA
ascribes an estimated pre-tax NPV to the Property of approximately $505
million, using a discount rate of 5%. The Molybdenum price used in this PEA
was US$19.00 per pound, which approximates the December 31, 2010 three year
trailing average price. We are very encouraged by these results and we still
believe we can improve the project economics through continued infill
drilling of Inferred Resources and in further exploration of the Quartz Breccia Zone and 61 Zone on the Property, which are in
close proximity to the area evaluated by the PEA. In addition, we are
strongly optimistic that the price of Molybdenum which will actually be
realized during the proposed mine life, will be significantly higher than
utilized in this PEA. This would result in a substantially higher NPV and the
IRR. Bard will continue to advance this strategic deposit which is well
located in terms of ideal infrastructure, secure land tenure in a politically
stable geographic location."
The Property has an ideal location for
operations with established infrastructure including:
-- Highway 16;
-- a natural gas pipeline;
-- a major hydro power transmission line and transformer sub-station; and
-- is located only 15 kilometers from the CN rail line in Houston, BC.
Bard is earning a 100% interest in the
Property under the terms of an option agreement (the "Agreement")
(see News Release dated September 15, 2006). All conditions have been met and
the Property remains in good standing with the vendors. The Company will earn
its 100% interest in terms of the Agreement. The Lone Pine exploration work
is being conducted under the supervision of Qualified Person, Rick Kemp, P.Geo.,
Vice-President-Exploration of Bard.
Qualified Persons and Report
The PEA technical report, titled
"Technical Report, Preliminary Economic Assessment, Lone Pine Project,
Houston, BC" will be prepared in compliance with National Instrument
43-101 and filed on SEDAR at www.sedar.com
within 45 days of this news release.
P&E Mining Consultants Inc. is an
internationally recognized, well established geological and mine engineering
consulting firm specializing in the areas of NI 43-101 geological reports,
resource estimates, preliminary economic analyses of mining projects and
preliminary feasibility studies. This PEA was completed under the direction
of Eugene Puritch, P.Eng., and Kirk Rodgers, P.Eng., of P&E who were responsible for mine design,
production scheduling and overall financial analysis.
Alfred Hayden, P.Eng., of EHA, was
responsible for metallurgical process capital and operating costs.
Each of the individuals named above is a
Qualified Person, as defined in National Instrument 43-101; is independent of
the Company; and is responsible for the technical disclosure contained in
this news release. Eugene Puritch, P.Eng.,
has reviewed and approved the contents of this press release.
On behalf of:
Bard Ventures Ltd.
Eugene Beukman,
President