Kria Resources Announces Improved Project Economics for Combined Halfmile Lake and Stratmat Deposits

Strategic Insights -

Kria Resources Ltd. has announced the results of its Preliminary Economic Assessment (PEA) study, which has improved the project's economics by combining the Halfmile Lake and Stratmat deposits. The study, completed by Wardrop Engineering Inc., a Tetra Tech company, has increased the Internal Rate of Return (IRR) and Net Present Value (NPV) of the combined Halfmile/Stratmat PEA by 28% and 82% respectively over the previous Halfmile PEA completed in July 2009.

Key Takeaways:

  • The combined Halfmile/Stratmat PEA has increased the IRR and NPV of the project by 28% and 82% respectively over the previous Halfmile PEA.
  • The estimated diluted mineral resources used in the Halfmile/Stratmat PEA are 13.6 million tons at 6.6% zinc equivalent (ZnEq).
  • The pre-production capital expenditure requirements for the combined project are CAD$187.0 million, with total projected capital expenditure required over the life of the mine estimated at CAD$471.1 million.
  • The PEA estimates a 2,000 tonnes per day underground mining operation utilizing 75% mechanized cut and fill (MCF) and 25% longhole methods at Halfmile Lake, and 20% MCF and 80% longhole at Stratmat.
  • The estimated life of the mine is over 20 years, with payback achieved in the sixth year of operation.
  • The metallurgical recoveries for the HML/Stratmat PEA are based on typical recoveries for a new mill process design, and recent test results indicate that the stated improved recoveries are attainable.

Statistics:

  • Estimated diluted mineral resources: 13.6 million tons
  • Zinc equivalent (ZnEq) grade: 6.6%
  • Pre-production capital expenditure requirements: CAD$187.0 million
  • Total projected capital expenditure required over the life of the mine: CAD$471.1 million
  • Internal Rate of Return (IRR): over 20%
  • Net Present Value (NPV): CAD$254 million (8% discount)
  • Life of mine: over 20 years
  • Payback period: sixth year of operation
  • Metallurgical recoveries: based on typical recoveries for a new mill process design

Sources:

  • Kria Resources Ltd., "Kria Resources Announces Improved Project Economics for Combined Halfmile Lake and Stratmat Deposits," Press Release, September 8, 2010
  • Wardrop Engineering Inc., "Preliminary Economic Assessment of the Halfmile Lake and Stratmat Deposits," Report, August 2010
  • Kria Resources Ltd., "Technical Reports of November 20, 2009 and November 30, 2009 for Halfmile Lake and Stratmat respectively," Reports, November 2009
  • Kria Resources Ltd., "2009 PEA for Halfmile Lake," Report, July 2009
  • SEDAR, Kria Resources Ltd., Profile, www.sedar.com