THUNDER BAY, ON , Dec. 1, 2021 /CNW/ - Clean Air Metals Inc. (" Clean Air Metals " or the " Company ") (TSXV: AIR) (FRA: CKU) (OTCQB: CLRMF) is pleased to announce results from an independent Preliminary Economic Assessment (PEA) that was completed for its Thunder Bay North Platinum Group Element (PGE) - Copper (Cu) – Nickel (Ni) Project ("Thunder Bay North" or the "Project") near Thunder Bay, Ontario, Canada . The PEA was prepared by Nordmin Engineering Ltd. ("Nordmin") of Thunder Bay, Ontario , and includes a new stand-alone milling complex and waste storage facility (WSF) with mill feed from both the Current deposit and the Escape deposit, part of the Thunder Bay North Project Mineral Resource Estimate as amended, that was completed by Nordmin (see press release dated January 20, 2021 ). All amounts are in CAD dollars, unless otherwise stated. Summary results of the PEA are shown below in Table 1.

The PEA was independently prepared by Mr. Glen Kuntz , P.Geo., Mr. Kurt Boyko , P.Eng. and Mr. Brian Wissent , P.Eng. of Nordmin, Mr. Lyn Jones , P.Eng. of Blue Coast Research, Mr. Wilson Muir , P.Eng. of Knight Piésold Ltd., Mr. Kris Tuuttila P.Geo . (Limited) of DST Consulting, and Dr. Geoff Heggie , Exploration Manager of Clean Air Metals, who are considered "Qualified Persons" under National Instrument 43-101 Standards of Disclosure for Mineral Projects. The technical disclosure in this news release is based upon the information in the PEA prepared by or under the supervision of Mr. Kuntz, Mr. Boyko, Mr. Wissent, Mr. Jones, Mr. Muir, Mr. Tuuttila, and Dr. Heggie.

Project Metrics (Table 1)

• The Project has a pre-tax net present value (NPV) of $425.0 million , and after-tax NPV of $378.4 million , at a 5% discount rate.
• The pre-tax internal rate of return (IRR) is 31.1%, and the after-tax IRR is 29.8%.
• The capital payback is 2.4 years from start of production.
• Revenue's average $239.8 million per year from sale of PGE and Copper mineral concentrates.
• Total mined metal production over a 10-year mine life based on the present resource base is expected to be 629 k oz Platinum, 618 k oz Palladium, 111 M pounds Copper, 57 M pounds Nickel, 38 k oz Gold, 850 k oz Silver, or 2,886 k oz PtEq ¹ .
• 65.2% of total mineral production occurs in the first 5 years.
• Operating margin of 59% in the first 5 years and Life-of-Mine Operating margin of 53%.
• The Project is located in close proximity to key infrastructure near the City of Thunder Bay, Canada .
• Base case economics were calculated using a 2-yr trailing average price deck (Table 2)

PEA Key Metrics

Table 1: Key Financial and Project Metrics

The Company has not made a production decision at the Thunder Bay North Project and there is no guarantee that a production decision will be made or that the production rates at the Thunder Bay North Project will be achieved. There are no Mineral Reserves for the Thunder Bay North Project currently. The information reported in the PEA for the Project is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Inferred Mineral Resources are based on limited geological evidence and sampling. The tonnage and grade of Inferred Mineral Resources have significant uncertainty as to their existence and as to whether they can be mined economically. There is no certainty that results for the PEA for the Project will be finally realized.

Executive Remarks

Executive Chair Jim Gallagher , P.Eng. stated: "The initial PEA for the Thunder Bay North Project brings together two previously independent deposits into one mining plan which is relatively low risk, low capital, quick to production and generates robust financial metrics. Given the significant potential upside with continued exploration drilling along the known conduits and with the already identified massive sulphide targets we believe that this PEA is a minimum base case that Clean Air Metals will continue to attempt to de-risk towards prefeasibility."

CEO Abraham Drost , P.Geo., stated that "the PEA sets a mine plan that allows the Company to move forward with several de-risking objectives. These include:

1. converting mine plan-impacted unpatented mining claims to mining leases;
2. engaging with regulators toward early commencement of the mine permitting process;
3. continuation of the environmental impact studies (EIS) led by Englobe/DST Engineering;
4. commencement of prefeasibility technical studies including optimization and tradeoffs around mining, metallurgy and mill design; and
5. negotiation of Impact and Benefit agreements with affected First Nations and Métis."

Significant Production Potential

• The study considers a 1.3 Mtpa (million tonnes per year) 3,600 tpd mill throughput ramp-access underground mining operation with over a 10 year mine (project) life plus 2 years of construction. Early revenue is generated by mining near surface production areas and prioritizing high grade near surface material from the high head grades from the Lower Current and Bridge Zones grading 9.4 g/t PtEq insitu for first 4 years of production.
• Operating costs average $86.61 per tonne mined with an NSR of $178.02 per tonne over a 10-year life of mine (LOM).

Development Capital

• Initial capital expenditures (CAPEX) are $367.17 million (includes EPCM of $41 million and contingency of $60 million ) and ongoing capex for the life of the project is $169 million .

