Rogue Announces Optimized PEA: 75% Capex Reduction, Estimated Payback within One Year for Silicon Ridge Project
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May 23, 2017 TSX-V: RRS
Rogue Announces Optimized PEA: 75% Capex Reduction, Estimated
Payback within One Year for Silicon Ridge Project
Updated Resource: includes Measured & Indicated Resource of 7.7M tonnes grading 98.62% SiO2; Inferred
Mineral Resource estimated at 2.1 Mt grading 98.66% SiO2
Updated Mine Plan: incorporating less overburden and more detailed waste delineation
Updated Capex Plan: shifting to Direct-Ship (“DSO”) drops pre-production capital requirements to $3.5M
(including $806K contingency) and models an after-tax payback of less than one year1
Optimized PEA: indicates a base case pre-tax IRR of 157% and NPV (10% discount rate) of $33.8M
(after-tax NPV10% of $23.4M and IRR of 132%)2
Rogue continues to advance its Plan for Silicon Ridge; focused on finalizing permitting and completing ongoing
negotiations, including with potential material buyers and project financiers
Corporate Update Conference Call scheduled for Thursday May 25th, 2017
(1) All monetary values are stated in Canadian Dollars unless otherwise noted.
(2) The PEA is preliminary in nature and includes inferred mineral resources that a re 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 PEA results will be realized. Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
TORONTO, ON – Rogue Resources Inc. (TSX-V: RRS) (“Rogue” or the “Company”) is pleased to report the results of a n
optimized Preliminary Economic Assessment (“PEA”) on its 100% owned Silicon Ridge Project (the “Project”), located
approximately 42 km north of Baie -Saint Paul, Québec, and 4 km northeast of Sitec’s operating silica quarry. The PEA ,
prepared by SNC-Lavalin (“SNC”), integrates optimization work completed over the past six months and plans for direct -
shipping material from the contract operator’s crushing and screening. The updated PEA uses a new DSO pit
constrained Measured resource of 2.5 million tonnes (“Mt”) grading 98.62% SiO2, Indicated resource of 5.3 Mt grading
98.62% SiO 2 and an I nferred mineral resource of 2.1 Mt grading 98.6 6% SiO 2 and was initially modeled with a 20 -year
mine life and 200,000 tonnes mined per year. The technical report supporting the PEA (the “PEA Technical Report”) will
be filed on SEDAR within 45 days.
“This Optimized PEA calculates the excellent potential of the Silicon Ridge project as a near term, ultra -low capex
production asset,” said Sean Samson, President and CEO of Rogue. “Shifting to DSO is expected to create a compelling
return and with minimal dilution, the project has attractive potential economics. We are excited by these results and
continue to move forward, advancing the permittin g and importantly, working towards partnering with buyers. Rogue
continues to execute our Plan, methodically de-risking and moving towards a Development Decision”
Optimized PEA- Base Case Q3 2016 PEA
(for comparison)
Pre-production Capital $3.5M $13.1M
Pre-Tax After-Tax After-Tax
Net Present Value10% $33.8M $23.4M $23.8M
Internal Rate of Return 157% 132% 33.9%
Payback (After-Tax) <1 year 3.1 years
44 Victoria Street, Suite 1612
Toronto, ON M5C 1Y2 CANADA
Toll Free: 1-888-764-1981,
Direct: +1-647-243-6581
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Production Highlights
Total Resource Mined, from South West and North East Zones 4,000,000 Tonnes
Mining Rate 200,000 tonnes / year
Modeled Operating Life 20 Years
Total Saleable Product (across all end use products) 3,420,000 tonnes sold
Average Stripping Ratio 2.0:1
Economic Model Highlights
Pre-production Capital Costs Including Directs, Indirects and Contingency $3.5M
Total Life of Mine Revenue $171M
Blended Average Revenue of Quartzite Sold (“Commodity” only- see below) $50 / tonne sold
Total Operating Costs Over Life of Mine $89M
Average Total Operating Cost (mining + processing + owners cost + royalty) $26.02 / tonne sold
Operating Profit $82M
Free Cash Flow (Pre-Tax) $78.3M
Free Cash Flow (After-Tax) $51.8M
Resource Summary
The mineral resource estimate, upon which the PEA is based, includes a pit constrained measured resource of 2.5 Mt
grading 98.6 2% SiO 2, indicated resource of 5.3 Mt grading 98.6 2% SiO 2 and an inferred resource of 2.1 Mt grading
98.66% SiO2. The resource estimate includes resources from three zones referred to as the South West , Centre North
and North East zones. A significant portion of the estimate is derived from the South West Zone. All zones are open
along strike and down dip and have potential for expansion.
