Cap-Ex Releases Positive Preliminary Economic Assessment

Cap-Ex Releases Positive Preliminary Economic Assessment 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/27/13 -- Cap-Ex
Iron Ore Ltd (TSX VENTURE:CEV) (FRANKFURT:X0V) (OTCQX:CPXVF)
("Cap-Ex" or the "Company") is pleased to announce that it has
received the results of the Preliminary Economic Assessment ("PEA")
on the Block 103 Property in western Labrador. The PEA was completed
by BBA Inc. ("BBA") located in Montreal, Quebec, and is effective as
of June 27, 2013. The complete NI 43-101 Technical Report will be
filed on SEDAR and the Cap-Ex website within 45 days of this news
release.  
Cap-Ex has a current Inferred iron ore resource of 7.8 billion tonnes
at 29% total iron ("TFe") and 18.4% magnetic iron ("magFe"). The PEA
was based on only the first thirty years of production, which will
require the processing of only 1.9 billion tonnes at 28.8% TFe and
18.6% magFe. The mineral resource estimate is based on a cut-off
grade ("COG") of 10% magFe. 
Highlights of the PEA Study include: 


 
--  Initial Capital disbursement of CAD$4.185 billion for the construction
    (leading to the start-up) of the first production line and required
    infrastructure and Total Capital costs of CAD$5.979 billion for the
    construction of the two production lines. This includes CAD$2.275
    billion for the Pellet Plant and excludes closure costs, sustaining
    capital and leased equipment and facilities. 
--  Commercial production for the first line commencing in 2018 and the
    second line commencing in 2019. 
--  Pellet production rate of 16.6 million tonnes per year of superior
    quality acid pellets from two production lines at a grade of 67.0% iron.
--  Pre-tax IRR of 19.3%. 
--  NPV (discounted at 8%) of CAD$7.383 billion. 
--  Payback period of 7.0 years. 
--  Total Operating Costs (excluding royalties) of CAD$62.87 per pellet
    tonne freight on board at Port of Sept-Iles (averaged over the first
    thirty years of production). 
--  Assumes use of existing railway infrastructure, hydropower availability
    from Nalcor and current Port of Sept-Iles expansion infrastructure for
    shiploading services.

 
"We are exceptionally pleased with the results of our PEA, especially
since we are basing it on only 25% of our currently defined mineral
resource estimate," says Graham Harris, CEO of Cap-Ex. "We are now
able to continue developing the Block 103 Property and further our
discussions with potential strategic partners." 
The PEA is preliminary in nature and includes Inferred mineral
resources that are considered too speculative geologically to have
economic considerations applied to them that would enable them to be
categorized as mineral reserves. There is no certainty that the
conclusions reached in the PEA will be realized. Mineral resources
that are not mineral reserves do not have demonstrated economic
viability. 
Financial Analysis 
Based on assumptions that commercial production would begin in Q1
2018 and would continue for 30 years, the following results were
obtained: 


 
------------------------------------------------------------------
                   Table 1 : Financial Analysis                   
------------------------------------------------------------------
IRR = 19.3%                      NPV (B$CAD)                      
                                   (Pre-tax)        Payback (yrs.)
----------------------                                            
Discount Rate                                                     
------------------------------------------------------------------
0%                                    32.807                   5.3
------------------------------------------------------------------
5%                                    12.754                   6.2
------------------------------------------------------------------
8%                                     7.383                   7.0
------------------------------------------------------------------
10%                                    5.067                   7.4
------------------------------------------------------------------

 
The capital disbursement required to bring the first line into
production is estimated at CAD$4.185. The total capital expenditure
(including contingency) for the two production lines is estimated at
CAD$5.979 billion. The capital costs estimate excludes closure costs
and sustaining capital, which are expected to be in the order of
CAD$80 million and CAD$818.4 million respectively over the first
thirty years of operation. 


 
--------------------------------------------------------------------
                Table 2: Capital Costs (CAD$ Million)               
--------------------------------------------------------------------
Mining (Capitalized Pre-Stripping)                              35.7
--------------------------------------------------------------------
Concentrator and Block 103 Site Infrastructure               3,613.8
--------------------------------------------------------------------
Pellet Plant                                                 2,274.9
--------------------------
------------------------------------------
Block 103 Site Rail Line                                        54.5
--------------------------------------------------------------------
TOTAL                                                          5,979
--------------------------------------------------------------------

 
Operating costs, including annual costs for leasing of equipment and
facilities (valued at 
CAD$424.9 million, including interest, over the
life of the leases), are estimated at CAD$62.87 per pellet tonne,
averaged over the first thirty years of operation.  


 
------------------------------------------------------------------
    Table 3: Estimated Average Operating Costs (First 30 yrs.)    
------------------------------------------------------------------
                                                 CAD$/Pellet Tonne
------------------------------------------------------------------
Mining                                                       11.59
------------------------------------------------------------------
Concentrator                                                 11.09
------------------------------------------------------------------
Pelletizing                                                  14.44
------------------------------------------------------------------
General Block 103 Site                                        0.56
------------------------------------------------------------------
General Administration                                        1.82
------------------------------------------------------------------
Environmental and Tailings Management                         2.00
------------------------------------------------------------------
Rail Transportation                                          16.68
------------------------------------------------------------------
Storage and Shiploading Services                              3.82
------------------------------------------------------------------
Railcar and Mining Equipment Leases                           0.87
------------------------------------------------------------------
------------------------------------------------------------------
TOTAL                                                        62.87
------------------------------------------------------------------