Table 2: 2-Year Trailing Price Deck

Clean Air Metals will be hosting a webcast on Thursday, December 2, 2021, at 11:00 am (Eastern Time) . Abraham Drost , Chief Executive Officer, and Jim Gallagher , Executive Chair will provide an in-depth review of the Company's PEA and will be available to answer shareholder questions. Copies of the news release and management's presentation will be available on the Company's website at www.cleanairmetals.ca .

Pre-registration will be open Wednesday, December 1, 2021 and the webcast can be accessed by clicking HERE or at the following URL:

https://onlinexperiences.com/Launch/QReg/ShowUUID=6A93091E-B89F-465F-AB82-AFB9FCBF4B19&LangLocaleID=1033&GroupID=Onyx

A Chrome or Firefox browser is recommended. Please test your connection prior to joining the webcast at https://onlinexperiences.com/Launch/StudioTest.htm

Mine Operations

The proposed Thunder Bay North operation involves underground mining at an average rate of 4450 tonnes per day (tpd) (3600 tpd in ore and 850 tpd in waste) with an accompanying process plant with a matching 3,600 tpd capacity. Shown in Figure 1 is the proposed site plan with the mineable Current and Escape deposits.

The Current deposit is accessed via a portal from surface and has a 12-month pre-production development period, which allows for the Current deposit main decline system to connect to the Current main fresh air raise and provide secondary egress for the mine. Contractor decline development is assumed for the 12-month pre-production period as well as the following 2 years.

The Escape deposit is accessed via a separate portal from surface. The main decline development begins 12 months after the Current deposit decline begins and continues for 3 years, until the decline connects with the Escape main fresh air raise. Contractor decline development is assumed for the Escape deposit.

The Current deposit pre-production development period is followed by a production ramp-up period and achieves full production (3,600 tpd) in the first quarter of year 1. The Current deposit production commences in the Current and Bridge mining zones and continues in these areas for the first 3 years. In year 4, the Escape deposit begins production in the High Grade Zone (HGZ) at 1,800 tpd and the Current deposit production rate is reduced to 1,800 tpd. Figures 2 and 3 show long sections of the proposed Current deposit and Escape deposit.

The underground production was scheduled based on 3,600 tpd mill feed and 850 tpd waste, excavated using a fleet of 10-tonne load-haul-dump loaders (LHD), and hauled with 40-tonne trucks, using the Current and Escape declines to haul material to surface.

The underground mining inventory was determined using Deswik's Mineable Shape Optimizer (MSO) software tool. The MSO uses the geological block model to generate shapes (e.g., stopes) based on economic and geometric parameters as listed in Table 3. The mining underground inventory is a combination of the four mining areas (Current, Bridge, Beaver-Cloud, and 437) within the Current deposit and the two mining areas (HGZ and Boundary) within the Escape deposit. The underground inventory spans along a strike length of 3.3 km and to a depth of 700 m within the Current deposit and spans along a strike length of 1 km and to a depth of 500 m within the Escape deposit. The underground stope inventory is constrained by a crown pillar, extending 30 m below the unconsolidated sediments below Current Lake.

The Current and Escape deposits will be mined via a combination of conventional underground long-hole open stope and drift & fill mining methods, backfilled with a combination of cemented paste back fill (CPB), cemented rock fill (CRF) and unconsolidated rock fill (URF). Stopes are designed to be accessed and excavated via overcut and undercut development cross-cut drifts, which connect to the main declines. The main declines provide ventilation, haulage to surface, and mine access. Table 3 shows the underground design parameters and Table 4 shows the underground MSO cutoff.

Table 3: Underground Design Parameters

Table 4: Underground MSO Cutoff

Mineralogy

Copper is contained primarily as chalcopyrite and approximately two-thirds of the nickel is in sulphide form, primarily as pentlandite. The remaining nickel is mostly hosted by magnesium-silicate minerals, chiefly serpentine and olivine. The platinum, palladium, and gold mineralization is very fine grained, however they are closely associated with all sulphide minerals, including pyrite and pyrrhotite, and recovery of the sulphides will therefore bring along the majority of the precious metal values. Gangue silicates consist of serpentine, amphibole, chlorite, mica and feldspar. Copper and nickel sulphide material liberation indicate a moderately fine grind is required for good recovery of the sulphides.

Metallurgical Test Work

A flotation development program was completed on one master composite and ten variability composites from the Current deposit and three variability composites from the Escape deposit. Flowsheet options considered include separate copper and nickel concentrates, separate copper and bulk concentrates, and a single bulk concentrate. A flowsheet was developed, consisting of primary grinding to a P ₈₀ (80% passing) of 65 microns, sequential flotation of copper bearing minerals, followed by nickel or bulk flotation. Regrinding of the copper rougher concentrate to a P ₈₀ of ~25 microns followed by two stages of cleaning achieved concentrate grades of ~25% copper. Nickel concentrate grades up to 11% nickel were achieved with fine regrinding to a P ₈₀ < 20 microns, but resulted in low nickel and PGE recoveries to a selective nickel concentrate. Replacing the nickel concentrate with a bulk concentrate eliminates the Ni regrind and improves overall metal recovery. Platinum, palladium and gold recovery is closely linked with sulphur recovery. High recoveries of the precious metals are possible if all the sulphides are floated, however the rejection of any of the sulphide minerals leads to an attendant drop in PGE and gold recovery. Table 5 shows the consolidated concentrate average milling recovery for each payable metal.

Table 5: Consolidated Average Milling Recovery