Highlights of the Optimization
Between the Q3 2016 PEA and this updated PEA, Rogue has refined the in -pit resource, including improved definition of
the internal waste zones, reduction of the overburden cover on the South West Zone and reduced capital expenditure
requirement by over 70% reflecting the transition from full processing on site, to focusing on a DSO model.
Reduction of the overburden covering the South West pit that was inferred by the ground penetrating radar survey and
verified by the identification of quartzite outcrops resulted in the removal of 222 m3 of overburden from the estimate
on the South West Zo ne (see press release dated January 5, 2017). This reduction represents a potential savings of
approximately $1.3 million over the life of the project.
The shift to a DSO model, resulted in the elimination of the onsite processing facility and power line and reduced the
estimated CAPEX costs from $13.1 million to $3.5 million. This represents a reduced amount of pre-development work
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required and simplifies the process for generating salable products. It should be noted that if customers are developed
for higher value materials that off-site processing options will be considered by the Company as markets are developed.
End use markets- Commodity and Specialized
In its analysis, released on April 25 and July 13, 2016, Dorfner ANZAPLAN identified a number of potential end uses for
the product from the Silicon Ridge deposit (see summary of the April 2016 metallurgical report, available on
www.rogueresources.com). Rogue has targeted two broad groups of markets: “Commodity” and “Specialized”.
The Commodity group will be direct-shipped from Silicon Ridge as lump product, after selective quarrying (led by the on-
site Rogue team), primary crushing and screening by the Contract Operator of the quarry to a size as required to meet
the specification for ferrosilicon and metallurgical grade silicon producers (averages between 20mm to 120mm) .
Samples of this material prepared by Dorfner ANZAPLAN, after a primary crush and screen, has already been tested by
both ferrosilicon and silicon metal producers.
The Specialized group will require secondary processing ( now not included as part of the direct -ship model planned for
Silicon Ridge) , which the Company will look to arrange offsite with a partner. This material will target : quartz
countertops, specialty glasses, specialty coatings, engineered stone, silicon carbide, fused silica and sodium/ potassium
silicate.
It is anticipated that the Commodity group will be higher volume and lower priced than the Specialized group, which will
represent less volume but garners a higher price for the material. This PEA draws on pricing for only the Commodity
group, using a volume mix and target prices for both ferrosilicon and metallurgical grade silicon producers. Sales into
the Specialized markets would represent upside to the Base Case and sales of material currently counted as waste.
The Company is in discussions with end use buyers from across both the Commodity and Specialized groups, partner
processors with whom Rogue could further process the material with a secondary crush and screen of its material and
distributors with relationships across various Specialized markets.
