Each one in plain English, with the numbers worked through for a shareholder.
9 Apr 2014resource reserve update● NeutralMajor
Quest released a revised preliminary economic assessment (PEA) for Strange Lake, filing a technical report dated April 9, 2014; its press release calls the plan 'substantially-improved'. The visible excerpt is the cover and table of contents, so the new economics are not shown. The contents list a flotation step (concentrating the ore before processing) and a separation plant, which suggests a changed process design compared with the October 2013 pre-feasibility study (inference from the headings). The resource estimate behind it is still the August 31, 2012 one.
Quest filed the full technical report (dated December 6, 2013) for the Strange Lake pre-feasibility study announced on October 23, 2013; the study's effective date is October 23, 2013 and the resource estimate underlying it is still the August 31, 2012 one. The visible excerpt is only the cover and table of contents, so no new figures can be stated beyond those already announced; the contents list includes a risk register, a project development schedule and a budget for ongoing work, but their contents are cut off.
Quest released the Strange Lake pre-feasibility study, which it calls positive: initial capital of $2.565 billion, pre-tax IRR of 25.6% and post-tax 21.2%, post-tax NPV of $1.8 billion at a 10% discount rate, revenue averaging $1.047 billion a year over a 30-year mine life, and a 3.5-year payback (Canadian dollars). The study assumes a processing plant in southern Québec. The company says basic engineering is under way, a full pilot plant is planned for early 2014, and talks continue with potential off-take and strategic partners. The financing for the $2.57 billion build is not addressed in the excerpt, and the Strange Lake project is not yet funded or committed.
Quest announced it will release the results of its Strange Lake B-Zone pre-feasibility study before markets open on October 23, 2013, with an analyst call on October 24. The filing contains no study results itself. It is a scheduling notice for the long-running pre-feasibility study.
Quest filed the full technical report (dated December 14, 2012, effective August 31, 2012) behind the October 2012 Strange Lake B-Zone resource estimate, prepared by Micon International. The visible excerpt is the table of contents and introduction; it says the estimate builds on the May 2011 Wardrop report, and the figures are those already announced on October 31, 2012. The excerpt is cut off before the resource tables and the proposed 2013 budget, so no new numbers can be stated.
Quest reported a revised resource estimate for the Strange Lake B-Zone, prepared by Micon International with an effective date of August 31, 2012: 278.1 million tonnes Indicated at 0.93% TREO+Y plus 214.4 million tonnes Inferred at 0.85%. It says this is more than double the April 2011 estimate to a vertical depth of 150 m, and it hired Gunter Thase as Manager, Metals & Marketing to find off-take and strategic partners. This builds on the pre-feasibility study under way.
Quest said it has restarted field work at Strange Lake and Misery Lake in Québec: a 2,500 m exploration drilling program on four areas outside the B-Zone, a 1,000 m drilling program by AMEC for the pre-feasibility study, and 5,000 m of drilling at Misery Lake. Metallurgical testing is reported as on target for mini-pilot plant testing in Q4 2012, and the company cites working capital of $41.7 million.
Quest filed its annual report for the year ended October 31, 2011. It says the company advanced its Québec rare earth projects, mainly the Strange Lake B-Zone, without raising new money in the year, began trading on NYSE Amex, and is gathering data for a pre-feasibility study, with metallurgy work expected to finish in 2012.
