Report to:
KWG Resources Ltd
Canada Chrome Corporation
141 Adelaide Street West
Suite 420
Toronto, Ontario, M5H 3L5
Document No. 1298820100-REP-C0000-00
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The content of this document is not intended for the use of, nor is it intended to be relied upon by any person, firm orcorporation, other than the client and Tetra Tech WEI Inc. Tetra Tech WEI Inc. denies any liability whatsoever to other parties fordamages or injury suffered by such third party arising from use of this document by them, without the express prior writtenauthority of Tetra Tech WEI Inc. and our client. This document is subject to further restrictions imposed by the contract betweenthe client and Tetra Tech WEI Inc. and these parties' permission must be sought regarding this document in all othercircumstances.
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CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 1 of 53
Report to:
KWG Resources Ltd
Canada Chrome Corporation
141 Adelaide Street West
Suite 420
Toronto, Ontario, M5H 3L5
Prepared by Sarath Vala, P.Eng., P.E. Date 9 th February 2013
Reviewed by Deepak Manglorkar, P.Eng, P.E Date 9 th February 2013
Authorized by Date
400-161 Portage Ave East, Winnipeg, Manitoba R3B 0Y4, Canada
Phone: 204.954.6800 Fax: 204.988.0546
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 2 of 53
R E V I S I O N H I S T O R Y
REV. NO ISSUE
DATE
PREPARED BY
AND DATE
REVIEWED BY
AND DATE
APPROVED BY
AND DATE
DESCRIPTION OF REVISION
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 3 of 53
A C K N O W L E D G M E N T
The Tetra Tech project team working on this project would like to acknowledge the guidance, insight and support
provided by Krech Ojard & Associates during the development, execution and completion of this report. The project
team would like to extend their sincerest thanks to Krech Ojard & Associates for their time and availability.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 4 of 53
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY ......................................................................................................................................6
2. INTRODUCTION...................................................................................................................................................8
2.1. PROJECT BACKGROUND ..........................................................................................................................8
2.2. PREVIOUS STUDIES AND REPORTS ........................................................................................................8
2.3. MODES OF TRANSPORTATION.................................................................................................................8
3. PROJECT CORRIDOR.........................................................................................................................................9
3.1. CORRIDOR FEATURES ............................................................................................................................11
3.2. CORRIDOR CONSTRAINTS......................................................................................................................12
3.3. PROJECT LOGISTICS...............................................................................................................................13
4. ROADWAY OPTION...........................................................................................................................................16
4.1. ALIGNMENT...............................................................................................................................................16
4.2. ASSUMPTIONS .........................................................................................................................................17
4.3. BASIS OF DESIGN.....................................................................................................................................18
4.4. EARTHWORK QUANTITIES......................................................................................................................20
4.5. STRUCTURES ...........................................................................................................................................21
4.6. CAPITAL COST..........................................................................................................................................23
4.7. OPERATIONAL COST ...............................................................................................................................26
5. RAILROAD OPTION...........................................................................................................................................28
5.1. ALIGNMENT...............................................................................................................................................28
5.2. ASSUMPTIONS .........................................................................................................................................28
5.3. BASIS OF DESIGN.....................................................................................................................................28
5.4. EARTHWORK QUANTITES.......................................................................................................................30
5.5. STRUCTURES ...........................................................................................................................................31
5.6. CAPITAL COST..........................................................................................................................................34
5.7. OPERATING COST....................................................................................................................................37
6. ROAD – RAIL COST COMPARISON AND ECONOMIC ANALYSIS ...............................................................38
6.1. TRANSPORT CAPACITY (LOAD) SENSITIVITY FOR ROAD OPERATIONS ...........................................39
6.2. TRANSPORT CAPACITY (LOAD) SENSITIVITY FOR RAIL OPERATIONS..............................................40
6.3. SENSITIVITY ANALYSIS FOR TERMS OF FINANCE FOR TRANSPORT CAPACITY (LOAD) VARIATION
41
7. OBSERVATIONS AND ANALYSIS....................................................................................................................50
8. FINAL CONCLUSIONS ......................................................................................................................................52
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 5 of 53
LIST OF FIGURES
Figure 3.1: Project Corridor..........................................................................................................................................10
Figure 3.2: Ontario Provincial Map...............................................................................................................................11
Figure 4.1: Typical Roadway Cross Section ...............................................................................................................19
Figure 5.1: Typical Rail Section ...................................................................................................................................30
Figure 6.1: Sensitivity Analysis – Road Opex and Cost per Tonne..............................................................................40
Figure 6.2: Sensitivity Analysis – Rail Opex and Cost per Tonne ................................................................................41
Figure 6.3: Cost for 30 Year Term (4% Rate) ..............................................................................................................42
Figure 6.4: Cost for 50 Year Term (5% Rate) ..............................................................................................................43
Figure 6.5: Cost for 10 Year Term (2.5% Rate) ...........................................................................................................44
Figure 6.6: Transportation Cost per Tonne ..................................................................................................................47
Figure 6.7: Capex Cost Difference v/s Breakeven Difference for 3 MTPA...................................................................48
Figure 6.8: Capex Cost Difference v/s Breakeven Difference for 5 MTPA...................................................................49
LIST OF TABLES
Table 3.3-1: Summary of Production Rates .................................................................................................................14
Table 3.3-2: Days to Complete Construction Elements ...............................................................................................14
Table 3.3-3: Personnel Required to Complete Project in Three Years ........................................................................15
Table 3.3-4: Personnel Required in a Single Crew ......................................................................................................16
Table 4.3-1: Roadway Design Criteria .........................................................................................................................18
Table 4.4-1: Roadway Embankment Quantities...........................................................................................................20
Table 4.5-1: Bridge Locations & Spans........................................................................................................................22
Table 4.6-1: Material Hauling Cost Estimate................................................................................................................24
Table 4.6-2: Capital Cost Summary .............................................................................................................................25
Table 4.7-1: Operating Cost for Road Corridor (3 MTPA)............................................................................................27
Table 5.4-1: Rail Embankment Quantities ...................................................................................................................30
Table 5.5-1: Railway Bridge Characteristics ................................................................................................................33
Table 5.6-1: Estimated Railway Capital Costs ............................................................................................................36
Table 5.7-1: Operating Cost for Rail Corridor (3 MTPA) ..............................................................................................38
Table 6.3-1: Annualized Cost for Various Terms of Finance........................................................................................45
Table 6.3-2: Difference in Cost for Varying Loads and Terms of Finance....................................................................46
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 6 of 53
1. EXECUTIVE SUMMARY
This document summarizes the economic tradeoff study for a rail and road option along the 330 km alignment
from Nakina to the mining region in the McFaulds Lake area of Ontario. This document presents the project
background, geological features, corridor constraints, transportation options of rail and road, basis of design for
the transportation modes, project logistics, construction elements, summary of capital cost, important elements
of operational cost and sensitivity analysis for load and terms of finance variation. This report has not fully
considered the environmental and socio-economic impact of the corridor on the region. Any comments made in
this report are based on first principle judgment. These impacts and factors should be studied in greater details
in future efforts and studies.
