Corporate Overview
Continental Precious Minerals Inc. (TSX:CZQ) is a multi-mineral exploration company with multiple interests and exploration licences in Sweden. Since March 2005, Continental’s primary goal has been to advance its Swedish assets. To date, Continental’s exploration program has primarily focused on the Viken MMS licence, where it has defined a NI 43-101 compliant resource and completed a positive preliminary economic assessment (PEA). The PEA was completed by P&E Mining Consultants Inc.(“P&E”), with EHA Engineering Ltd. (“EHA”) having completed the metallurgical component of the study. P&E concludes that the Viken MMS project has economic potential as an open pit mine for uranium, vanadium and molybdenum. The base case contemplates an average life-of-mine waste to mineralized shale strip ratio of 0.5:1, a 40,000 tonnes per day mill feed rate and a 16 year mine life. The PEA concludes that the estimated undiscounted cash flow is US$4.618 billion after capital and operating costs. The net present value of such amount, using a discount rate of 6.5% (base case), is US$1.039 billion using base case metal prices of US$65.3/pound U3O8, US$15/pound vanadium and US$15/pound molybdenum. Only nine million indicated and 214 million inferred tonnes of the diluted and recovered potentially mineable portion of the Viken licence resource above an NSR cut off grade of US$60 per tonne were used in the base case. At an NSR cut off grade of US$7.50 per tonne, Viken MMS has an inferred resource estimate of 2.831 billion tonnes containing 1 billion pounds of uranium oxide (0.33 lbs/ton), 2 billion pounds of nickel (0.65 lbs/ton), 17 billion pounds of vanadium pentoxide (5.36 lbs/ton) and 1.5 billion pounds of molybdenum (0.49 lbs/ton). The resource estimate also includes an indicated resource of 24 million tonnes containing 10 million pounds of uranium oxide (0.38 lbs/ton), 17 million pounds of nickel (0.63 lbs/ton), 15 million pounds of molybdenum (0.56 lbs/ton) and 162 million pounds of vanadium pentoxide (6.25 lbs/ton).
This resource estimate is based on 133 holes for a total of 29,293 metres at the project.
The PEA is preliminary in nature and includes inferred 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 preliminary assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. See press release of September 13, 2010 for basis of PEA, qualifications and assumptions. The PEA technical report, which will be prepared in compliance with National Instrument 43-101, will be filed on SEDAR at www.sedar.com prior to October 28, 2010. The company’s mineral resources are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves in accordance with the requirements of National Instrument 43-101. The company’s mineral resource estimate for the MMS Viken licence and surrounding MMS licences as of December 31, 2008 is set out in the technical report dated March 19, 2009 authored by Gerald A. Harron, P.Eng. of G.A. Harron & Associates Inc., Fred Brown, CPG, Pr.Sci.Nat, of FHB Consulting Services Inc. and Eugene Puritch, P.Eng. of P&E Mining Consultants Inc., each an independent qualified person within the meaning of National Instrument 43-101.