Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) announced that Voyager Metals Inc (TSX-V:VONE, OTC:VDMRF) has filed a Preliminary Economic Assessment (PEA) for the Mont Sorcier iron and vanadium project in Quebec.
The royalty company said highlights included an after-tax net present value (NPV), using an 8% discount rate, of US$1.6 billion, an internal rate of return (IRR) of 43%, as well as annual average earnings before interest, taxes, depreciation and amortization (EBITDA) of US$348 million and average annual free cash flow of US$235 million over the life of mine (LOM).
“We are pleased with the results of the PEA that forecasts robust economics based on the Indicated Resources of Mont Sorcier's North Zone only,” Electric Royalties CEO Brendan Yurik said in a statement.
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“This leaves significant upside potential from the conversion of Inferred Resources in the future,” Yurik added.
Electric Royalties noted it holds a 1% gross metal royalty on vanadium production at Mont Sorcier, which is projected to have a 21-year operating mine life.
It added that if the anticipated project is placed in production as set out in the PEA, the company estimates that for the LOM, it could receive average annual royalty revenues of US$750,000 to US$1.5 million, based on the US$15 to US$30 per tonne vanadium credits forecast in the PEA.
As well, Electric Royalties said a feasibility study for Mont Sorcier is expected to be completed during the first quarter of 2023, which should lead to a formal development decision on the project.
Electric Royalties has a current portfolio of 19 royalties, including one royalty that is now generating revenue.
Contact Sean at sean@proactiveinvestors.com