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Twin Metals Minnesota Project Offers Extraordinary Economic Opportunity

Highlights of Prefeasibility Study Report Confirm Economic Strength of TMM Project

ST. PAUL, Minn., Aug. 20, 2014 – The Twin Metals Minnesota (TMM) Project, a proposed underground copper, nickel and platinum group metals (PGM) mine in Northeast Minnesota, offers the state an extraordinary opportunity for long-term economic growth and job creation, according to information contained in a National Instrument (NI) 43-101 Technical Report on the TMM Project Prefeasibility Study (PFS Technical Report). Duluth Metals Limited, the majority partner in the TMM joint venture, today released highlights from the PFS Technical Report in a public notice of the pending official filing of the report (http://bit.ly/VFkYG7). The PFS Technical Report was prepared at the request of Duluth Metals by a multi-company team led by AMEC E&C Services Inc.

“The PFS Technical Report validates the TMM Project to be one of the most compelling greenfield copper-nickel development projects in the world,” stated Kelly Osborne, CEO of TMM and President and CEO of Duluth Metals. “The foundations of the TMM project are its tremendous mineral resource, technically sound engineering and test work, strong operating margins, and location in a state that supports the mining industry and has ready-built mining infrastructure and an experienced workforce to support a large scale mining operation. We look forward to the next phase of the TMM Project and continued efforts to improve the value of the TMM Project.”

TMM Project

The TMM Project is located in the Iron Range region of Northeast Minnesota, within the Duluth Complex. With an estimated four billion tons of mineralized ore, the Duluth Complex is one of the largest untapped sources of copper, nickel and PGM resources in the world.

The PFS Technical Report is based on a 30-year underground mine plan focused on the development of the Maturi and Maturi SW mineral deposits, located approximately nine miles southeast of Ely, MN, and 11 miles northeast of Babbitt, MN, and containing an estimated 1.2 billion tons of measured and indicated mineral resources. The PFS Technical Report mine plan estimates an average production rate of 50,000 tons of ore per day, generating marketable copper and nickel concentrates.

The PFS Technical Report estimates the TMM Project has the potential to create approximately 850 full-time jobs when in operation, and will generate some 12 million labor hours during a roughly three-year construction period. Based on a mining employment multiplier calculated by the University of Minnesota-Duluth in 2012, the TMM Project would generate approximately 1,700-1,900 additional indirect jobs in the region’s economy.

The PFS Technical Report is also based on a TMM Project configuration consisting of four major facilities (see map below). The PFS Technical Report facility locations have been identified using sound environmental and economic principles, such as minimizing surface impacts, minimizing waste impacts, siting facilities near existing industrial areas, and minimizing overall environmental impacts.

  • Underground Mine Site: The Underground Mine Site is located at the Maturi and Maturi SW deposits. To support production and reduce surface impacts, a variety of fixed facilities will be constructed underground, including primary crushers, conveyors, pumping stations, and electrical substations. When in production, all waste rock generated from the underground mining activity will be used as underground backfill. Similarly, approximately 50 percent of the tailings produced by the concentrator will be returned to the underground mine as paste backfill.
  • Concentrator Site: Located approximately 2.5 miles west of the Underground Mine Site, and south of the Ely Airport, the Concentrator Site includes the concentrator plant, primary mine portal, temporary ore stockpiles, and a process water pond.
  • Tailings Storage Facility (TSF): The TSF is located approximately 11 miles south of the Concentrator Site, south of the city of Babbitt, and adjacent to the Peter Mitchell Mine. The TSF will store tailings not returned to the underground mine, and will also include a concentrate filtration plant, intermediate pond, electrical substation, and rail load-out facility.
  • Utility Corridors: Proposed Utility Corridors will connect the Mine Site with the Concentrator Site, and the Concentrator Site with the TSF. The Utility Corridors will serve multiple infrastructure needs including transport of concentrate and tailings, water pipelines, service and contact roads, and a rail extension to an existing railroad.

TMM Project PFS Technical Report Facility Configuration

PFS Technical Report Highlights

The AMEC PFS Technical Report confirms the TMM Project is supported by financial fundamentals showing a competitive cost position, high margins sustained over time, and capital efficiencies resulting from outstanding regional and local infrastructure. Highlights of the AMEC PFS Technical Report include:

  • An estimated 850 long-term mining jobs
  • Twelve million labor hours during a roughly three-year construction period
  • Ave. production rate = 50,000 tons of ore/day
  • 30-year “Life of Mine” (LOM) production = 527 million tons
  • Low C1 Copper cash cost (net of byproduct credits): first 10 years of production = $0.31/lb; 30-year LOM = $0.76
  • Initial capital investment = $2.77 billion
  • LOM capital investment = $5.41 billion
  • Revenue (first 10 years) = $12.11 billion; Earnings (first 10 years) = $6.19 billion
  • Net Present Value (NPV) @ 8% discount rate (pre-tax) = $1.36 billion.
    (NPV is a common measure of the projected value of an investment, stated in today’s dollars, based on an assumed discount rate.)
  • Estimated LOM metals production:
    • Copper = 5.8 billion lbs.
    • Nickel = 1.2 billion lbs.
    • Platinum = 1.5 million oz.
    • Palladium = 4.0 million oz.
    • Gold = 1.0 million oz.
    • Silver = 25.2 million oz.
  • Minnesota offers a world-class modern mining infrastructure, with accessible roads, rail lines, ports, power and water supplies, and a highly-experienced and skilled labor force.

“The PFS Technical Report confirms that the TMM Project offers an extraordinary long-term economic opportunity for the state of Minnesota, local communities and TMM Project stakeholders,” stated Duluth Metals Executive Chairman Chris Dundas. “The TMM Project enjoys many advantages including excellent infrastructure, a mining friendly jurisdiction and upsides for future expansion and potential down-stream processing.”

About Twin Metals Minnesota LLC
Twin Metals Minnesota, LLC, is a joint venture company, 60 percent owned by Duluth Metals Limited and 40 percent by Antofagasta. Twin Metals was formed in 2010 to pursue the development and operation of a copper, nickel and platinum group metals (strategic metals) underground mining project within the Duluth Complex in northeastern Minnesota. Twin Metals holds mineral and land assets of approximately 32,000 acres of leased, leased applications and permitted land.

For more information on Twin Metals Minnesota: www.twin-metals.com
For more information on Duluth Metals Limited: www.duluthmetals.com
For more information on Antofagasta PLC: www.antofagasta.co.uk

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