 
The PEA assumes an exchange rate of CAD$1 = US$1 and a constant
pellet selling price over the first thirty years of operation of
CAD$145 per tonne, based on Platts benchmark price for 62% Fe
concentrate of $110 per tonne. The financial analysis also includes
applicable royalties payable to 743584 Ontario Inc. and Adriana
Resources Inc.  
Metallurgical testing results indicate production of superior quality
iron pellets, produced with projected concentrate chemical analysis
of: 


 
----------------------------------------------------------------------------
   Fe  SiO2 Al2O3   MgO   CaO  Na2O   K2O    Ti     Mn      P     Cr       S
----------------------------------------------------------------------------
                                                                        less
                                                                        than
69.5% 3.36% 0.08% 0.10% 0.11% 0.07% 0.01% 0.02% 0.046% 0.006% 0.020% 0.015 %
----------------------------------------------------------------------------

 
Pellet analysis was projected at 67.0% Fe and 3.5% SiO2 . 
Project Summary 
The Block 103 Property is located in western Labrador and is
approximately 30 km northwest from the town of Schefferville, Quebec.
The Property consists of 14 contiguous map-staked licenses totalling
831 mineral claims of 20,775 ha. It is centred at approximately 54
degrees 58'N latitude and 67 degrees 14'W longitude. The proposed
project at the Block 103 site, as stated in the PEA, includes the
following components: 


 
--  The Block 103 ore deposit and waste disposal areas; 
--  Processing infrastructure including crushers, grinding and screening,
    magnetic concentration, pellet plant and tailings dewatering and
    pumping; 
--  The tailings management facility and water management installations; 
--  Ancillary infrastructure to support the mine and processing plant
    including mine equipment maintenance shop and wash bay, warehouse,
    offices, employee facilities, pumphouses, electrical substation,
    conveyors, load-out system, stockpiles, etc.; 
--  A 450-bed permanent camp; 
--  A rail loop, service track and railway connecting to a planned, new rail
    system (which in turn connects to the Tshiuetin Rail Transport system)
    that will be used by New Millennium. 

 
A preliminary site plan for the Block 103 Property, as prepared by
BBA, can be viewed at:
http://www.cap-ex.ca/images/maps/Block
103SitePlan.pdf  
The following assumptions were also made for the PEA: 


 
--  Rail transportation will be provided by Tshiuetin Rail Transport (TRT)
    railway in Schefferville, Quebec, Quebec North Shore and Labrador
    (QNS&L) railway and the Chemin de Fer Arnaud (CFA), using existing
    infrastructure and leading to the Port of Sept-Iles at Pointe-Noire,
    Quebec. 
--  Cap-Ex will not build any port terminal facilities, however, will pay a
    fee and share facilities to be built by others. 
--  Shiploading services will be provided by the Port of Sept-Iles using the
    common deepwater shiploading facility currently being built.

 
Technical Report 
An NI 43-101 Technical Report will be filed on SEDAR and on the
Cap-Ex website within 45 days of the date of this news release. The
report will present a summary of the Preliminary Economic Analysis.
The report is being prepared under the supervision of Mr. Angelo
Grandillo, P.Eng, of BBA, a Qualified Person as defined by NI 43-101,
with contributions from Watts, Griffis and McOuat Ltd. 
Qualified Person 
The PEA was prepared under the supervision of Mr. Angelo Grandillo,
P.Eng, with BBA. Mr. Grandillo is a Qualified Person as defined by NI
43-101 and independent of Cap-Ex. Mr. Grandillo has reviewed and
verified the technical information contained in this news release. 
Additional information about the Cap-Ex Block 103 Project can be
found in the technical report filed on SEDAR at www.sedar.com
entitled "Technical Report and Mineral Resource Estimate on the
Greenbush Zone, Block 103 Property, Newfoundland and Labrador for
Cap-Ex Iron Ore Ltd." dated March 21, 2013. 
About Cap-Ex Iron Ore Ltd. 
Cap-Ex Iron Ore Ltd. is a Canadian listed company, focused on the
development of its wholly owned Block 103 Iron Ore Project in the
Labrador Trough, near the mining town of Schefferville, Quebec. The
Block 103 property is strategically located close to an existing
railway that can provide a direct link to a shipping port and is
adjacent to Tata Steel-New Millenium Iron Corp. LabMag and KeMag
deposits and the Tata-New Millennium oxide deposits to the east. 
For additional information please visit the Company's website at
www.cap-ex.ca.  
CAP-EX IRON ORE LTD. 
On behalf of the Board 
Graham Harris, CEO and Director 
Cautionary Note Regarding Forward-looking Information  
This press release contains "forward-looking information" within the
meaning of applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to,
statements with respect to the development potential of the Company's
Block 103 iron ore property, future exploration plans, future
production, future operating and capital costs, the projected IRR,
NPV and payback period, details about infrastructure and the expected
timing for completion of a feasibility study. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will be taken", "occur" or "be achieved". Forward-looking
information is subject to known and unknown risks, uncertainties and
other factors that may cause the actual results, level of activity,
performance or achievements of the Company to be materially different
from those expressed or implied by such forward-looking information.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward-looking information. The
Company does not undertake to update any forward-looking information,
except in accordance with applicable securities laws. 
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS
THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Contacts:
Investor Relations:
604-669-2279
info@cap-ex.ca
www.cap-ex.ca
 
 
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