This study highlights the challenging geological features, acute material shortages which impact the decision of
choosing either mode of transportation, and the challenges associated with implementing those modes. The
shortage of critical aggregate material quantified in a separate task (Final Material Availability Assessment
Report, December 14th, 2012) is discussed with its impact on the overall transportation mode development. The
effect of implementation of road corridor and its adverse impact on the rail corridor have been highlighted. The
study has identified the major construction elements, the project logistics and constraints associated with the
project logistics and the cost implications. The operating cost for both the modes of transportations was
tabulated and the effects of transport capacity variations in finance terms analyzed.
A load of 3.0 million tonne per annum (MTPA) was set as the baseline transportation capacity of the corridor. A
30 year term with 4.0% interest rate was considered as the baseline reference term of finance for the project.
Based on the available ore estimates and projected demand, the region has the potential to grow and expand
beyond the baseline scenario of 3.0 MTPA and attract longer terms of financing from the markets. Publicly
available estimates indicate that the region has the potential to produce approximately 220 MTPA ore. For
production rates ranging from of 1.5 MTPA to 5.0 MTPA, the mine life in the region could range from 146 to 44
years. For the base case of 3.0 MTPA, the mine life is estimated to be around 73 years. Based on the range of
operational life, types of material explored in the region, investment scale and potential for the region, a longer
period of development and investment can be expected. A shorter period of operational life and development
may not be appropriate.
A scoping level capital cost (Capex) and operating cost (Opex) were developed. The Capex was based on
geotechnical report, preliminary roadway and rail profile and cross section analysis for quantities. Major
construction elements were identified during the exercise. The Opex was based on resources and equipment
required to transport the baseline load of 3.0 MTPA.
The Capex comparison of the modes of transportation clearly demonstrated that the initial construction cost of
rail are greater than the road, but the Opex for road were higher than that of the rail. The Opex for road are
dominated by equipment, fuel and labor. These factors are more sensitive to market fluctuations and increase
significantly with expanding operations.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 7 of 53
To evaluate the response of the transportation corridor to fluctuations in load and financing, sensitivity analysis
for variation in load and terms of finance was conducted. The transportation capacity was varied by 66%
increase to 5.0 MTPA, and 50% decrease to 1.5 MTPA. The terms of finance were varied by a longer term-rate
of 50 years at 4.0%, and to a shorter term-rate of 10 years at 2.5%. No potential public capital support or cost
sharing by other entities was considered which could influence the terms of finance. Public financial support for
the project could further reduce the cost with attractive terms of finance and offsetting some of the pre-
development cost. The benefits for the regional communities and promotion of large scale economic
development were also not considered.
The sensitivity analysis clearly shows that the rail option responds more favorably to increasing loads. Increasing
loads resulted in significant increase in Opex for the road but had minimal impact on rail Opex resulting in
significant lower cost per tonne for the rail. This clearly indicates that the rail option responds more favorably to
increased load, and terms of finance.
Longer terms of finance had similar effect on both modes of transportation, with rail reacting more favorably than
road. Both modes of transportation react unfavorably to shorter terms.
Further analysis into the differential savings in Opex reveal that the savings break even with the initial Capex
difference in a much more reasonable time frame of 6 years for the Base Case terms. If the load increases this
breakeven year is achieved much earlier between 3 to 4 years. This indicates that the potential reduction in long-
term annual cost for the base case result in the potential for major savings in the total cost of mine to market
economics. This provides an opportunity to improve the project economics during fluctuations in commodity
prices over the life of the resource, operations and allow more stable, consistent returns on the private and
possible public investment provided the infrastructure financing can be amortized beyond 10 years, which is
common for infrastructure of this type and scale.
Public financial support for the project could further reduce annual costs and would further increase the
economic value of the rail infrastructure relative to a road system, since road cost are dominated by operating
factors. An investment in rail capital has a larger impact on a per dollar basis on improved total per tonne annual
cost.
This analysis brings out the features that the rail option is more robust, low maintenance, cost-reflective and
demand-responsive to operational and market conditions than the road option. The lower medium and long term
cost for rail provides an opportunity to develop a more stable and consistent transportation corridor in the region,
which can respond well to development and operations. The road options can significantly impact the economic
and physical development of a rail line in the future due to depletion of economically available rock and NFS
material along the corridor. Further investment in developing the concept, design elements, project logistics, and
financial arrangements is highly recommended.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 8 of 53
2. INTRODUCTION
2.1. PROJECT BACKGROUND
Canada Chrome Corporation (CCC) has a series of nearly contiguous claims for an infrastructure corridor
between Nakina and McFaulds Lake in northern Ontario, Canada. CCC is exploring the options of either
constructing a railroad over these claims and has requested an economic trade-off assessment to review the
validity of these plans relative to an option of developing a roadway. The infrastructure would be used to
provide access from the Ring of Fire prospect to an existing railroad near Nakina, Ontario for assisting with the
hauling and transportation aspects of the Mining operations, as well as the supply of materials to the operations
and potential freight and passenger to assist local First Nations communities.
CCC requested Tt to perform a Tradeoff Study at a scoping level for the capital expenditure (Capex) –
operational expenditure (Opex) along the corridor for both transportation modes (Railroad & Roadway), and
compare the results.
2.2. PREVIOUS STUDIES AND REPORTS
This evaluation is built and advanced further predominantly based on the information received from the following
three studies, completed prior to the initiation of this evaluation.
Krech Ojard & Associates, Consulting Engineers and Architects (KOA) completed a feasibility study for the
proposed infrastructure corridor. This study included a preliminary design the railroad horizontal alignment &
profile for the top of rail, which was provided in a 99 sheet plan set to CCC.
Golder Associates, Inc. (Golder) was hired by CCC, under the direction of KOA to complete a preliminary
geotechnical exploration program within the infrastructure corridor. Golder conducted geologic and geotechnical
investigations to explore subsurface conditions within the proposed corridor and compiled the findings into a
geotechnical report. More than 850 soil borings were completed within the proposed infrastructure corridor. Logs
were prepared documenting information gathered from boreholes which include test results of in situ testing of
soils encountered and lab testing of collected soil samples.
Tetra Tech completed a Material Availability Assessemnt report for KWG Resources, on December, 14th, 2013.
This was an analysis of material impact along the corridor based on the above Golder Geotechnical Report and
cross sectional analysis of the preliminary corridor design.
