First Phosphate Announces Positive Results of Preliminary Economic Assessment at Its Lac à L’Orignal Property in Quebec, Canada
Saguenay, Quebec – Newsfile Corp. – July 26, 2023 – First Phosphate Corp. (CSE: PHOS) (OTC Pink: FRSPF) (FSE: KD0) (“First Phosphate” or the “Company“) is pleased to announce the positive results of its Preliminary Economic Assessment (“PEA“) on the Lac à l’Orignal Property (the “Property” or the “Project“) located 84 km northeast of Saguenay, Quebec, Canada.
First Phosphate acquired and negotiated a 100% royalty free interest in the Property in 2022. The PEA provides a viable case for developing the Property by open pit mining for the primary production of a phosphate concentrate and secondary recovery of magnetite and ilmenite concentrates. First Phosphate is a mineral development company fully dedicated to extracting and purifying phosphate for use in the production of cathode active material for the Lithium Iron Phosphate (“LFP”) battery industry.
Highlights (all dollar amounts in Canadian dollars on a 100% project ownership basis unless otherwise indicated):
- The Project would produce annual average of 425,000 tonnes of beneficiated phosphate concentrate at over 40% P2O5 content, 280,000 tonnes of magnetite and 97,000 tonnes of ilmenite over a 14.2 year mine life.
- The Project generates a pre-tax internal rate or return (IRR) of 21.7% and a pre-tax net present value (NPV) of $795 Million at a 5% discount rate at June 30/23 approximate 18 month trailing average phosphate price and long term consensus magnetite and ilmenite prices.
- The Project generates an after-tax internal rate or return (IRR) of 17.2% and an after-tax net present value (NPV) of $511 million at a 5% discount rate at June 30/23 approximate 18-month trailing average phosphate price and long term consensus magnetite and ilmenite prices.
- The Project would generate an after-tax cash flow of $567 Million in years 1-5, resulting in a 4.9-year payback period from start of production.
- The Company has an MOU in place with Prayon Technologies of Belgium for up to 400,000 tonnes of annual phosphate concentrate offtake as well as a long-term purified phosphoric acid toll processing agreement.
- The Project benefits from nearby road access and electrical power line, year round accessible deep sea Port of Saguenay at 107 km by four season road.
- The PEA used Indicated and Inferred Mineral Resources in its calculations.
- The Project has no outstanding royalties or financing streams registered against it.
“We are very pleased with the results of this Preliminary Economic Assessment of our Lac à l’Orignal property and its timely completion. Our strategy to keep capex low and mine size controlled echoes these PEA results nicely,” says First Phosphate President, Peter Kent. “We’re now in a position to prudently evaluate next steps for the Company as we continue with our mission to apply a partnership-based approach to integrate vertically from mine to value-added production of purified phosphoric acid and LFP cathode active material for the North America LFP battery industry.”
PEA BASE CASE FINANCIAL SUMMARY (all dollar amounts in $Canadian unless otherwise noted, presented on a 100% ownership basis):
| Pre-Tax Net Present Value (5% discount rate) | $795 Million |
| After-Tax Net Present Value (5%) | $511 Million |
| Pre-Tax Internal Rate of Return | 21.7% |
| After-Tax Internal Rate of return | 17.2% |
| After-Tax Payback | 4.9 Years |
| Preproduction Capital | $550 Million |
| Sustaining Capital | $130 Million |
| Mine Life | 14.2 Years |
| Process Plant Throughput | 10,500 tpd |
| Concentrate Prices | |
| Phosphate (40% P2O5) | $367/t USD |
| Magnetite (69% Fe) | $95/t USD |
| Ilmenite (39% TiO2) | $250/t USD |
| Exchange Rate $CAD:$USD | $1.32 |
PEA TECHNICAL SUMMARY
| Mine Life | 14.2 years |
| Mine Plan Tonnage | 54.0 Million tonnes |
| Process Plant Feed Grade | |
| P2O5 | 4.91% |
| Fe2O3 | 22.62% |
| TiO2 | 4.14% |
| Strip Ratio (Waste:Process Plant Feed) | 1.7:1 |
| Operating Cost (per tonne of process plant feed) | $30.43 |
| Pit-Constrained Mineral Resource Estimate (1-4) at 2.5% P2O5 Cut-off | |||||||
| Class | Tonnes (M) | P2O5 (%) | Contained P2O5 (kt) | Fe2O3 (%) | Contained Fe2O3 (Mt) | TiO2 (%) | Contained TiO2 (Mt) |
| Indicated | 15.8 | 5.18 | 821 | 23.90 | 3.8 | 4.23 | 0.67 |
| Inferred | 33.2 | 5.06 | 1,682 | 22.55 | 7.5 | 4.16 | 1.38 |
Note: P2O5 = phosphorus pentoxide, Fe2O3 = iron oxide/ferric oxide, TiO2 = titanium dioxide.
- Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability.
- The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation socio-political, marketing, or other relevant issues.
- The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
- The Mineral Resources in this Technical Report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions (2014) and Best Practices Guidelines (2019) prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.
