| ||CROWFLIGHT MINERALS INC. (TSX Venture Exchange: CML) is pleased to provide an update on progress towards completing its Bankable Feasibility Study on the Bucko Deposit, Thompson Nickel Belt ("TNB"), Manitoba. Crowflight has an option to earn a 100% interest in the Bucko Resource Block by completing a Bankable Feasibility Study, arranging financing and bringing the deposit into production. The Bucko Resource Block is an area containing a NI 43-101 Indicated resource (refer to press release of October 13, 2004) of 1.2 million tonnes grading 2.71% nickel, a 0.45 million tonne Inferred resource, a vertical shaft down to the 1000 Level (305 metres below surface) and 800 metres of underground workings. A number of activities continue to advance the project to the feasibility stage (refer to table 1, Bucko Deposit Feasibility Schedule). Completion of the feasibility study remains scheduled for early in the second half of this year.|
The feasibility study is being directed and will be prepared by Micon International. Micon will also be involved in the economic evaluation and project scheduling. Additional engineering consulting firms, active in the study include:
Crowflight President and CEO, Tom Atkins commented on the work to date on the feasibility study stating: "We're nearing completion on a number of key components of the feasibility study, including the resource block model, metallurgical testing and mine planning. As is the nature of these studies, certain parameters studied in the feasibility work may differ from those presented in the scoping study, however to date project parameters are generally holding together. Furthermore, the work done to date has identified some encouraging areas of additional project development potential."
|P & E Mining Consultants, Brampton||-||Resource Modeling|
|Seacor Environmental Inc., Winnipeg||-||Environmental Studies and Permitting|
|AST Mining Canada, Sudbury||-||Mine Design|
|G & T Metallurgical Services Ltd., Kamloops||-||Metallurgical Testing|
|MetChem Canada Inc., Vancouver||-||Mill Design, Site Infrastructure|
|Golder Associates Ltd., Toronto||-||Geotechnical Studies, Tailings Design|
Crowflight Vice President Operations and COO Paul Keller added: "I am pleased to see the feasibility progress on a number of fronts and that no significant issues have arisen with regard to its quality or delivery. Although resources in the industry are tight, at this time we remain optimistic regarding our ability to complete the study prior to the end of the summer."
Review of Feasibility Activities
The Bucko Deposit
- Resource Block Model
Work continues on the block model defining the confidence, grade and tonnage of the Indicated and Inferred resources at various cut-off grades. This work is being performed under the guidance of independent geological consultant, Gene Puritch, P. Eng. of P & E Mining Consultants, resource modelling specialists.
From the work done to date the majority of the Indicated resource exists at or above the 1000 Level. Crowflight believes there is excellent potential to convert significant portions of the Inferred resources above the 1000 Level by detailed definition drilling to Indicated resources which could then contribute to the mineable reserve (refer to press release of May 3, 2005 to view the longitudinal section of the deposit). In addition, below the 1000 Level there are several drill holes that indicate the resource could persist to depths of 300 meters below the shaft. Crowflight intends to dewater the historical workings this summer to conduct resource definition drilling and to evaluate the continuity of mineralization below the 1000 Level where potential exists to double the current Indicated resource.
Upon completion of the block model Crowflight and mine design specialists AST Mining Canada will review the Indicated resource and factor in internal and external dilution together with data from the geotechnical study to determine appropriate cut-off grades for a mineable Indicated resource. Once completed, the model will be used for detailed mine design and mine scheduling. This work is scheduled for completion in early June, following which an announcement is expected.
For the purposes of a NI 43-101 review a study was completed in September, 2004, by GEOLOGICA Groupe-Conseil Inc. confirming an Indicated resource of 1.2 million tonnes grading 2.71% nickel and an Inferred resource of 0.45 million tonnes grade 2.23% nickel (refer to Crowflight Press Release dated October 13, 2004).
- Metallurgical Testing
A 350 kilogram composite sample of diamond drill core from 8 drill holes completed as part of the winter metallurgical and in-fill drill program (BK05 01 and 02A, N05-12A, 12B, 12C, 15A, 15B and 21A) were sent to G & T Metallurgical Services for metallurgical testing. Preliminary results are encouraging with respect to overall recovery and concentrate quality. Tests continue to determine the quality of the marketable concentrate product. Testing to determine nickel recoveries and quality of marketable concentrate are scheduled for completion in June.
