Prophecy Announces Positive Preliminary Economic Assessment Study for the Gibellini Vanadium Project
Date:May 30, 2018
VANCOUVER, British Columbia–(BUSINESS WIRE)–May 29, 2018–Prophecy Development Corp. (“ Prophecy ” or the “ Company ”) ( TSX:PCY, OTCQX:PRPCF, Frankfurt:1P2N ) is pleased to announce results of a positive preliminary economic assessment study (the “ PEA ”) for its Gibellini vanadium project, designed to be an open pit, heap leach operation in Nevada’s Battle Mountain region, about 25 miles south of the town of Eureka. The PEA reported an after tax cumulative cash flow of $601.5 million, an internal rate of return of 50.8%, a net present value of $338.3 million at a 7% discount rate and a 1.72 years payback on investment from start-up assuming an average vanadium pentoxide price (V 2 O 5 ) of $12.73 per pound. As of May 29, 2018, the price of vanadium pentoxide is $14.20 per pound according to www.asianmetal.com. The PEA was prepared by Amec Foster Wheeler E&C Services Inc. (” AMEC “), part of the Wood Group of companies. All dollar values are expressed in US dollars unless otherwise noted.
The PEA Highlights:
*includes selling costs, royalties, operating cash cost, reclamation, exploration and sustaining capital costs.
**includes selling costs, royalties, operating cash costs, taxes (local, state, and federal), working capital, and sustaining & capital costs.
The PEA is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Sensitivity Analysis
The tables below show the sensitivity analysis to the vanadium pentoxide price, grade, and to the PEA capital cost and operating costs. This sensitivity analysis indicates strong project economics even in very challenging conditions, and that the project is well positioned to benefit from the current rising vanadium price environment. A 20% increase in the vanadium price relative to the base case translates to a $491.3 million after-tax NPV at a 7% discount rate.
Mineral Resources
The PEA was based on the Measured, Indicated and Inferred Mineral Resource estimates for the Gibellini deposit and the Inferred Mineral Resource estimate for the Louie Hill deposit.
Gibellini Deposit Mineral Resource Statement
