Geodex Minerals completes an Updated Preliminary Economic Assessment Report on the Sisson Brook Tungsten-Molybdenum deposit

6th Mar 2009, 6:20 pm by Sam Kiri May be not as glamorous as gold, tungsten is finding its way to policy maker’s agenda. Proactive Investors has been an ardent supporter of tungsten and had the opportunity to sponsor “Talking Tungsten” at the producers and Developers Association of Canada (PDAC).  The event was followed by North American Tungsten (TSX: NTC) presenting in our own forum on March 4th together with Keegan Resources (TSX: KGN) and Commerce Resources (TSX: CCE).

Meanwhile, Geodex Minerals (TSX.V: GXM) has just completed an updated preliminary Economic Assessment report on the Sisson Brook Tungsten-Molybdenum deposit, New Brunswick. The updated Economic Assessment follows an impressive NPV and IRR answers in the preliminary assessment which led to the recommendation that work proceed to the next development stage. Infill drilling, geotechnical work and environmental/community studies took place in 2008 and have continued since then.

The revised calculations and analysis indicate that the project has an IRR of impressive 23%. The pre-tax NPV at an 8% discount rate is estimated to reach $US 372 million and $US 277 million at 10% discount rate. The analysis also indicates Sisson Brook’s payback to occur in Year 4. The project also indicates an estimated cumulative cash flow of $US 1.18 billion. Impressive numbers indeed!

Estimates above were at a crushing rate of 20,000tpd and a mine life of 20 years, with overall recoveries of 74% for tungsten and 70% for molybdenum. Tungsten is priced at an APT price of $US 220/mtu of WO3 in concentrate, with a blended $US 50/tonne reduction (gravity/flotation) for offsite costs. Molybdenum uses a long term price of $US 15/lb with an 8% assessment for offsite costs and roasting. Mine Operating Costs remain at C$ 1.30/tonne ($US 1.11), beneficiation costs are re-assessed at C$ 4.66/tonne ($US 3.96) with G &A costs at C$0.66/tonne ($US 0.56).

Preliminary ore-sorting testing and the subsequent preliminary process design indicate that a pre-concentration circuit would profoundly benefit operating and capital costs. These further indicate that the ore-sorting could concentrate 96.0% of the tungsten and 83.8% of the molybdenum in slightly more than half of the feed material, which increases grade to the mill and reduces capital and operating costs.

The report recommends that the company moves to completion of a Pre-Feasibility study by Q4 2009. With impressive project economics such as 23% IRR, just about four years pay back period and US$372 million NPV at 8%, Sisson Brook project is clearly worth further development. As tungsten fundamentals continue to strengthen with the Chinese tightening its grip on the supply side, companies such as Geodex that provide exposure to tungsten are bound to attract investors in time to come.

About Geodex
Geodex is a junior exploration company with its flagship project in Sisson Brook, a large, open-pittable tungsten-molybdenum-copper deposit located near Fredericton, NB. The company has received a positive Preliminary Economic Assessment or Scoping Study on Sisson Brook prepared by Wardrop Engineering Inc. and is presently working towards the completion of a pre-feasibility study in September, 2008. Geodex also owns the Mount Pleasant West, a large claim block located adjacent to the Mount Pleasant mine.