2.3. MODES OF TRANSPORTATION
This tradeoff study attempts to compare two modes of transportation roadway, and railroad. The design for
roadway option for this evaluation was completed by Tt, and the design for railroad option was completed by
EBA Engineering Consultants Ltd. operating as EBA, A Tetra Tech Company (EBA) with support from Albert
Azoulay with BPR division of Tt.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 9 of 53
The roadway was designed to meet Transportation Association of Canada (TAC), and Ontario provincial
standards. The railroad was designed to meet American Railway Engineering and Maintenance-of-way
Association (AREMA) standards.
The same horizontal alignment was used for both roadway, and railroad options to keep things consistent during
the comparison. While other horizontal alignments are possible within the corridor, it is unlikely that such
variations will have any substantial impact on the conclusions of this analysis considering the regional surficial
geology and the limited land availability found in the Northern 2/3rds of the area.
3. PROJECT CORRIDOR
The proposed infrastructure corridor is located between Nakina and McFaulds Lake in the northwestern region of
the province of Ontario, in Canada. The southern end of the corridor, near Nakina, ON, is located about 300
kilometers northeast of Thunder Bay, ON. The northern end terminates at a point 330 kilometers due north of
Nakina, near McFaulds Lake, ON.
The project corridor is shown in the following Figures 3.1& Figure 3.2.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 10 of 53
Figure 3.1: Project Corridor
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 11 of 53
Figure 3.2: Ontario Provincial Map
3.1. CORRIDOR FEATURES
The topography of the 330 km Corridor is best described by extensive flat lowlands. Topographic features are
low, linear, rounded hills aligned north and south with maximum elevation of 15 m above the surrounding
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 12 of 53
swamps and bogs. The infrastructure corridor generally traverses north across the Canadian Shield towards the
Coastal Plain/Hudson Bay Lowlands.
The terrain drains to the northeast in a series of low gradient rivers that cross the corridor. There is a total
elevation drop of 145 m from Exton (southern end) to the proposed mine site where the final elevation is 165 m.
Most of the terrain in the corridor is characterized by low topographic relief and 1 to 3 meters of surficial peat
overlying clayey/silty lake sediments. Low linear ridges, consisting chiefly of fine sand, provide most of the
topographic relief and the only granular resources available for building the proposed roadbed embankment.
Materials suitable for use as embankment fill have been investigated by Golder and have been summarized in a
report titled, “Preliminary Material Site Geotechnical Report”, dated December 17, 2010. The report identifies a
total of 22 good material sources with 12 being potential rock quarries and 10 sources of sand and gravel,
although the volume of gravel is quite limited. Bedrock of suitable quality for production of ballast and sub-
ballast material exists along the first 90 km of the route, but only near km 279 in the north portion of the route. In
total, the materials source evaluations have identified in excess of 22,700,000 m3 of material in these deposits;
6,350,000 m3 are quarry rock and 16,350,000 m3 are sand and gravel. Review of the geotechnical information
along the route identifies that some of the cut material will be suitable for use as general fill below the non-frost
susceptible backfill that will be placed below the sub-ballast. In particular, cuts in bedrock will produce high
quality general fill materials
As noted, there are considerable deposits of peat along the proposed alignment. In addition, there are deposits
of soft lacustrine silts and clays that do not provide good foundation conditions for the railway embankment. A
cursory evaluation of the thicknesses of peat materials has identified that nearly 27 km of the route is located in
areas where the peat is in excess of 2 m thick. On the other hand it has been determined that nearly 5 km of the
route is located where cuts will be made entirely in bedrock. In locations where the embankment will be founded
on either thick peat or soft silts and clays, provision is made to improve embankment support through the use of
geotextile materials below the embankment fill. Examination of the available geotechnical information has
indicated that geotextile will be required along roughly 15% of the route for the rail, and 40% for the roadway.
3.2. CORRIDOR CONSTRAINTS
The geotechnical evaluation performed in this infrastructure corridor has determined that the existing ground is
comprised of five soil and rock groups, rock (solid rock that will have to be excavated by blasting), glacial till
(heterogeneous mix of clay, silt sand and gravel with occasional cobbles and boulders), granular soils (generally
fine sand with very small amount of gravel in some areas), fine grained soils (silt and clay), and peat (highly
compressible organic material).
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 13 of 53
The existing ground along the majority of the infrastructure corridor is covered with highly compressible peat with
varying thickness, up to 5 m (and possibly more). This type of soil is not suitable for the construction of either the
roadway, or railroad options and has to be disposed offsite.
The geographic location of the corridor and local weather conditions, warrant the use of non-frost susceptible
material as foundation for the railroad option, and the base for both options. All encountered soils, fine grained
and granular (silty sand, sandy silt, silt and silty clay) have high to very high degree of frost susceptibility. Hence
the non-frost susceptible material would most likely have to be produced from crushed rock, which is sparingly
available in the corridor and mostly have to be hauled in form other sources.
The remote location of the corridor would also have considerable impact on the construction, operation, and
maintenance of either transportation modes.
3.3. PROJECT LOGISTICS
The project logistics and strategy was based on the major construction elements of the corridor. They were
identified as follows:
1. Mobilization
2. Service road
3. Main rail or road corridor
4. Major bridges
5. Minor bridges.
Mobilization will be the first step of the construction process and will include setting up of the project office,
construction of camps, manpower mobilization and infrastructure to receive material for management and
construction. The major construction elements have to begin as soon as practical. Mobilization can vary from 16
months to 24 month period.
The production days or time to complete units of these major construction elements were reviewed, researched
and evaluated based on past projects, previous studies, input from contractors, engineers and suppliers.
They are summarized as below:
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 14 of 53
Table 3.3-1: Summary of Production Rates
Based on the above production rates of the construction elements, following days of production would be
required to complete the project‘s construction elements.
Table 3.3-2: Days to Complete Construction Elements
The construction sequence for the proposed corridor is expected to be as follows,
Mobilize & transport material needed to construct bridges by airlifting, and by winter roads
Build construction access roads or temporary access roads where needed to deliver bridge material
and main corridor construction materials.
Begin construction of major and minor bridges simultaneously
Mobilize material for the construction of main road/rail corridor
Progress the construction of the road/rail in segments and advance it steadily
It is assumed that about 200 km of temporary access roads would have to be constructed aside from the existing
winter roads to mobilize the material for the development of the corridor.
Two options were considered for completion of the project:
1. Completion in least amount of time (3 years).
2. Balancing development schedule with least amount of cost and personnel.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 15 of 53
To evaluate the above options, crew sizes for the above construction elements were evaluated. A crew size
could vary from 10 people for service road to 30 people for long span major bridges. Based on past experience
and input from contractors the following crew sizes were formed,
To achieve the above production days required in three years, following crew size would be required:
Table 3.3-3: Personnel Required to Complete Project in Three Years
Given the required time of three years to complete major construction elements, it is evident that one or more
crews have to be deployed for each of the elements. The above table illustrates that, the main corridor would
require 2 crews for road and rail. The major bridge spans would require 2 crews for road and 3 crews for rail.
