Century Iron Mines (TSX:FER), which is advancing the Joyce Lake direct shipping ore (DSO) project on the border of Quebec and Newfoundland/Labrador, announced on Friday it has filed a preliminary economic assessment on SEDAR.
The technical report is an update on the original PEA released in March. It shows a net present value of $90.4 million before taxes at an 8 percent discount rate, which is lower than the earlier estimate of $94. million. However, the new PEA has a higher internal rate of return, 37 percent compared to 35 percent, and payback period of 2.5 years compared to 2.9 years.
Century Iron explained the discrepancy was due to the yard rail operating cost included in the total operating cost but was not included in the cash flow projection. The company said in March that the mine is expected to produce a million tonnes per year for the first year and 2 Mtpy for the remaining years, with 35 percent of the product as lump and 65 percent as sinter fines.
Century Iron Mines was down 4.76 percent Friday on the Toronto main board.
The Joyce Lake property is part of the Attikamagen Project, a joint venture between Century, WISCO and Champion Iron Mines (TSX:CHM) Limited.
Securities Disclosure: I, Andrew Topf, hold no direct investment interest in any company mentioned in this article.