- Geotechnical Studies and Mine Design
The collection of geotechnical data from drill core was completed in early April and is now being consolidated and analysed for evaluation of the crown pillar, stope and ground support designs. This work is being performed by Golder Associates and is scheduled for completion in June. As results from this work become available they will be incorporated into the mine design.
A cost-benefit analysis on the capital and operating costs of rehabilitating the historic shaft and underground workings versus driving a decline ramp was conducted earlier in the year. This study illustrated a more compelling economic case if the historic shaft and access drift on the 1000 level (300 metres below surface) were to be rehabilitated. AST Mining are engaged in the underground mine design, working in collaboration with Crowflight and engineers from Golder Associates regarding the geotechnical design. A detailed mine design with stope sequencing is expected to be completed in July.
Crowflight envisions dewatering the underground workings and rehabilitating the shaft and the 1000 level commencing early summer. An underground diamond drill program is planned to test the down dip extensions of the Indicated resource below the 1000 level. All permits are in place and a closure plan submitted for this work.
- Mine and Site Infrastructure
Feasibility level assessment is being conducted on mill design and installation, full electrical plans, headframe and hoist details and surface shop and office space. Included in the assessment is the sourcing of used major components to improve overall project economics. Discussions are underway with contractors for the shaft dewatering and shaft and underground rehabilitation stage of the project in preparation for the commencement of an autumn 2005 underground resource definition drilling program below the 1000 level.
- Mill and Tailings Design
A conceptual process design was completed in April and Crowflight began negotiations with third parties regarding indicative custom milling terms. Based on a preliminary cost-benefit analysis, the custom milling option appears to offer insignificant savings if the mine life were to exceed four years. As part of the feasibility study, Crowflight will continue with a detailed mill design. Negotiations will continue with potential parties regarding a short-term custom milling agreement as a possible means by which to reduce some of the initial up-front capital. Crowflight is investigating the purchase of various used pieces of equipment to reduce the cost associated with the mill. The detailed mill design is expected to be completed towards the end of the summer. Final permitting of the plant and one of at least two tailings storage facility locations will commence upon completion of the feasibility study.
- Off-take Agreement
Crowflight will commence negotiations for the off-take agreement with Falconbridge once the necessary inputs for negotiating such an agreement becomes available, including: completion of metallurgical testing, greater certainty exists regarding the milling option selected (to be determined by the feasibility study) and subsequent determination of concentrate grades and composition.
- Project Schedule
The project schedule will be finalized as major design components of the feasibility study are completed.
- Economic Evaluation
A financial model of the project economics will be refined as details regarding operating and capital costs become available. The scoping study completed by Micon (October 2004) illustrated the potential for robust pre-tax economic returns, assuming a US$4.50 per pound nickel price (nickel is currently selling at about US$7.30 per pound), with net present values of cash flow of US$34 million and an internal rate of return of 67% to US$50 million and an internal rate of return of 86% (refer to the press release dated October 28, 2004).
- Environmental and Socio-economic Studies
Permits are in-place regarding the initial dewatering, rehabilitation of the underground workings and test mining, with the only outstanding requirement being that Crowflight issue a specific work program and post an approximate $75,000 bond. With regard to the development of the Bucko Mine Project a Baseline Water Quality study is progressing and will include a Fish Habitat Study at Bucko Lake. Final operating environmental application will be submitted by year end 2005. The socio-economic study is expected to commence once the feasibility study is completed as part of a formal submission for full mine development permitting.