The minor bridge spans would require 2 crews for road and rail. Rail crews will always be larger than the road
crew to make up for the slower production and slightly involved construction operations and elements.
If the construction were to proceed with cost as the primary governing factor, the key focus would be to keep the
crews as small as possible. The following crew size would be required to keep the personnel cost to a minimum
and yet achieve a reasonable rate of production:
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 16 of 53
Table 3.3-4: Personnel Required in a Single Crew
The above tables reflect the fact that in order to maintain a reasonable schedule and cost, multiple crews will be
required to start concurrently on each of the major construction elements. The long spans are critical and will
govern the timeline for the project completion. The construction period would be longer by approximately 1363
days (4.5 years) for the road option, and 2328 days (7.8 years) for the rail option.
It is also cautioned that there are several major spans along major stream crossings. Substantial design and cost
will have to be allocated to substructure development to protect from ice and scour. Further evaluation and study
is recommended to understand the cost and schedule implications to the project.
4. ROADWAY OPTION
4.1. ALIGNMENT
The horizontal alignment for the roadway utilized by Tt in this tradeoff study is based on an alignment shown in
plans provided by KOA. For the purposes of this evaluation, the drawings provided by KOA showing the rail
alignment and an initially proposed top of rail profile were used as a baseline for the road alignment. The
alignment begins at the existing Canadian National railway just to the west of Nakina, ON near Exton and
extends north towards the McFaulds Lake, ON. The length of the alignment from the junction with the CN
railway to the mine site is 330.2 km long.
The horizontal alignment from the preliminary design was maintained for the roadway design to be consistent
with the railroad design. The alignment was divided into six sections titled Alignment A to Alignment F. Tt
simplified the horizontal alignment by combining the six alignments sections, and removing the spirals attached
to the horizontal curves.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 17 of 53
Tt developed the profile for the proposed roadway to meet the TAC & Ontario Provincial standards. The profile
was further optimized to minimize the cut & fill along the alignment.
The geotechnical information utilized for this design was provided by Golder summarized in a 99 drawing set
titled “Preliminary Geologic Plan and Profile” (drawings I-01 to I-98), dated December 12, 2010.
4.2. ASSUMPTIONS
The overall drainage concept for this evaluation is limited by the hydrology components like groundwater effects,
freeze/thaw effects, soil properties, etc., which affect the catchment response characteristics. Size and number
of watercourse culverts were assumed, since detailed hydrological, catchment area, and hydraulic analyses
were not available. It is assumed that an 18 m long, 1200mm culvert will be needed every 5 km with appropriate
safety end treatments. Detailed hydrological and hydraulic analyses shall be performed during the detailed
design stage.
Ditches are included in the design for the purpose of collecting seepage from high moisture low density bog
material caused from the overburden pressure of the higher density roadbed over time, and to intercept ground
seepage from beyond the ditch banks. They also promote a drying and stabilizing effect on the roadbed.
The existing ground information and topography for this design was obtained using LiDAR (Light Detection and
Ranging) image data. Although sufficient for a preliminary design level evaluation, the accuracy of LiDAR data is
restricted due to aircraft positioning, and spatial resolutions limitations. Survey quality contours are more reliable
and known to give better estimates and should be utilized during the detail design stage. The bridge locations
and lengths used in this evaluation were provided in KOA plans (including the 100 year flood elevations).
A roadway section with 600 mm Granular B-Type 1 base course, and 300 mm Granular M crushed rock wearing
course was used for this analysis, based on the available geotechnical information and engineering judgment. A
specific pavement design analysis was not performed as part of this evaluation due to time constraints, and lack
of all the detailed information. The assumed road and pavement cross-sections were based on TAC standards.
It should be noted that the use of heavy-haul trucks operating persistently would likely result in increases to
these standards (i.e. TAC standards would be inadequate) and the associated cost of capital to construct and
operate the road. Such factors are not considered in this analysis, but should a road option be favored for
development, further analysis of the cross-section, required high-quality aggregate material requirements, and
associated impacts on both capital and operations maintenance must be considered.
Although this preliminary level evaluation couldn’t make provisions for the clear zone concept, safety berms, and
the determination of the length of need for roadside barriers due to budget and time constraints, these concepts
shall be taken into account at the detailed design stage. Such factors may add up to 6% to of the initial capital
cost and have not been considered as such in the estimate.
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Due to the preliminary information on the strength of the in-situ soil, for the purpose of this study it is assumed
that there is no additional cut or fill needed than what is determined by the road design software (Autodesk Civil
3D). Although in reality this may vary and substantially impact (increase) the embankment cut, and fill quantities.
4.3. BASIS OF DESIGN
The preliminary design completed by KOA for railroad was utilized as a starting point in this evaluation. The
horizontal alignment for the roadway option was simplified by eliminating the inbound and outbound spirals
attached to the horizontal curves, which increased the length of the roadway alignment by 300 m. The vertical
alignment (roadway profile) was completely redesigned and optimized to reflect the differing geometric
constraints of a road relative to rail standards in an attempt to minimize the embankment cut & fill areas. The
road centerline was generally held to the original rail centerline. This decision was made based on limitations on
readily interpretable data within the corridor, consideration of the narrow band of viable ground within the
corridor, and the relatively flat topography. The resulting effort and overall conclusions are unlikely to be
significantly impacted should the horizontal road alignment shift within the area.
The geometric design for the proposed roadway (including horizontal and vertical alignments) was completed to
meet TAC standards for a design speed of 90 km/h, with 80 km/h operating speed even though the trucks
loaded at full capacity may travel at lower speeds on average.
The following Table 4.3-1 summarizes the design criteria used for this analysis,
Table 4.3-1: Roadway Design Criteria
Width (travel) 12.0 m
Design Speed (Desirable) 90 km/h
Operating Speed (Desirable) 80 km/h
Cross Slope 2%
Maximum Grade 6%
Maximum Superelevation 6%
Radius (Desirable) 340 m
Desirable K value for Crest vertical curve 53
Desirable K value for Sag vertical curve 40
Minimum Stopping Sight Distance 350 m
Surface Course Thickness 300 mm
Base Course Thickness 600 mm
Ditch Fore Slopes 2H:1V *
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Ditch Back Slopes 3H:1V *
Berm Height None
Design Load B Train 8 axles (62500kg gross)
*= For preliminary purposes only
Superelevation is incorporated into the design of horizontal curves to negate the effect of a diminished friction
factor from the use of granular aggregate as surface course instead of a hard (asphalt or concrete) surface. This
will reduce the possibility of vehicles sliding off the road at curves.
