TORONTO, April 21, 2022 (GLOBE NEWSWIRE) -- Fox River Resources Corporation (the “Company” or “Fox River”) (CSE: FOX) is pleased to announce the positive results of a Preliminary Economic Assessment (“PEA”) and updated Mineral Resource Estimate (“MRE”) for its 100%-owned Martison Phosphate Project (the “Project”), located near Hearst, Ontario. All currency figures are shown in United States dollars, unless otherwise noted.
Martison Phosphate Project - Robust Financial Metrics in a World-Class Jurisdiction
- At current prices, the PEA defines a pre-tax NPV 8 % of $3.53B and IRR of 26.8% with an after-tax payback period of 4.0 years and after-tax NPV 8 % of $2.51B and IRR of 23.1%.
- Base case economics outline a pre-tax NPV 8 % of $2.14B and IRR of 20.2% with an after-tax payback period of 5.2 years and after-tax NPV 8 % of $1.47B and IRR of 17.4%.
- Compelling economics at 30% below base case prices, delivering a pre-tax NPV 8 % of $457M and IRR of 10.9%.
- Life of Project Revenue of $20.55B and cash flow of $6.46B at base case pricing.
Table 1 – Pre-Tax NPV8% Sensitivity Analysis ( 1)
|
30% Below
Base Case |
Base Case |
Intermediate
Case |
Current Case |
30% Above
Current Case |
||||||
| MAP Price | $560 | $800 | $980 | $1,160 | $1508 | |||||
| SPA (68% P 2 O 5 ) Price | $742 | $1,060 | $1,220 | $1,380 | $1794 | |||||
| NPS Price | $567 | $810 | $990 | $1,170 | $1,521 | |||||
| Sulphur Price | $192 | $274 | $356 | $438 | $569 | |||||
| Ammonia Price | $421 | $602 | $1,115 | $1,627 | $2,115 | |||||
|
Pre-Tax NPV
8%
(USD$M) |
$ 457 | $ 2,144 | $ 2,836 | $ 3,528 | $ 5,630 | |||||
| ¹ Please see “Notes to Tables 1 to 3” below Table 3 for all assumptions. | ||||||||||
Table 2 – After-Tax NPV8% Sensitivity Analysis ( 1)
|
30% Below
Base Case |
Base Case | Intermediate Case | Current Case |
30% Above
Current Case |
|||||||
| MAP Price | $560 | $800 | $980 | $1,160 | $1508 | ||||||
| SPA (68% P 2 O 5 ) Price | $742 | $1,060 | $1,220 | $1,380 | $1794 | ||||||
| NPS Price | $567 | $810 | $990 | $1,170 | $1,521 | ||||||
| Sulphur Price | $192 | $274 | $356 | $438 | $569 | ||||||
| Ammonia Price | $421 | $602 | $1,115 | $1,627 | $2,115 | ||||||
|
After-Tax NPV
8%
(USD$M) |
$ 184 | $ 1,467 | $ 1,989 | $ 2,509 | $ 4,088 | ||||||
| ¹ Please see “Notes to Tables 1 to 3” below Table 3 for all assumptions. | |||||||||||
Table 3 – IRR, Payback, and LOP Cash Flow Sensitivity Analysis ( 1)
|
30% Below
Base Case |
Base Case | Intermediate Case | Current Case |
30% Above
Current Case |
|
| MAP Price | $560 | $800 | $980 | $1,160 | $1508 |
| SPA (68% P 2 O 5 ) Price | $742 | $1,060 | $1,220 | $1,380 | $1794 |
| NPS Price | $567 | $810 | $990 | $1,170 | $1,521 |
| Pre-Tax IRR | 10.9 % | 20.2 % | 23.6 % | 26.8 % | 36.2 % |
| After-Tax IRR | 9.3 % | 17.4 % | 20.3 % | 23.1 % | 30.9 % |
| After-Tax Payback (years) | 8.6 | 5.2 | 4.5 | 4.0 | 3.0 |
| Cumulative Cash Flow (USD$M) | $ 2,911 | $ 6,460 | $ 7,917 | $ 9,373 | $ 13,797 |
|
¹ Please see “Notes to Tables 1 to 3” below Table 3 for all assumptions.
|
|||||
Notes to Tables 1 to 3:
- All results developed at an exchange rate of 0.79365 USD/CAD for the CAPEX and OPEX calculations. Product prices are in US Dollars per metric tonne.
- The “Base Case” is a weighted average of three market forecast scenarios for the years 2022 to 2047.
