An updated study for Clean Air Metals’ (TSXV: AIR; US-OTC: CLRMF) Thunder Bay North platinum–palladium project in northern Ontario significantly cuts initial costs by shifting to a toll-mill processing scenario while enhancing profitability.
The updated preliminary economic assessment (PEA), released Thursday, chops capital costs 76% to $89.5 million (US$64 million) and lifts the post-tax internal rate of return (IRR) by more than a quarter to 27% compared to the initial PEA in 2021. However, the update also lowers the post-tax net present value (at an 8% discount rate) by 40% to $175.7 million.
“The board is quite pleased with the results of the study,” chair Jim Gallagher said in a release. “The project features high-grade material very close to the surface with minimal infrastructure requirements, given its proximity to Thunder Bay. This results in a low-risk, quick-payback project.”
The update positions Thunder Bay North as one of very few platinum-palladium projects to reach the economic study stage in Canada, where Impala Platinum’s (JSE: IMP; US-OTC: IMPUY) Lac-des-Iles (LDI) complex is the sole producing mine. It’s also slated to close next year.
Clean Air’s Toronto-trading shares remained flat Thursday at 9.5¢ apiece, giving it a market capitalization of $23.8 million. Shares rose about 36% over the past 12 months.
A plan map showing Clean Air Metals’ Thunder Bay North platinum–palladium project in northern Ontario. Credit: Clean Air Metals
Efficient plan
The study envisions LDI as the target of the Thunder Bay mine’s toll milling plan.
Located 65 km north of the Thunder Bay North project and 105 km north of the namesake city, LDI could offer processing routes. Clean Air has also expressed interest in acquiring the LDI assets though there’s no assurance of any deal. That option, combined with modular on-site infrastructure, underpins the update’s low-capex approach.
The study raises the mine life by one year to 11 years and slightly lowers the payback period to 2.5 years. It would have an operating margin of 45% and could produce 2,500 tonnes per day.
The underground operation would have ramp access and ore would be trucked to the nearby plant.
The company highlights completed baseline studies to support permitting and says the project’s location near highways and grid power helps shrink both the footprint and schedule. Power is to be tied into the new 230-kV east-west line via about 6 km of new connection. Site access relies on a short upgrade of existing logging roads to Highway 527.
Resource model
The mine schedule is based on indicated resources only; there are no reserves at this stage. Clean Air says it is to advance engineering, permitting and processing options while arranging financing.
Thunder Bay North holds 14 million indicated tonnes grading 1.31 grams per tonne platinum, 1.37 grams palladium, 0.1 gram gold, 2.53 grams silver, 0.41% copper and 0.19% nickel for 589,700 oz. palladium metal, 619,700 oz. palladium, 44,300 oz. gold, 1.1 million oz. silver, 57,500 tonnes copper and 34,300 tonnes nickel.
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