Economic Model Sensitivities (after-tax)
NPV10% IRR
Base Case $23.4M 132%
Key Driver: Base Case
Worse Better
NPV10% IRR NPV10% IRR
Pre-production Capital $3.5M $4.5M $2.5M
$22.4M 96% $24.4M 207%
Blended Average Revenue per Tonne Sold $50 $40 $60
$13.4M 62% $32.8M 265%
Average Total Operating Cost $26 +20% -20%
$18.4M 85% $28.1M 212%
Discount Rate 10% NPV using 15% NPV using 5%
$17.3 M $33.6M
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The Rogue Plan for Silicon Ridge
Corporate Update Conference Call
Rogue is pleased to announce a conference call with management to discuss the Optimized PEA and progress on the
2017 Plan. Rogue CEO Sean Samson and VP, Technical Paul Davis will give a corporate update followed by a brief
question and answer period. Interested investors should forward questions to [email protected]. The call is
scheduled to take place on Thursday, May 25th at 12pm Eastern (9am Pacific, 6pm in Western Europe) and dial -in
numbers to access the conference call as well as a corporate presentation will be provided on our webpage,
www.rogueresources.ca, by 3pm Eastern on Wednesday, May 24th. A playback of the call will be available online.
About Rogue Resources Inc.
Rogue is a mining company focused on generating positive cash flow. Not tied to any metal, it looks at rock value and
good grade deposits that can withstand all stages of the metal p rice cycle. The current focus is Quebec’s Silicon Ridge
Project. For more information visit www.rogueresources.ca.
About SNC-Lavalin
Founded in 1911, SNC-Lavalin is one of the leading engineering and construction groups in the world and a major player
in the ownership of infrastructure. SNC- Lavalin provides engineering, procurement construction, completions and
commissioning services together with a range of sustaining capital services to clients in four industry sectors, oil and gas,
mining and metallurgy, infrastructure and power. For more information visit www.snclavalin.com
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Qualified Person
The technical information within this news release was approved by Henri Sangam, from SNC- Lavalin, and Philip Vicker
P.Geo, all individuals that are Qualified Persons under N I 43-101 guidelines and independent of Rogue Resources within
the meaning of NI 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.
The Silicon Ridge Project is under the direct supervision of Paul Davis, P.Geo., VP, Technical and Director of the Company
and a QP as defined by National Instrument 43 -101. The QP has approved the scientific and technical content of this
release.
On Behalf of Rogue Resources Inc.
Sean Samson
President & CEO, Director
For additional information regarding this news release please contact:
Sean Samson
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Ven ture
Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward -Looking Statements: Certain disclosures in this release may constitute forward -looking
statements. In making the forward-looking statements in this release , the Company has applied certain factors and assumptions that
are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company, and
that actual results are consistent with management's expectatio ns. These statements include, among others, statements with
respect to project economics and payback, development activities and decisions and the timing thereof, resource estimates and
potential mineralization, the PEA, including estimates of capital cost s, anticipated internal rates of return, mine production,
processing recoveries, mine life, estimated payback periods and net present values , plans to decide if the project and resources to be
quarried. Although the Company considers these assumptions to be reasonable based on information currently available to it, they
may prove to be incorrect, and the forward -looking statements in this release are subject to numerous risks, uncertainties and other
factors that may cause future results to differ material ly from those expressed or implied in such forward -looking statements. Such
risk factors include, among others, those matters identified in its continuous disclosure filings, including its most recentl y filed MD&A,
changes in regulatory environments, envir onmental compliance, operating and capital cost escalation, ability to raise project
financing and silica pricing. Additional factors include delays in obtaining or inability to obtain required regulatory approvals, permits
or financing, risk of unexpected variation in mineral resources, grade or recovery rates, processing plant failure, equipment or
processes to operate as anticipated, of accidents, labour disputes, the risk that estimated costs will be higher than anticip ated, the
risk that the proposed m ine plan and recoveries will not be achieved, equipment breakdowns, bad weather timing and success of
development activities, mineral resources are not as estimated, titl e matters, third party consents, operating hazards, product prices,
political and economic factors, competitive factors and general economic conditions. Should any of such assumptions prove to be
incorrect or such risks become actual events, than the value of the Company’s securities may decline. Readers are cautioned not to
place undue reliance on forward -looking statements. The Company does not intend, and expressly disclaims any intention or
obligation to, update or revise any forward -looking statements whether as a result of new information, future events or otherwise,
except as required by law.