The length of the bridges was shortened from preliminary design bridge lengths provided by KOA to reduce
costs, after examining them on a case-by-case basis. A total of approximately 1670 m of bridge structure was
eliminated by removing spans and extending the bridge approach embankments. Further investigations, later in
the development process, should be planned to determine more accurate additions or decreases.
Figure 4.1: Typical Roadway Cross Section
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4.4. EARTHWORK QUANTITIES
A cross-sectional analysis was performed using average end-area method, discounting bridge locations, to
estimate the preliminary embankment cut and fill, and material quantities needed to construct the roadway. The
corridor was divided into 10 km segments to determine the localized impacts.
The following Error! Reference source not found. summarizes the embankment earth work quantities on a
segment by segment basis for the proposed roadway,
Table 4.4-1: Roadway Embankment Quantities
Segment Begin Sta. End Sta. Cut (m3) Fill (m3) Surface Course (m3) Base Course (m3)1 0+000 10+000 90,382 56,773 37,182 85,4092 10+000 20+000 184,751 87,844 37,488 86,1123 20+000 30+000 228,870 148,390 36,785 84,4964 30+000 40+000 202,466 95,285 36,152 83,0425 40+000 50+000 223,629 143,406 37,624 86,4226 50+000 60+000 114,834 38,277 37,875 87,0007 60+000 70+000 258,104 135,050 37,253 85,5718 70+000 80+000 199,177 67,298 37,307 85,6959 80+000 90+000 194,956 253,509 33,568 77,10610 90+000 100+000 112,006 51,653 36,551 83,95911 100+000 110+000 93,478 183,332 35,205 80,86712 110+000 120+173 136,041 69,943 34,423 79,07013 120+173 130+000 79,329 82,028 36,854 84,65514 130+000 140+114 73,294 31,229 36,849 84,64315 140+114 150+000 145,218 69,362 37,443 86,00816 150+000 160+000 120,109 38,457 36,405 83,62317 160+000 170+000 82,501 42,304 37,263 85,59518 170+000 180+000 66,041 23,851 36,195 83,14119 180+000 190+000 75,540 41,119 37,117 85,25820 190+000 200+000 72,937 21,059 36,564 83,98821 200+000 210+000 93,280 22,238 37,875 87,00022 210+000 220+000 65,732 49,550 36,618 84,11223 220+000 230+000 69,254 26,591 37,875 87,00024 230+000 240+000 84,656 34,614 37,875 87,00025 240+000 250+000 76,664 43,556 36,669 84,23126 250+000 260+000 81,243 20,214 37,364 85,82627 260+000 270+000 68,582 36,459 36,796 84,52228 270+000 280+130 80,902 10,501 36,786 84,49829 280+130 290+000 87,646 93,423 37,301 85,68230 290+000 300+000 117,574 64,892 37,076 85,16431 300+000 310+000 104,998 54,425 37,875 87,00032 310+000 320+000 63,347 29,538 37,331 85,75033 320+000 330+000 71,966 146,852 37,043 85,088
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The quantities shown in the table above are derived from the optimization of the roadway profile by Tt and are
assumed to only slightly vary during the detailed design by further optimizing the vertical alignment of the
roadway.
It can be observed that while the cut and fill quantities vary largely between segments, the surface and base
course quantities are relatively similar because of the constant geometry of the cross sections, and even the
minor differences can be attributed to the bridge locations present in the respective segments and
superelevation effects.
The geotechnical analysis performed for the study suggests that none of the segments have sufficient in-situ
rock material available for the construction of surface and base courses from the excavated cut material. Only
segments 1 thru 5, and 9 have some in-situ rock. The cut material comprises only of Peat, Fine Grains, Granular
soil, or Till in the remaining segments. So rock needs to be hauled from other sources to complete the
construction of a road (in all the segments).
4.5. STRUCTURES
The locations of bridges along the alignment were determined from the drawings provided by KOA. The bridge
lengths provided appear to have been chosen by beginning and ending the structure beyond the 100-yr flood
plain. Hence the bridge spans were quite long and usually comprised of more than one span. No further
hydrology, environmental, or geotechnical evaluations were made in this effort and any assumptions made are
based on engineering judgement and the available data. These changes and further modifications should be
confirmed at later stages of the work.
As stated earlier the lengths of the bridges were shortened wherever possible by eliminating spans and
extending the bridge approach embankments, as part of this evaluation in order to reduce costs. Where there
were multiple options available for the same bridge, the option with the minimum length was chosen.
A total of 65 culverts, 18 m long & 1.2 m wide will be needed to accommodate for the drainage requirements for
the construction of the roadway based on the assumptions made.
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The following Table 4.5-1 provides a summary of bridge location and length adjustments
Table 4.5-1: Bridge Locations & Spans
KOA Begin Sta. Tt Begin Sta. KOA End Sta. Tt End Sta. KOA Length (m) Tt Length (m)1+213.960 1+213.305 1+396.890 1+396.235 182.93 182.9315+100.000 15+101.260 15+202.100 15+203.360 102.10 102.1023+132.250 23+132.100 23+250.050 23+249.900 117.80 117.8023+850.000 23+848.000 24+020.000 24+018.000 170.00 170.0031+710.000 31+652.000 32+085.000 32+027.000 375.00 375.0038+100.000 38+100.500 38+180.000 38+180.500 80.00 80.0046+151.950 46+151.800 46+218.350 46+218.200 66.40 66.4064+661.550 64+701.900 64+825.750 64+866.100 164.20 164.2073+360.000 73+406.000 73+510.000 73+556.000 150.00 150.0079+858.150 80+321.150 80+821.200 81+258.850 963.05 **937.7083+314.950 83+393.975 83+412.050 83+445.025 97.10 51.0588+916.850 88+971.250 89+065.350 89+119.750 148.50 148.5092+680.000 92+725.000 92+850.000 92+895.000 170.00 170.0098+714.250 98+726.725 98+919.150 98+906.275 204.90 **179.55101+400.000 101+400.500 101+530.000 101+530.500 130.00 130.00105+330.000 105+264.000 105+500.000 105+434.000 170.00 170.00106+310.000 106+232.000 106+615.000 106+472.000 305.00 **240.00108+530.000 108+462.000 108+630.000 108+562.000 100.00 100.00109+940.000 109+862.500 110+005.000 109+927.500 65.00 65.00112+155.000 112+002.500 112+470.000 112+317.500 315.00 315.00114+135.000 113+971.000 114+330.000 114+166.000 195.00 195.00119+765.000 119+598.500 120+340.000 120+173.500 575.00 575.00123+880.000 123+901.500 124+020.000 123+997.500 140.00 **96.00134+425.498 134+425.498 134+553.298 134+553.298 127.80 127.80139+860.000 139+890.000 140+135.000 140+114.000 275.00 **224.00150+590.437 150+615.400 151+029.337 151+003.600 438.90 **388.20162+539.698 162+173.750 162+770.298 162+302.250 230.60 **128.50170+311.000 169+864.000 170+344.000 169+897.000 33.00 33.00173+082.000 172+784.850 173+402.000 173+074.150 320.00 **289.30178+488.448 178+058.550 178+649.048 178+168.450 160.60 **109.90179+212.000 178+769.840 179+278.000 178+814.160 66.00 **44.32182+180.000 181+743.400 182+516.000 181+943.600 336.00 **200.20197+568.609 197+321.900 197+780.609 197+406.100 212.00 **84.20199+032.000 198+793.000 199+436.000 199+055.000 404.00 **262.00213+875.000 213+775.000 214+347.800 214+107.000 472.80 **332.00247+300.292 246+984.851 247+772.090 247+303.149 471.80 **318.30257+920.000 257+732.000 258+044.000 257+812.000 124.00 **80.00258+499.000 258+270.000 258+576.000 258+325.000 77.00 **55.00260+686.300 260+441.650 260+826.000 260+537.350 139.70 **95.70263+467.000 263+251.000 263+544.000 263+306.000 77.00 **55.00269+334.250 269+072.950 269+510.250 269+207.050 176.00 **134.10273+636.000 273+394.000 273+713.000 273+449.000 77.00 **55.00278+867.840 278+245.100 279+189.740 278+464.900 321.90 **219.80279+833.806 279+833.806 279+844.447 279+844.447 10.64 10.64280+732.031 279+997.802 280+864.427 280+130.198 132.40 132.40285+308.717 285+308.717 285+319.357 285+319.357 10.64 10.64288+698.825 288+698.825 288+709.465 288+709.465 10.64 10.64297+868.000 298+512.100 298+112.250 298+723.100 244.25 **211.00311+190.346 312+034.150 311+409.446 312+177.850 219.10 **143.70325+813.294 326+383.100 326+083.794 326+602.900 270.50 **219.80
