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MGX Minerals PEA values Driftwood Creek magnesium project at C$316.7M

MGX Minerals Inc.'s preliminary economic assessment at its Driftwood Creek magnesium project in British Columbia pegged a posttax net present value, discounted at 5%, of C$316.7 million, a 19.3% internal rate of return and a 4-year payback period.

The PEA envisioned the mine as a conventional quarry pit with a 1,200-tonne-per-day processing plant to produce a salable dead burn magnesium oxide product. The plant will be able to separately produce caustic-calcined magnesium oxide, or MgO, the company said March 6.

The initial capital costs are estimated at C$235.9 million, with total capital costs of C$239.8 million, including a C$40.0 million contingency.

During the 19-year mine life, average production is expected at 169,700 tonnes per year of MgO for a total of about 3.1 million tonnes of output.

The cash costs are estimated at C$350.0 per tonne of MgO, while all-in sustaining costs are pegged at C$351.30 per tonne of MgO.

The study is based on a measured and indicated resource of 7.8 million tonnes at 43.27% MgO and an inferred resource of 55,800 tonnes at 42.95% MgO.