Criticalelementsawardsprimerogroupearlycontractorin Volvement Contracttoadvancedetailedengineeringanddeterminealu Mpsum Costestimatefortheroseprocessingplantandassociated Infrastructure
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OR FOR DISSEMINATION IN THE UNITED STATES
CRITICALELEMENTSAWARDSPRIMEROGROUPEARLYCONTRACTORIN VOLVEMENT
CONTRACTTOADVANCEDETAILEDENGINEERINGANDDETERMINEALU MPSUM
COSTESTIMATEFORTHEROSEPROCESSINGPLANTANDASSOCIATED
INFRASTRUCTURE
MARCH 27 TH , 2019 – MONTREAL , QUEBEC – Critical Elements Corporation (the “Corporation” or “Critical
Elements”) (TSX-V: CRE) (US OTCQX: CRECF) (FSE: F12 ) is pleased to announce an additional
significant step forward in becoming a significant lithium producer by awarding Primero Group (“Primer o”)
with the Early Contractor Involvement contract (the “ECI”) for the Rose Lithium-Tantalum project. Prim ero
Group is an industry leader in the assessment and development of global mineral processing projects.
“Primero is looking forward to working with the Crit ical Elements team on the development of the Rose
project in Northern Quebec. The award of this work demonstrates the growing capacity and capability of
Primero ‘s North American team and also confirms our reputation as a prominent leader in hard rock Lithium
projects ”, stated Cameron Henry, managing director of Primero Group.
“We are very excited to award the ECI contract to Pr imero, an industry leader in the engineering and
construction of spodumene processing plants as evid enced by their quality and efficient construction o f
Tawana Resources’ Bald Hill mine as well as their i nvolvement in projects successfully developed by
Pilbara Minerals, Galaxy Resources and Altura Minin g. With our recent announcement that the Impact
Assessment Statement for the Rose Lithium-Tantalum Project has been deemed complete by the Canadian
Environmental Assessment Agency and continued inter est in our strategic partner process, Critical
Elements is on track in its permitting and project development timelines ”, stated Jean-Sébastien Lavallée,
Chairman & CEO of Critical Elements.
A summary of the recommended ECI approach is included below:
ECI Phase I – Guaranteed Maximum Price (“GMP”):
o Review and assimilate all of the existing design and data
o Stress test and optimize the design through reviews , specific value engineering and
trade-off studies
o Reconfirm quantities and pricing
o Initiate selected engineering deliverables to achieve nominally 25% engineering definition
o Formulate a GMP for the process plant and associated process supporting infrastructure
o Submit a proposal and schedule to progress to the next phase
ECI Phase II – Front End Engineering Design (“FEED”):
o Progress and finalise a selected set of engineering deliverables to achieve nominally 40%
engineering definition
o Advance long lead and critical equipment packages to “Ready for Award” status
o Complete the contracting strategy and partnership for construction
o Optimise and reduce contingency applied to the GMP in order to formulate a Lump Sum
(the “LS”) cost estimate for the Engineering, Procu rement and Construction (the “EPC”) of
the process plant and associated process infrastructure
o Submit a complete and firm proposal with schedule t o Critical Elements for the EPC-LS contract
(the Corporation expects the lump sum cost estimated to be in line with the feasibility study ( Rose
Lithium-Tantalum project feasibility study, WSP, October 20, 2017)
Execution of the EPC-LS
Operation and maintenance support throughout scope of services
The following includes some of the many benefits to approaching project delivery in this manner:
ECI Phase I – GMP will allow Critical Elements furt her input into the final design, as well as
confirming adequacy of the design, efficiency and overall de-risking of the project
Critical Elements will be financially protected due to the final lump sum nature of the EPC-LS for
the process plant and associated process infrastructure
Primero will perform all construction activities associated with the process plant and infrastructure,
thereby reducing time spent negotiating with subcontractors
Reduction of interfaces, associated Extension of Ti me and variations resulting from multiple
subcontractors (eg. concrete, structural, mechanical, piping, electrical and instrumentation)
Reduction in subcontractor mark-ups
Smooth transition to the operations phase, should Primero be chosen to perform such services
Reduction in upfront capital associated with early value engineering and trade-offs within ECI
Phase I – GMP and ECI Phase II – FEED
Common safety systems across the site
Jean-Sebastien Lavallée (OGQ #773), geologist, shar eholder, Chairman & CEO of the Corporation and a
Qualified Person under NI 43-101, has reviewed and approved the technical content of this release.
About Critical Elements Corporation
The Corporation recently released a feasibility stu dy for Critical Elements’ wholly-owned Rose Lithiu m
Tantalum project (Rose Lithium-Tantalum project feasibility study, WSP, October 20, 2017), which is based
on price forecasts of US $750/tonne for chemical-grade lithium concentrate (5% Li 2O), US $1,500/tonne for
technical-grade lithium concentrate (6% Li 2O) and US $130/kg for Ta 2O5 in tantalite concentrate, and an
exchange rate of US $0.75/CA $. The internal rate o f return (“IRR”) for the Rose Lithium-Tantalum proj ect
is estimated at 34.9% after tax, and net present va lue (“NPV”) is estimated at CA $726 million at an 8 %
discount rate. The estimated payback period is 2.8 years. The pre-tax IRR for the Rose Lithium-Tantalu m
Project is estimated at 48.2% and the pre-tax NPV at CA $1,257 million at an 8% discount rate (see pre ss
release dated September 6, 2017). The financial ana lysis is based on the Indicated mineral resource. A n
Indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities,
shape and physical characteristics can be estimated with a level of confidence sufficient to allow the
appropriate application of technical and economic parameters, to support mine planning and evaluation of
the economic viability of the deposit. The life-of-mine (LOM) plan provides for the extraction of 26.8 million
tonnes of ore, 182.4 million tonnes of waste, and 1 1.0 million tonnes of overburden for a total of 220 .2
million tonnes of material. The average stripping ratio is 7.2 tonnes per tonne of ore. The nominal production
rate is estimated at 4,600 tonnes per day, with 350 operating days per year. The open pit mining schedule
allows for a 17-year mine life. The mine will produce a total of 26.8 million tonnes of ore grading an average
of 0.85% Li 2O and 133 ppm Ta 2O5, including dilution. The mill will process 1.61 mi llion tonnes of ore per
year to produce an annual average of 236,532 tonnes of technical and chemical-grade spodumene
concentrate and 429 tonnes of tantalite concentrate.
About Primero Group
Primero provides engineering design, construction a nd operational services to the minerals, energy and
infrastructure sectors. Primero has specialist expe rtise in project implementation and delivery with a
complementary service offering comprising civil, st ructural, mechanical and electrical solutions. Prim ero
provides these services to a diverse client base, ranging from mid-sized companies through to international
mining and energy houses.
FOR MORE INFORMATION:
Jean-Sébastien Lavallée, P.Geo.
Chief Executive Officer
819-354-5146
www.cecorp.ca
Investor Relations:
Paradox Public Relations
514-341-0408
Neither the 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.