*Note: The station ranges for bridges have also been affected by the removal of spirals from horizontal curves
** Bridge length shortened
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4.6. CAPITAL COST
The capital cost for this option includes all the costs incurred during the construction of the roadway. The capital
cost has further been divided into two segments direct costs, and indirect costs. Direct costs are the costs that
are incurred for the construction of the roadway only, like construction material costs, equipment cost, cost of
labor, the cost involved in site preparation for construction, actual construction etc.
Indirect costs are also the costs that are incurred during the construction of the roadway, but they are for all the
other necessary tasks which shall be done for the successful completion of the project. Indirect costs include
items like, costs associated with camping & dining for construction labor, health & safety, site security, material
storage, quality control, engineering procurement & construction management (EPCM), environmental and other
administrative permits, etc. Cost of a service road and the expense of bringing the construction material to the
construction site were identified as an indirect cost to highlight the expense of working in this remote region and
reflect the acute shortage of good material along the corridor. This cost is also subject to large variations
depending on the sources of the material and procurement strategy applied to deliver the material to the
construction site. It is possible that the construction contract may be independent of the material provision
contract. Similar philosophy may apply to the service road construction.
The following costs are excluded from this capital cost estimate,
Right-of-way, easement, and other land acquisition costs
Property taxes and/or other legal costs
Insurance
Cost incurred to complete preliminary design & other feasibility studies
Cost for environmental impact studies, truck/traffic Impact studies, mitigation measures, etc.
Cost involved in coordinating and liaising with public & regulatory agencies
Force majeure
To identify approximate and reasonable cost, the material hauling for the construction of roadway is assumed to
be handled by an independent contractor during the course of the work. The haul distance from the material
source to the construction site would have a substantial impact on the capital cost for the project. Considering
the local geology and interpretations of the available geotechnical data, it appears that much of the embankment
and surface materials will require transport from sites with suitable material properties over distances that are
beyond the range of typical linear corridor development. A rationalization of these distances was considered in
the analysis of the embankment construction.
As part of a separate task for evaluating material availability assessment along the corridor, Tt performed an
extensive preliminary quantity analysis of the road and rail corridors. Golder Study results and corresponding
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stratigraphy was used to quantify the types and quality of material available for construction. A geotechnical
engineer examined the stratigraphy along the corridor and determined the percentage of rock and other suitable
materials that will be available from the cut sections along the corridor. The material quantity and type of
material required for road and rail corridor were compared against the material quantity and types available from
the cut sections. The tabulated results conclusively illustrated that rock sources may be sufficient at the south
end and the north end of the project but there is a significant stretch of the corridor in the middle which has a
shortage of suitable material, especially critical rock aggregate.
This significant conclusion and findings led Tt to account for cost of hauling material from distant places to the
construction site, and hence make the transportation corridor achievable. It is evident from the requirements of
the cross sections for both the modes of transportation that critical rock aggregate is an absolute requirement.
Absence of good quality rock aggregate may pose a challenge to the transportation corridor for either rail or
road.
It became necessary in the analysis to account for material to be imported from distant sources for the corridor
other than those identified in Golder Report. Since this information is currently not available, an assumption was
made to account for various costs of hauling or importing the material from a range of distances.
The following Table 4.6-1 shows the material haul cost for a range of haul distances,
Table 4.6-1: Material Hauling Cost Estimate
The haul distance range of 50 to 75 km is considered for estimating the capital costs for the project based on the
known local conditions. This needs to be evaluated in more detail before the detail design stage to update the
project capital cost.
The following Table 4.6-2 summarizes the capital costs incurred for the roadway option,
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Table 4.6-2: Capital Cost Summary
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4.7. OPERATIONAL COST
The major elements of the operational costs for this study were determined as follows:
Labor cost for trucks
Truck cost
Fuel cost
Transloading cost at Nakina
Road Maintenance
Indirect and Overhead
Profit
The number of trucks calculation is primarily based on the baseline load of 3MTPA. Truck capacities of 40T and 70T were
considered for this effort. The 70T model was used in this analysis as it appeared to provide better economics relative to
fleet size and maintenance; however this model is non-standard in the area so limited comparable costs were available.
Even so, the rationalized costs described are based on industry data and likely operational factors that should be valid for
this level of analysis. Detail logistical exercise of travel time, driver behaviour, varying truck capacity, truck types, truck
performance, impact of road maintenance on truck performance, and other truck fleet optimization parameters were
considered out of scope at this level.
Based on a high level effort, the operational costs are summarized as follows:
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Table 4.7-1: Operating Cost for Road Corridor (3 MTPA)
These costs vary with the operating tonnage. Operation levels of 1.5 MTPA and 5.0 MTPA were also considered to
evaluate the sensitivity of the annual road costs. This information is presented in Section 5.
