Resource World Magazine

A P R I L / M A Y 2 0 1 7 www.resourceworld.com 37 Rogue Resources planning Québec silica quarry by Ellsworth Dickson WITH A POSITIVE Preliminary Economic Assessment (PEA) in hand and an updated one planned for Q2 2017, Rogue Resources Inc. [RRS-TSXV] is pleased with how its 100%-owned Silicon Ridge Project in southern Québec is advancing. Located approximately 42 km north of Baie-Saint Paul, trucking the high-purity silica to a port yet to be determined on the St. Lawrence River will be a practical solu- tion since there is easy access to Highway 381. The project is only 4 km from Sitec's silica mine that has been in production for over 50 years. Silicon Ridge silica (98.6% pure) can be used for a variety of applications, includ- ing silicon metal, ferrosilicon, metallurgical grade silicon, glass, fibreglass, quartz pow- der, engineered stone, to name a few. The Silicon Ridge property has virtually end- less high quality quartz that could support a mining operation for decades; however, to get started, the independently prepared NI 43-101 compliant PEA (Met-Chem Canada) envisages a 20-year mine life at a production rate of 200,000 tonnes per year based on a pit-constrained measured resource of 3.2 million tonnes, indicated resources of 6.5 million tonnes and an inferred resource of 4.6 million tonnes, all grading 98.6% SiO 2 . The average stripping rate is 2.6:1 (waste:ore). These figures were based on the 2015 field program comprised of 11,822 metres of drilling in 71 diamond drill holes and 510 metres of surface channel samples. The PEA base case indicates a pre-tax NPV (10% discount) of $36.5 million and an IRR of 40% (after-tax, IRR 33.9% and an NPV of $23.8 million). Being a very simple, open pit quarrying operation with no tail- ings pond needed, pre-production capital requirements are only $10.5 million plus a $2.6 million contingency. The blended aver- age revenue of silica (quartzite) sold across all end use products would be $88.80/tonne sold with an average total operating cost (mining + processing + G&A + royalty) of $45.59/tonne sold. After-tax payback is expected to be 3.1 years. "2017 will be a crucial year for Rogue as we advance Silicon Ridge toward a development decision and in the event of a positive development decision, sub- sequent production," said Sean Samson, President and CEO. "We are very excited about the potential impact of the ongoing optimization on an already appealing proj- ect and the second quarter PEA should have some very interesting results. Our permitting process is already under way and we are busy with commercial negotia- tions on multiple fronts which will remain our focus through the first half of the year. If successful, we believe Silicon Ridge can be a straightforward, profitable producer for many years." The company is working with mining consultants SNC-Lavalin which is develop- ing an optimized mine and CapEx plan that includes a direct shipping option which Rogue management believes will reduce the CapEx as compared to the original PEA of September 2016. As such, it is expected that the original positive PEA figures will be improved. Under the direct supervision of Paul Davis, P.Geo, Vice-President, Rogue Resources is in discussions to part- ner with a contract mining company for road construction, site preparation, pre-development and the eventual quar- rying contract. Run-of-mine ore would be crushed to 120 mm by the contractor. Rogue is also in discussions with road haulage companies for trucking the silica to port, stevedores and port authorities and maritime shipping suppliers. The company is currently consider- ing various port possibilities along the St. Lawrence River. One option under consideration is shipping the silica product to Iceland to a processing facility. Non-binding LOIs have been executed in Iceland where two plants are planned or under con- struction. Talks with other buyers are also underway. In Q2 2015, the company signed a benefits agreement with the Huron- Wendat Nation. Rogue Resources has only 14.9 million shares outstanding fully diluted. Major shareholders include high net worth individuals in Canada and Europe. n Preparing to diamond drill the Silicon Ridge Project in southern Québec. Photo courtesy Rogue Resources Inc. MINING

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