Temas Resources’ La Blance PEA pushes shares to 12-month high

An assessment for Vancouver-based Temas Resources’ (CSE: TMAS) La Blache titanium-vanadium-iron project in eastern Quebec boasts a $6.8-billion net present value that is more than six times higher than its estimated initial capital costs.

The preliminary economic assessment (PEA) released on Wednesday and underpinned by a fresh technical report, gives the post-tax net present value a discount rate of 8%, and puts capital costs at $1.2 billion and the internal rate of return at 55.1%. Its payback period is forecasted to be 25 months post-commercial production.

The initial 14-year mine plan is based on a new inferred resource of 208.5 million tonnes spread across semi-massive oxide and massive oxide mineralization grading 12.3% titanium oxide, 0.2% vanadium pentoxide, 41.5% iron oxide for 25.6 million tonnes, 400,000 million tonnes and 86.5 million tonnes of metal, respectively.

Temas president Tim Fernback says titanium prices have consistently surpassed management’s projected figure of US$2,200 per tonne, maintaining a price above US$3,000 per tonne since August 2022 for more than three years. This upward trend, driven by rising titanium demand, the depletion of primary global supplies, the absence of brownfield expansions, and the initiation of new projects in North America, is expected to persist.

The PEA also comes as titanium and vanadium, used in industrial metal alloys for their valuable strength-to-weight ratios, ride the momentum of their inclusion on the Canadian and United States’ critical mineral lists..

The report is grounded in the assumption of sustained market demand, with pricing forecasts at U$2,200 per tonne for titanium dioxide, US$14,200 per tonne for vanadium pentoxide, and US$125 per tonne for iron oxide. These assumptions lay the foundation for the project’s projected gross revenue of $37.2 billion and a net revenue of $31.8 billion, leading to an EBITDA (earnings before interest, taxes, depreciation, and amortization) of $23.1 billion.

Fernback also pointed to the project’s potential in leveraging exclusive, environmentally friendly extraction technology. Located in the Cote Nord region of Quebec, La Blache employs an eco-friendly extraction technique using a low-temperature chloride leach process for efficient metal recovery. Demonstrated in a 2022 pilot test, this method enhances sustainability by reducing environmental impact and boosting resource use.

Based on the PEA, the company has committed to advancing the project through the necessary regulatory and feasibility stages.

Temas plans to outline a future work program aimed at moving towards the pre-feasibility and feasibility study stages.

The company, which completed a nine-to-one share consolidation last June, saw its equity rise more than 20% on Wednesday to achieve a 12-month high at 47¢ apiece, having touched a low at 3¢ only 12 months ago. It last settled at 27¢ per share, giving it a market capitalization of $2.6 million.