The major components for the road Opex are truck cost at 31%, crew cost at 26%, and fuel cost at 19%. Maintenance
cost was at 5% and subject to increase with volume of trucks and level of due diligence on maintenance program. This
particular corridor will experience exclusively heavy truck traffic which will be beyond the level of traffic volumes meant for
implementation of TAC and provincial standards. The maintenance cost reflected in this report may be conservative and
may become a significant component of the operating cost for the road.
Due to the higher cost allocation to items like fuel and labor, the road operation is subject to more variability in the total
cost. These costs tend to trend upward over time and will have a higher impact on road operational cost. No effort to
account for these inflationary differences have been included in the analysis, but the results should be considered in that
light.
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5. RAILROAD OPTION
5.1. ALIGNMENT
The horizontal alignment for the railway utilized by this tradeoff study was provided in a series of drawings developed by
KOA. These drawings show the plan and an initially proposed top of rail profile for the proposed railway. Geotechnical
information used to evaluate foundation conditions along the railway alignment are summarized in a 99 drawing set
prepared by Golder titled, “Preliminary Geologic Plan and Profile” (drawings I-01 to I-98), dated December 12, 2010.
The railway starts at the existing Canadian National railway just to the west of Nakina, ON near Exton. The railway
alignment from the junction with the CN railway to the mine site is 330.2 km long.
The railway alignment was previously divided into six sections denoted as Alignments A through F. The six sections were
ultimately combined into a one all-encompassing alignment which was used to determine material quantities.
The alignment, as developed by KOA, includes a total of 20 sidings. Three of the sidings are roughly 2 km in length and
are for the passing of trains. There are eight sidings for maintenance purposes and nine for equipment storage, with each
of these being between 400 and 500 m long.
5.2. ASSUMPTIONS
The horizontal alignment previously chosen by KOA has been utilized in the evaluation carried out by Tt/EBA. The initial
profile originally developed by KOA was evaluated but it was determined that cut and fill material quantities could be
further optimized with adjustments to the vertical profile correlated with the available Golder information, as the original
plan and profile was developed prior to the completion of the preliminary geotechnical studies.
The terrain crossed by the railway, is quite varied, being either surficial soils or rock. The terrain is well documented in a
report prepared by Golder titled, “2010 Geology and Terrain Unit Geotechnical Data Report”, dated December 27, 2010.
The level of information provided is extensive considering the preliminary scope of this effort and provides a basis for
building the analysis.
5.3. BASIS OF DESIGN
The railway is expected to carry an estimated 3 to 5 Mtpa. It will comprise a single track with sidings for equipment,
maintenance, and passing. The American Railway Engineering and Maintenance-of-Way Association (AREMA) provides
guidelines for design of railway structures (AREMA, 2010) and these were apparently considered in the selection of the
alignment by KOA and have been utilized in the tradeoff study design. A Golder report titled, “Preliminary Infrastructure
Corridor Roadbed Embankment, Preliminary Geotechnical Report”, dated January 2011 was reviewed to determine the
proposed embankment design cross sections that were previously suggested for the project. Several different cross
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sections were suggested in this report and have formed the basis of the simplified cross sections utilized in the EBA
tradeoff study carried out here. The two suggested cross sections utilized by EBA are shown in Figure 1. Optimization of
the rail profile along the given alignment was based on AREMA standards for vertical curves, with additional expert
input/review from Mr. Albert Azoulay, Eng, P.Eng., Dir. Railway Eng., Tt. Mr. Azoulay provided review and input with
regard to design criteria and geometry, as well as recommendations regarding further modifications to typical cross
sections used.
The geometric design used for the rail has the following design parameters:
Maximum Rail Grade: 1.0%
Speed of train: 55 mph
Minimum Curve length based on: L = (D x V2 x K)/A
Where: V = Speed of train in mph
L = Length of Vertical Curve
D = Absolute value of the difference in rates of grades expressed as a decimal
A = 0.1 feet/sec/sec
K = 2.15 (conversion factor to give L in feet)
EBA has assumed that the track and embankment will have the following characteristics:
Rail: 136 lb. Continuous Welded Rail (CWR).
Ties: Wood or concrete with elastic fasteners at 60 ties per 100’ of track.
Ballast: Ballast to be crushed rock sourced from rock quarries along the line and will have the hardness and
fracture characteristics that conform to railway standards.
Sub-ballast: Clean pit run gravel or crushed rock sourced from pits/quarries along the route.
NSF Fill: Non frost susceptible fill consisting of sand or sand and gravel with less than 20% fines (clay and silt).
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Figure 5.1: Typical Rail Section
5.4. EARTHWORK QUANTITES
The design cut and fill cross sections and revised profile have been utilized in AutoCAD Civil3D to determine the
earthwork quantities for embankment construction. The earthwork quantities for the rail embankment and sidings
determined in this evaluation are summarized in Table 5.4-1.
Table 5.4-1: Rail Embankment Quantities
Start
Station
End
Station
Cut Required
(m3)
Fill Required
(m3)
NFS Fill
Required (m3)
Sub-Ballast
(m3)
Ballast
(m3)
0+000 330+200 5,472,998 3,099,648 4,071,783 667,564 498,646
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It is assumed that the majority railway embankment will be constructed during the non-freezing months when fill materials
can be placed and compacted. Winter months, depending on annual variations, may provide the best opportunity to
advance access and temporary works, including roads, bridges, camps, and heavy equipment. Additional embankment
may be constructed throughout the year, but special attention would be required to prevent longer-term maintenance
performance. It may be prudent to install bridges and bridge foundations during the winter when access can be gained to
the bridge sites on temporary winter roads. Quarrying operations may be carried out year round, but a summer operation
may be more economical. Ballast placement and track laying are expected to occur during non-freezing months.
The construction process will require the use of various pieces of large construction equipment that can build the
embankment and track structure in a timely manner. It has been assumed that a specialized railway construction
contractor will be contracted to provide the specialty railway construction equipment such as track layers, ballast tampers,
and regulators.
Sub-Grade fill (NSF or general fill) and sub-ballast will be placed using earth moving equipment or dump trucks that will
dump the material near the end of the constructed embankment where a dozer will push the fill off the end of the
constructed embankment. Culverts will be installed at designated locations as work progresses with embankment
construction. All fill materials will be placed in suitable lift thicknesses and compacted.
Track construction will commence at the Exton junction working progressively towards the mine site. It is assumed that
track construction will be done using mechanized track laying machinery.
5.5. STRUCTURES
Numerous structures are required to cross water courses along the proposed alignment. A series of bridge drawings
were developed by KOA and others and have been utilized in EBA’s evaluation of the railway. In addition to the required
47 bridges, EBA has also estimated required culvert locations based on topography along the alignment.