- Current prices are based on values during the first half of April 2022 and are a weighted average of delivered prices to target markets in Canada and the United States.
- For further information see the notes to Table 4.
Project Description
The proposed Martison Phosphate Project is a vertically integrated mining and fertilizer complex utilizing an igneous phosphate deposit located approximately 70 km north of Hearst, Ontario, Canada. The PEA examined the types and quantities of fertilizers which will be produced, the process technology deployed, and the sulfur technology utilized in making fertilizer products from the phosphate concentrate.
The location of the Martison project is shown below in Figure 1.
Figure 1: Regional location of the Martison Project Sites
The Project design entails an open pit mine, a phosphate beneficiation plant (located at the mine site), a slurry pipeline, a road corridor, and a Fertilizer Conversion Complex (FCC) located west of Hearst, Ontario, and 86 km south of the mine site. The FCC location is in close proximity to existing rail, power, and natural gas infrastructure. This facility includes a phosphoric acid plant, a super phosphoric acid plant, a granulation plant, a sulfur conversion plant with co-generation capacity, a warehouse and loadout facility, and a railyard.
A map of the Martison Mine Site and Fertilizer Conversion Complex is provided below in Figure 2.
Figure 2: Location map of the Fertilizer Conversion Complex and the Martison Mine Site
Based on the current Indicated and Inferred resources, the Project has a 26-year mine life with the potential for extension should additional resources be identified. The PEA has examined the economics of producing 221,000 solution tonnes per year of super phosphoric acid (SPA), 474,000 tonnes of granular monoammonium phosphate (MAP) and 247,000 tonnes of granular nitrogen, phosphate + sulfur (NPS) at the proposed FCC. The target market includes the Eastern Canadian provinces, Canadian Prairie provinces and U.S. northern tier states. The Martison facility will capture a freight advantage relative to U.S. and offshore producers in its target market, and especially in nearby Canadian provinces where demand is projected to grow and where a larger share of Martison output is forecast to ship over time. The current total addressable markets (TAMs) for MAP, NPS and SPA are estimated to total about 4.0, 2.0 and 0.7 million tonnes, respectively. Canadian demand is forecast to continue to grow at moderate but lower rates than the extraordinary pace of the last ten years.
Management Commentary
Stephen Case, President and Chief Executive Officer of the Company commented, “We have witnessed substantial movement within the fertilizer sector over the past ten years and believe the time is right to advance Martison — an igneous phosphate deposit that already meets the most stringent cadmium restrictions being implemented by the European Union. The Western Canadian phosphate market demand has doubled in the past decade and remains the fastest growing market in North America — a market which the Martison project is designed to serve. With no current domestic production of finished phosphate products in Canada and a competitive operating cost, Martison is uniquely positioned to capture these markets that are primarily served by producers in Central Florida, Idaho and the Gulf Coast. In addition, given the increasing protectionism in the fertilizer sector over the past year, it is imperative that a domestic source of phosphate fertilizers be developed in Canada.
“The geological model suggests that the Martison deposit is not yet fully defined, specifically to the northwest and at depth of Anomaly A. The niobium in both the lateritic material and in the phosphate tailings also remains of economic interest and requires further work.
“As the world continues its current path of balkanization, the geopolitical risks globally are now starting to impact direct investment in regions where government regimes and taxation remain constant uncertainties. Operating in a global leading mining jurisdiction, such as Canada, may prove to be yet another distinct and positive advantage for the Martison project.”
Martison Project Preliminary Economic Assessment
The PEA, completed in accordance with National Instrument 43-101 (“NI 43-101”) with an effective date of April 21, 2022, was prepared by Hatch Ltd., JESA Technologies LLC, DMT Consulting Limited, Ausenco Inc., and Chemetics Inc. and a technical report relating to the PEA will be filed on SEDAR within 45 days of this news release.
