Geomega Resources Inc. (“
Geomega” or the
“
Corporation”) (TSX.V: GMA) is pleased to announce
the capital expenditure (CAPEX) estimation results of the Front End
Engineering & Design (“FEED”) study. Two of the main objectives
of the FEED study were to complete an external CAPEX estimation and
review the process design work. The FEED study is intended to serve
as the foundation for launching the EPCM contract (Engineering,
Procurement, Construction and Management) to build the plant.
ISR Process Design & Throughput
CapacityThe original design of the demonstration plant
presented by Geomega (see press release April 3, 2019) was based on
an initial throughput capacity of 1 ton
per day, tpd (in 2,000 L batch
reactors) which would then require some additional investments to
reach 1.5 tpd. The process had originally been designed on a
24-hour operation. Due to economy of scale, the current design has
now been scaled up to use 5,000 L reactors and operate on a single
work shift of 8 to 10 hours. As a result of this sizing increase
and process optimization by Geomega, the demonstration plant could
reach a throughput capacity of 1.5 ton per shift, a 50% increase
over the initial design. On a per hour basis, this demonstrates a
4.5X increase.
The current study also confirms that the ISR
process that was developed by Innord, a private subsidiary of
Geomega, is technically feasible and uses off the shelf equipment
thereby making it easier to scale up.
CAPEX estimateThe increase of
the equipment sizing and the associated throughput capacity results
in a CAPEX increase relative to the original $2M - design presented
by Geomega. The externally validated CAPEX estimation for the
increased design capacity is $2.6M (-20%/+30%) including a
contingency of 20%.
Direct Costs |
$1,783,025 |
Indirect Costs |
$371,605 |
Contingency (20%) |
$432,926 |
TOTAL |
$2,587,556 |
As a result, Geomega believes the added
flexibility to the demonstration plant may help future scale up by
converting the plant into a 24 hours operation instead of having to
build a second larger plant. The summary of the original scenario,
the current updated scenario and the potential growth plant designs
are presented in the table below.
Scenario |
Daily Throughput (tpd) |
Annual Throughput (tpy) |
Operation Schedule (hrs) |
CAPEX |
CAPEX/TPY |
Original |
1 |
330 |
24 |
2M$ |
6,060 |
Current |
1.5 |
500 |
8 |
2.6M$ |
5,200 |
Growth |
4.5 |
1500 |
24 |
3.6M$* |
2,000 |
*assumes an up to $1M additional investment (not part of the FEED
study, internal assumption by Geomega) to accommodate the larger
volume |
The next step is to finalize all the ongoing
engineering activities in order to begin the EPCM process. The
current results will serve to (i) finalize the location selection
of the demonstration plant, (ii) complete project financing
initiatives with various levels of government and institutional
groups and (iii) begin a permitting process. A tentative location
has already been identified but the current results were needed to
validate the size requirements and the type of permitting for the
building. In addition, the Corporation has received term sheets for
a debt financing and CAPEX confirmations were the key missing
element to facilitate closing the financing. A more detailed
schedule, including production plans for 2020, is expected to be
provided with the launch of the EPCM.
The Corporation has begun accumulating a small
stockpile of feed material and will continue doing so during the
EPCM period. Other sources of magnet scrap have been identified
over the last several months and several initiatives are ongoing to
secure additional feed material.
“These results have exceeded our expectations
and we are looking forward to the next stage of the project. The
modified design, with larger throughput capacity, provides not only
an immediate reduction in the load of capital expenditures relative
to annual production but also opens the door to expansion in the
future without having to build a second plant in the coming years.
This is very important as we are starting to see significant growth
in both primary magnet waste and end-of-life material over the
coming years and as a result rare earth mining and exploration
companies are starting to invest in early stage magnet recycling
technologies. We are also seeing companies such as Apple starting
to use recycled rare earths in their newest models and the European
Union investing heavily in rare earths recycling through
universities. We believe Geomega to be strategically positioned to
be at the forefront of rare earths recycling with initial
production from the demonstration plant targeted for 2020. Finally,
the increased throughput capacity as well provides an opportunity
to process other feed materials besides rare earth magnets. The
Corporation continues to evaluate other feeds that could complement
the demonstration plant throughput and contribute favorably to the
Corporation’s cash flows in the future.” commented Kiril Mugerman,
President and CEO of Geomega and Innord.
About Geomega
(www.geomega.ca)Based in Montreal, Canada, Geomega
Resources has developed a proprietary, environmentally friendly
“ISR Technology” that recycles rare earth elements with focus on
the permanent magnet industry and produces four high demand, high
price, rare earth elements (HHREE – specifically Nd, Pr, Tb,
Dy).
The Corporation is targeting 2020 for initial
production from its demonstration plant to supply HHREE’s to North
America and other parts of the world.
Geomega also owns the Montviel rare earth
carbonatite deposit and holds over 16.8M shares, representing
approximately 20% of the issued and outstanding shares of Kintavar
Exploration Inc. (KTR.V), a mineral exploration company that is
advancing the Mitchi stratiform copper project in Quebec.
About Innord Inc.Innord is a
private subsidiary of Geomega of which Geomega owns 96.1%. The goal
of Innord is to develop and optimize the proprietary ISR Technology
for extraction and separation of rare earth elements. Innord
focuses on scaling up the technology through processing rare earth
enriched secondary sources (recycling of end of life and
manufacturing waste) and then to apply the technology to primary
mining feeds.
For further information, please
contact:
Kiril MugermanPresident and CEOGeomega450-641-5119
ext.5653kmugerman@geomega.ca |
Dave BurwellVice President The Howard Group Inc.Tel:
403-221-0915Toll Free: 1-888-221-0915dave@howardgroupinc.com |
Cautions Regarding Forward-Looking
Statements Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release contains statements that may
constitute “forward-looking information” or “forward-looking
statements” within the meaning of applicable Canadian securities
legislation. Forward-looking information and statements may
include, among others, statements regarding future plans, costs,
objectives or performance of the Corporation, or the assumptions
underlying any of the foregoing. In this news release, words such
as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”,
“anticipate”, “intend”, “plan”, “estimate” “target” and similar
words and the negative form thereof are used to identify
forward-looking statements. Forward-looking statements should not
be read as guarantees of future performance or results, and will
not necessarily be accurate indications of whether, or the times at
or by which, such future performance will be achieved. No assurance
can be given that any events anticipated by the forward-looking
information will transpire or occur, including as regards the
commercialization of any of the technology referred to above, or if
any of them do so, what benefits the Corporation will derive. There
can be no assurances that the Corporation will be able to secure
adequate financing for the demonstration plant or that, once built,
the plant will be able to produce HHREE in a sufficient quantity
and quality as to be commercially viable.
Forward-looking statements and information are based on information
available at the time and/or management's good-faith belief with
respect to future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond the Corporation’s control. These risks,
uncertainties and assumptions include, but are not limited to,
those described under “Risk Factors” in the Corporation’s annual
management’s discussion and analysis for the fiscal year ended May
31, 2019, which is available on SEDAR at www.sedar.com; they could
cause actual events or results to differ materially from those
projected in any forward-looking statements. The Corporation does
not intend, nor does the Corporation undertake any obligation, to
update or revise any forward-looking information or statements
contained in this news release to reflect subsequent information,
events or circumstances or otherwise, except if required by
applicable laws.
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