ESG-focused company CoTec Holdings (TSXV:CTH,OTCQB:CTHCF) has released a preliminary economic assessment( PEA) for its Lac Jeannine iron tailings project in Québec, Canada.
“The PEA represents a first step in demonstrating CoTec’s strategy of recovering the great economic potential of large historical tailing sites with further potential enhancement of these projects through the deployment of CoTec technologies where applicable,” said CEO Julian Treger in the company's June 27 press release.
"The Labrador Trough hosts some of the largest historical resources of high-purity iron globally, creating an exceptional opportunity for Québec to become a global sustainable leader in the green steel supply chain,” he added.
The PEA outlines an initial inferred resource of 73 million metric tons (MT) at 6.7 percent total iron, which works out to 4.9 million MT of total contained iron. Additional adjacent tailings, subject to confirmation through further drilling and analysis, could potentially contribute between 50 and 70 million MT to the project’s resource base.
The pre-tax net present value for Lac Jeannine stands at US$93.6 million, while its internal rate of return is 38 percent, both at a 7 percent discount. After tax those numbers come to US$59.5 million and 30 percent, respectively.
According to CoTec, the upfront capital cost for the project is US$64.6 million, with the payback period estimated at 2.5 years. The US$64.6 million includes a 15 percent contingency margin and further study and engineering costs.
CoTec aims to produce a high-purity iron concentrate with minimal impurities, which it says is crucial for industries like steel manufacturing. This concentrate is projected to have a purity level of about 66.8 percent total iron.
The company notes that Lac Jeannine is considered an orphan site, with the Québec government carrying environmental liability. It believes the work outlined in its PEA will "significantly reduce" that liability.
CoTec now plans to advance the project by conducting a feasibility study. This next phase will focus on upgrading the inferred resource to indicated status, expanding resource tonnage and refining processing designs to target 67.5 percent total iron concentrate, potentially qualifying for critical minerals incentives at the provincial and federal levels.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