Table 4 – Key Information Summary
| Description | Units | PEA | |
| Product Prices / Input Costs / FX | Base Case¹ | Current Prices 2 | |
| Product Prices | |||
| Mono Ammonium Phosphate (MAP) 3 | US$/t DEL | $800 | $1,160 |
| Super Phosphoric Acid 68% P 2 O 5 (SPA) 4 | US$/t DEL | $1,060 | $1,380 |
| Nitrogen, Phosphate, Sulfur (NPS) 5 | US$/t DEL | $810 | $1,170 |
| Input Costs | |||
| Sulfur 6 | US$/t DEL | $274 | $438 |
| Ammonia 7 | US$/t DEL | $602 | $1,627 |
| Currency Exchange Rate | USD/CAD | 0.79365 | 0.79365 |
| Production Data | |||
| Mine Site | |||
| Total Tonnes Mined, Life of Mine Plan | Mt/Dry | 409.48 | 409.48 |
| Beneficiation Mill Feed, Life of Mine Plan | Mt/Dry | 83.61 | 83.61 |
| Concentrate Grade | % P 2 O 5 | 37.28 | 37.28 |
| Mine Life | Years | 26 | 26 |
| Average Mill Feed (Years 3-25) | Mt/y | 3.35 | 3.35 |
| Phosphate Concentrate Production (Years 3-25) | Mt/y | 1.41 | 1.41 |
| Average Life of Mine (LOM) Mining Cost | US$/t conc. | $31.64 | $31.64 |
| Average LOM Beneficiation Cost | US$/t conc. | $15.25 | $15.25 |
| Average LOM Concentrate Cost (Including Infrastructure) | US$/t conc. | $55.10 | $55.10 |
| Average LOM Concentrate Cost (Including Slurry Pipeline Cost) | US$/t conc. | $56.24 | $56.24 |
| Fertilizer Conversion Complex (FCC) | |||
| Phosphoric Acid Plant Capacity | P 2 O 5 t per annum | 500,000 | 500,000 |
| P 2 O 5 Production Cash Costs | US$/t P 2 O 5 | $423.02 | $556.90 |
| SPA Plant Capacity | P 2 O 5 t per annum | 150,000 | 150,000 |
| SPA Production Cash Costs | US$/t SPA | $395.16 | $507.78 |
| Granulation Plant Capacity | P 2 O 5 t per annum | 346,000 | 346,000 |
| MAP Production Cash Costs | US$/t MAP | $319.10 | $522.97 |
| NPS Production Cash Costs | US$/t NPS | $321.34 | $536.91 |
| Sulphur Plant Capacity | |||
| Sulfuric Acid Produced & Consumed (Years 3-25) | H 2 SO 4 t per annum | 1,276,000 | 1,276,000 |
| Annual Co-Generation Production (Net) | MW | 31 | 31 |
| Average Annual Product Tonnes (Years 3-25) | |||
| MAP | t | 474,000 | 474,000 |
| NPS | t | 247,000 | 247,000 |
| SPA | t | 221,000 | 221,000 |
| Average Annual Consumption (Years 3-25) | |||
| Sulfur | t | 433,000 | 433,000 |
| Ammonia for MAP | t | 63,000 | 63,000 |
| Ammonia for NPS | t | 36,100 | 36,100 |
| Life-of-Project (LOP) Operating Costs | |||
| Average Annual Cash Operating Costs 8 | US$M/y | $307.13 | $475.08 |
| Average Annual OPEX + Sustaining CAPEX (SUSEX) | US$M/y | $328.61 | $496.55 |
| Capital Costs | |||
| Initial CAPEX 9 | US$M | $1,859 | $1,859 |
| LOP SUSEX | US$M | $545 | $545 |
| Financial Analysis | |||
| After-Tax NPV 8% | US$M | $1,467 | $2,509 |
| After Tax IRR | % | 17.4 | 23.1 |
| Payback Period | years | 5.2 | 4.0 |
1. The “Base Case” is a weighted average of three market forecast scenarios for the years 2022 to 2047.
2. Current prices are based on values during the first half of April 2022 and are a weighted average of delivered prices to target markets in Canada and the United States.
3. Reference prices ($CAD/tonne MAP delivered Western Canada) for Base & Current Cases are $1,060 and $1,470 respectively.
4. Reference prices ($US/tonne P
2
O
5
delivered Corn Belt) for Base & Current Cases are $1,570 and $2,020 respectively.
5. Reference prices ($CAD/tonne NPS delivered Western Canada) for Base & Current Cases are $1,065 and $1,480 respectively.
6. Reference prices ($US/long ton S CIF Tampa) for Base & Current Cases are $320 and $481 respectively.
7. Reference prices ($US/tonne NH
3
CIF Tampa) for Base & Current Cases are $630 and $1,625 respectively.
8. Total operating costs include administration, operations, maintenance costs at the Mine and FCC sites, plus SG&A costs.
9. Includes constructed costs, contractor's fee, contingency, and owner’s costs.
Table 5 – Total CAPEX
| Capital Costs |
<
×
|