Braveheart Resources Inc. [BHT-TSXV; RIINF-OTCQB] completed a positive preliminary economic assessment (PEA) for its newly acquired Thierry Mine Project near Pickle Lake, northwestern Ontario. The PEA was independently prepared by P&E Mining Consultants Inc. of Brampton, Ontario, under the supervision of Eugene J. Puritch, PEng, FEC, CET.
This PEA is focused solely on mining of the mineral resources at the Thierry underground mine and provides a solid base case for moving the project forward. The PEA indicates a 14-year mine plan based on a 4,000 tonne-per-day underground mining and processing operation. The mine plan assumes the potentially extractable tonnage of measured, indicated and inferred mineral resources is diluted by 20% and a 90% mine recovery factor is applied.
Measured and indicated mineral resources represent 8,131,000 tonnes at 1.46% copper, 0.18% nickel and 3.7 g/t silver. Inferred mineral resources represent 11,507,000 tonnes at 1.46% copper, 0.15% nickel and 6.1 g/t silver. Palladium, platinum and gold do not make material contributions to metal revenues.
Metal prices are based on long-term industry consensus with copper representing the primary contribution to revenues. US metal prices used in the PEA were $3.48/lb Cu, $8.00/lb Ni, $21.00/oz Ag, $1,250/oz palladium (Pd), $1,100/oz platinum (Pt) and $1,600/oz gold (Au). A United States dollar exchange rate of 0.75 is applied.
Life-of-mine (LOM) processing recovers 880,000 tonnes of copper concentrate at 30% Cu. In addition, 157,000 tonnes of nickel concentrate at 8 per cent Ni are recovered. This results in 567 million lb of payable Cu and 21 million lb of payable Ni. LOM revenues from net smelter returns are estimated at $2,579-million.
LOM operating costs are $1,063-million. Mining costs are estimated at $38.64/tonne, processing costs are $14.47/tonne, and general and administrative (G&A) costs are $5.30/tonne. C1 cash operating costs are $1.43/lb in copper-equivalent CuEq and all-in sustaining costs (AISC) are $1.98/lb in CuEq.
LOM capital costs are estimated at $710-million and include preproduction capital costs of $407-million. LOM cash flow in terms of earnings before interest, taxes, depreciation and amortization (EBITDA) is $1,516-million.
Pre-tax net present value (NPV) is estimated at $373-million using a 6% discount rate. Pretax internal rate of return (IRR) is 23%. Net cash flow of $1,516-million less taxes of $256-million and capital expenditures of $710-million results in an after-tax cash flow of $549-million. After-tax NPV using a % discount rate is estimated at $242-million. After-tax IRR is 19%.