Alloycorp Mining Inc. ("Alloycorp" or the "Company") is pleased to announce changes in its engineering and construction strategy to optimize development of the Avanti Kitsault Project ("Avanti Kitsault" or the "Project").
Alloycorp, through its wholly-owned subsidiary Avanti Kitsault Mine Ltd. ("AKML") will transition all engineering services from AMEC Americas Inc. ("AMEC") to DRA Taggart ("DRA"). Concurrent with the transition, DRA will conduct a Front End Engineering Design study ("FEED Study") aimed at confirming engineering and procurement work done to-date, further solidifying capital costs and strengthening overall project efficiencies and controls. Upon completion of the FEED Study, DRA will present proposed project execution alternatives to the Company, including engineering, procurement and construction, lump sum turnkey, build own operate and transfer, and variations of these models.
"DRA has an excellent reputation across all aspects of the project development lifecycle," said Peter Mah, Chief Operating Officer of Alloycorp and President of AKML. "We are pleased to partner with DRA as we together develop Avanti Kitsault."
Alloycorp is also pleased to announce site preparation at Avanti Kitsault is now complete, including preliminary earthworks and grading at plant site, construction of the Nass River Bridge, access to site and camp expansion. As contractor demobilization continues, overall site management will be transitioned to the AKML team. Implementation of environmental monitoring and protection programs, including water and waste management, will also continue to be managed by AKML. Until completion of the FEED Study, no further construction activities are expected to be undertaken.
Mr. Mah added "We are striving to be innovative in all aspects of our operations while controlling costs as a priority. An owner and operator model allows us to effectively manage costs as we continue to review longer-term construction management alternatives."
Alloycorp expects to update its National Instrument 43-101 compliant technical report incorporating recent results from an independent review of the Project undertaken based on advances in engineering and development. The updated technical report will be targeted for release in late-2015.
In the meantime, Alloycorp is focused on advancing towards full financing of the Project. To-date, credit approvals for US$225 million have been provided and conditional equity investment commitments for US$210 million have been received. Alloycorp continues to work with its syndicate of lenders towards final credit approval and to explore a range of equity financing alternatives to complete financing of the Project. The completion of the secured financing facilities and the equity investments are subject to conditions including ongoing due diligence, negotiation and execution of definitive documentation, negotiation of terms, regulatory approvals and other customary conditions.
About Avanti Kitsault
Avanti Kitsault is located in the Nass Valley area, approximately 140 km north of Prince Rupert, in British Columbia, Canada. Alloycorp holds a 100 percent interest in the Project through its wholly owned subsidiary, Avanti Kitsault Mine Ltd. Alloycorp is spending approximately $1 billion to develop Avanti Kitsault into one of the top four primary molybdenum mines in the world, expected to reach production in 2017.
Avanti Kitsault is fully permitted for construction, receiving its environmental assessment certificate from the Province of British Columbia in March of 2013, and an amended Mines Act permit on June 16, 2014. A Co-operation and Benefits Agreement was announced between Avanti Kitsault and the Nisga'a Lisims Government on June 3, 2014.
Molybdenum is a key alloying agent in the production of steel. Molybdenum is used to enhance strength, toughness, and wear and corrosion resistance to types of steels used in pipelines, storage tanks, bridges, aircraft engines and many, many other products. The versatility of molybdenum means that it plays a significant role in everyday life now and in the future.
Alloycorp is a TSX-Venture listed company headquartered in Toronto with an operations office in Vancouver. Alloycorp's strategy is to become the unique supplier of steel alloy metals. Cornerstone to this strategy is the development of Avanti Kitsault. Parallel to this, Alloycorp is seeking to grow through the acquisition of other assets with commodities that supply to the steel alloys industry.