Micon International Limited performed a scoping study on the development of the Bucko Deposit (refer to the press release dated October 28, 2004). The study analysed the potential economics of mining a 1.2 million tonne indicated resource grading 2.7% nickel that would yield a recoverable diluted resource of 1.3 million tonnes grading 2.4% nickel that would be mined at the rate of 750 tonnes per day (tpd) to produce approximately 11 million pounds of nickel in concentrate per year plus minor amounts of by-product copper, platinum, palladium and cobalt in concentrate. An additional scenario was considered wherein approximately 0.5 million tonnes of inferred resources were added to the indicated resource to yield a recoverable diluted resource of 1.8 million tonnes grading 2.2% nickel to be mined at the rate of 1,000 tpd to produce up to 14 million pounds of nickel in concentrate per year. Both scenarios provided a robust pre-tax economic return assuming a US$4.50 per pound nickel price (nickel is currently selling at about US$7.30 per pound) of from US$34 million (under the 750 tpd scenario) and an internal rate of return (at a 15% discount rate) of 67% to US$50 million (under the 1,000 tpd scenario) and an internal rate of return (at a 15% discount rate) of 86% (refer to the press release dated October 28, 2004).
Crowflight is in the midst of studying the economic feasibility of developing the Bucko Deposit. The feasibility study is scheduled for completion in the second half of 2005. Subject to suitable metal prices, timely completion of permitting and the economics of the feasibility study, Crowflight envisions developing the Bucko Deposit for production of a nickel concentrate in early 2007.
Terms of Crowflight's Agreements with Falconbridge
Under its agreements with Falconbridge, Crowflight has an option to earn:
Crowflight - The Base Metal Builder
- A 100% interest in the Bucko Nickel Deposit (refer to Figure 1, Location Map) by completing a Bankable Feasibility Study, arranging financing and bringing the deposit into production. To be eligible to earn its interest in the Bucko Deposit, Crowflight must fund minimum exploration commitments in the 190 square kilometer Thompson Nickel Belt South ("TNB South") Project area of C$10.5 million prior to December 31, 2006. By spending the C$10.5 million Crowflight will at that time have earned a 25% interest in all TNB South Projects including the Bowden deposit. and have, subject to completion of the Bankable Feasibility Study and financing to production, the right to earn a 100% interest in the Bucko Deposit. To date C$4.25 million of the C$10.5 million required has been funded by Crowflight. In addition, Crowflight has the option to fund an additional C$7.0 million in exploration to December 31, 2008, Crowflight will at that time have earned a 50% interest in all of the TNB South Projects.
- A 50% interest in Falconbridge's share of approximately 250 square kilometres of exploration ground located adjacent to Inco Limited's Thompson and Birchtree nickel mines (refer to Figure 1 - Location Map, Thompson Nickel Belt Properties) near Thompson, Manitoba ("TNB North Project"). To earn this interest, Crowflight must fund C$5.0 million in exploration expenditures to December 31, 2008. To date C$1.0 million has been funded.
Crowflight Minerals Inc. is a Canadian junior mining exploration and development company listed on the TSX Venture Exchange. The company is focused on nickel, copper and Platinum Group Mineral ("PGM") projects in the Thompson Nickel Belt ("TNB") and Sudbury Basin. The company currently owns and/or has under option approximately 600 km2 of exploration and development properties in Manitoba and Ontario.
In Manitoba, these properties include: (1) the Bucko Nickel Deposit; (2) an earn-in option with Falconbridge Limited on five highly prospective properties (Bucko/Bowden, Resting Lake, Rock Island Lake, Halfway Lake and Gonlin Lake) on the TNB South Project located within 30 kilometres of the Bucko Deposit; and (3) six additional properties (Burntwood River, Birchtree South, Birchtree North, Airport, Moak Lake and Strong Lake) located 100 kilometres to the north on the TNB North Project.
In the Sudbury Basin, these properties include: (1) the 100% owned AER Kidd Project adjacent to Inco's Totten Deposit (10.1 million tonnes @ 1.5% Nickel, 2% Cu, 4.8 g/t PGM's); (2) the Airport Property (a 50/50 joint venture with Millstream Mines Ltd.) located 4 km south, and on-strike, with Falconbridge's Nickel Rim South Deposit (13.2 million tonnes @ 3.5% Cu, 1.7% nickel, 0.8 g/t Au, 4.1 g/t PGM's); (3) the optioned (100% earn-in) Mystery Offset Dyke Property; and (4) the 100% owned Peter's Roost Property.
Further information is available on the Company's web site at www.crowflight.com.
Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements". The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
For further information please contact:
President and CEO
Tel: (416) 861 - 5900
Fax: (416) 861 - 8165
Vice President Exploration
Tel: (514) 794 - 3633
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