Northcliff Resources Aims for Sisson Tungsten Project Commissioning in 2016

Shares of Northcliff Resources surged after the company released a feasibility study for its Sisson tungsten project in New Brunswick, Canada, saying the results confirmed a technically and economically "robust" tungsten and molybdenum development that is ready for next steps.

The report, done by Samuel Engineering, projected an after-tax net present value of $418 million at an 8% discount rate, an internal rate of return of 16.3% and a payback period of four and a half years.

Initial capex was pegged at $579 million, using long term metal prices of US$350/mtu for ammonium paratungstate (APT) and US$15/lb for molybdenum.

"In just two years, Northcliff has advanced Sisson from an exploration and early-stage development project to achieve this important project milestone," said president and CEO, Chris Zahovskis.

"We have significantly de-risked the project and now have one of the largest tungsten reserves outside China.

"We are confident that Sisson is on track to earn the necessary environmental and construction permits from federal and provincial regulators in 2014, and Northcliff will be pursuing partnerships with global companies interested in the Sisson Project  or tungsten off-take agreements, positioning Northcliff to achieve the financing necessary to initiate project construction in 2014 and commissioning by 2016."

Located 100 km by road northwest of Fredericton, the Sisson property hosts a 334 million tonne proven and probable mineral reserve containing 22.2 million metric tonne units (mtu) of tungsten trioxide (WO3) and 154.8 million pounds of molybdenum (Mo).

The life-of-mine plan, based on this mineral reserve, has an average net smelter return value of $26.24/t and an average NSR value over the first five years of production of $30.75/t processed.

The project will be developed as a bulk tonnage operation and based on the mine plan, Sisson will produce a total of 15.0 million mtu of tungsten and 111.3 million pounds molybdenum over 27 years of operation. Average annual production in the first five years is forecast at 689,000 mtu tungsten and 4.4 million pounds molybdenum.

Average cash costs of production are forecast at $8.18 per tonne milled or $153/mtu, net of molybdenum credits.

The company said it will undertake the "value-added" processing of tungsten concentrates produced at Sisson by constructing and operating an ammonium paratungstate plant at the project site.

The project, which can be accessed by existing highways and roads, will see power provided by the provincial power utility via a new 138 kiloVolt transmission line alongside an existing 345 kV line at an expected cost of $0.066 per kilowatt-hour.

By advancing Sisson, Northcliff aims to become one of North America's major tungsten producers, increasing supply for the large North American, Asian and European markets where demand is forecast to  outstrip  supply.

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