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Metallum Delivers Positive Feasibility Study for Superior Project, Ontario

Sep 21, 2021


Metallum Resources Inc. announced the results of the Feasibility Study for the High-Grade Superior Zinc and Copper Polymetallic Project (“Project”) located near the town of Schreiber, east of Thunder Bay in Ontario. The Feasibility Study is based on the Bankable Feasibility Study prepared to JORC standards in 2019, with updated pricing to 2021 and incorporating the mineral resource estimate set out in an NI 43-101 Technical Report prepared by Massa GeoServices for Metallum in January 2021 (see news release January 26, 2021). The results of the Feasibility Study confirm a 8.5-year mine life, with an average CAD$44.5M annual EBITDA.
All dollar amounts are stated on a 100% project ownership basis.

Feasibility Study Highlights

•    Robust Economics: 8% Net Present Value (“NPV”) of CAD$131.3M and an after-tax Internal Rate of Return (“IRR”) of 23% based on a long-term price of US$2,700/t (US$1.22/lb) for Zinc, US$7,300/t (US$3.31/lb) for Copper, US$1,635/oz for Gold and US$21/oz for Silver.
•    Quick Payback on low initial Capital: CAD$145.1 million initial capital costs (including owner’s costs and Pre-production) and CAD$55.2 Sustaining Capital Costs and a 3-year payback period.
•    Low Operating costs, attractive AISC and operating margin: LOM average cash costs of CAD$952/t (CAD$0.43/lb) and all in sustaining costs (“AISC”) of CAD$1,223/t (CAD$0.55/lb) with 153% operating margin at CAD$1,805/t (CAD$0.82/lb).
•    Payable Metals: 290,076 tonnes of Zinc, 10,580 tonnes of Copper, 4,816 oz of Gold, and 679,950 oz of Silver over 2,202,631 tonnes of ore mined. 606,346 tonnes of Zn concentrate produced at 52% grade, and 44,232 tonnes of Copper with 26% concentrate.
•    First three years of production following commercial production: CAD$91.1 million of free cash flow, Payable Metal: 606,346 tonnes of Zinc Concentrate, and 44,232 tonnes of Copper concentrate with 4,816 oz of Gold and 679,950 oz of Silver shipped.
•    The Project is expected to generate direct corporate taxes and duties to the provincial and federal governments of CAD$94.2 million.

Kerem Usenmez, P.Eng., President and Chief Executive Officer, commented: “We are thrilled to have the Feasibility Study updated in NI 43-101 standards. The updated Feasibility Study confirms that Superior Zinc and Copper Polymetallic Project is a high margin substantial mining project that is expected to provide very robust return on investment. We expect the Zinc and Copper supply in particular to remain in deficit for the life of the mine, as green economy ramps up and more stimulus packages are introduced globally. We continue with our exploration program to tap into the unexplored targets of this world class project. We are excited about the opportunity to create jobs and economic stimulus to Canada, Ontario and the First Nations and local communities surrounding Schreiber.”

Simon Ridgway, Chairman of the Board, also commented: “It is very exciting for Metallum to confirm the low initial investment and short timeline for production for the Superior Project. Metallum is well positioned for Zinc and Copper demand, and we plan to move forward with detailed engineering and mine financings during the remainder of 2021.”
The Feasibility Study was prepared by DRA Global Limited, along with contributions from other prominent engineering companies.

Metallum is required to submit documentation to the relevant ministry for review and approval. Once the application is submitted the ministry assesses the application through a defined process that includes a technical review, public consultation and discharging the government’s duty to consult indigenous communities. The previous owner of the Project, Superior Lake Resources, commenced and Metallum is continuing the consultation with key indigenous stakeholders in the region of the Project.

Superior Zinc and Copper Polymetallic Project Feasibility Study
All Feasibility Study results are based on the Base Case assumptions except as noted for Spot Price Results.  Key results and assumptions used in the Feasibility Study are summarized in the tables within the September 15th News release on the Metallum Resources Inc. website. Please click on the link to review the release and Project Feasibilitiy Study.



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