The proposed bridges are typically of the following design:
Bridge type: single track multi span pre-cast bridges with ballast deck structure, typically on steel girders or a
through-truss design for longer crossings.
Bridge foundations: driven steel piles, large diameter pipe piles or piers on bedrock with options for larger drilled
shaft foundations at some locations.
Bridge width: 3.87 m ballast tub, 5.07 m incl. walkway
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Bridge spans: 7 or 11m concrete box girder, 15, 20 or 25m steel girder supported ballast deck or 92.3 m through-
truss
In general, bridge lengths were chosen by KOA to place the abutments outside of the 1:100 year high water mark. These
lengths were reduced in several case in a similar conditions noted in the road option. No further hydrology,
environmental, or geotechnical evaluations were made in this effort and any assumptions made are based on engineering
judgment and the available data. These changes and further modifications should be confirmed at later stages of the
work. It can be noted that some of the crossings have two or more options shown. In all cases, EBA has considered the
shortest bridge concept in the current evaluation.
Golder has carried out relatively detailed geotechnical and geophysical site investigations as well as determinations of
bathymetry at most of the major crossing locations. Golder has also prepared separate geotechnical reports with
foundation recommendations for 15 bridges. Table 5.5-1 summarizes the bridge structures identified along the alignment
and includes a summary of the number and length of spans as well the suggested foundation types determined by
Golder. The bridges, which have specific foundation recommendations, are identified in the table.
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Table 5.5-1: Railway Bridge Characteristics
No. River Start End
Length
(m) Spans
7 m
Frames
11 m
Spans
15 m
Spans
20 m
Spans
25 m
Spans
92.3 m
Truss Foundation Type
1000 1+213 1+397 184 17 1 16 piles
1700 15+100 15+202 102 4 4 piles
1800 Stinger Lake Inlet * 23+132 23+250 118 5 2 3 footings on rock
1850 23+850 24+016 166 9 1 8 piles
1900 31+710 32+082 372 35 3 32 piles
2000 38+102 38+179 77 7 7 piles
2100 Esnagimi * 46+152 46+218 66 3 2 1 footings on rock
2400 Little Current * 64+662 64+826 164 7 1 1 5 pipe piles
2650 73+360 73+512 151 8 1 7 piles
2700 Colpitts Creek * 80+706 80+778 72 4 3 1 rock socket pipe piles
2750 Little Colpitts Creek * 83+315 83+412 97 4 1 3 rock socket pipe piles
2850 Ogoki * 88+917 89+065 148 6 1 5 rock socket pipe piles
2950 92+678 92+890 212 20 2 18 piles
3050 North Ogoki * 98+714 98+919 205 8 8 footings on rock & piles
3100 101+401 101+530 129 12 1 11 piles
3200 105+263 105+435 172 16 1 15 piles
3250 106+310 106+614 303 16 2 14 piles
3300 108+462 108+562 100 9 9 piles
3350 109+875 109+941 66 6 6 piles
3400 112+156 112+468 312 29 2 27 piles
3450 114+136 114+329 193 10 1 9 piles
3550 119+763 120+339 576 54 5 49 Piles
3600 123+880 124+019 139 13 1 12 piles
3700 Dusey * 134+425 134+553 128 5 5 rock socket pipe piles
3850 139+867 140+137 279 26 2 24 piles
3950 Albany Tributary * 150+590 151+029 439 20 4 16 rock socket pipe piles
4050 Albany * 162+540 162+776 235 4 2 2 footings on rock
4150 170+311 170+344 33 3 3 piles
4200 173+309 173+402 93 6 6 piles
4250 Gourlie Creek * 178+484 178+649 181 7 1 6 rock socket pipe piles
4300 179+212 179+278 66 6 6 piles
4350 182+180 182+451 271 12 2 10 piles
4450 Wabassi * 197+568 197+780 212 9 1 8 rock socket pipe piles
4500 199+037 199+431 394 21 3 18 piles
4700 214+180 214+322 132 12 piles
4800 Attawapiskat * 247+300 247+628 328 5 1 1 3 large dia. pipe piles
4900 257+920 258+048 128 12 1 11 piles
4950 258+499 258+576 77 7 7 piles
5000 260+687 260+826 139 13 1 12 piles
5050 263+467 263+544 77 7 7 piles
5100 269+334 269+510 176 25 25 piles
5200 273+636 273+713 77 7 7 piles
5250 Fish Trap Lake Inlet * 278+868 279+190 322 14 2 12 rock socket pipe piles
5350 280+732 280+886 154 14 1 13 piles
5500 297+867 298+113 246 22 2 19 1 piles
5650 Muketei Tributary * 311+190 311+410 220 10 2 8 footings on rock
5800 325+812 326+080 271 12 2 10 piles
Totals 8803 569 70 331 12 63 100 5
* Bridge with geotechnical report
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The cursory evaluation of the topography along the railway has identified a requirement for an estimated 85 culverts. For
costing purposes, it was assumed that the culverts would be corrugated steel pipe (CSP) of 2.0 m or 1.5 m dia.
5.6. CAPITAL COST
The estimated costs include the direct cost of materials, construction materials, and construction labour. Indirect cost
includes site indirects and costs of engineering, procurement, and construction management. A contingency allowance is
included. Costs are in 2013 Canadian dollars. The estimated unit costs have been based on estimates previously
prepared for other resource railways located in remote northern locations. Freight costs have been included in the
individual items of work.
Engineering, procurement, and construction management (EPCM) services were estimated at 15% of total direct costs.
Indirects include things such as temporary construction facilities, warehouses, lay down areas and owner’s team office,
costs of vehicles for construction management staff and site security, surveying, quality assurance services, and various
other miscellaneous costs.
Owners costs as noted below are not included in the capital cost estimate:
Owner’s project team
Permit costs
Royalties
Land and/or water acquisition
Quarry restoration costs
Legal costs
Public relations
Force Majeure
Insurance
Taxes
Cost of consultants
Environmental studies, mitigation, and habitat compensations
A contingency for undefined items is intended to cover any change of scope items that could not be reasonably foreseen
at this point in time due to a lack of complete, accurate, and detailed information.
The estimated capital costs include the costs of the 330.2 km long railway embankment, track, 20 sidings and
embankment, and 6 km track complete with switches etc. for train turn-around and loading at the mine site. Capital costs
do not include materials handling/loading equipment at the mine site or railway equipment such as locomotives, hopper
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Page 35 of 53
cars, or other rail cars, as these costs have been included in the annualized operating expense. It is understood that the
owner anticipates contracting the haul to either the mainline operator or to a smaller short line operator. CCC could also
operate the system with its own forces, which has the potential to further reduce operations costs.
During the review of these costs, no effort was made to estimate total transportation costs from mine to market, as market
locations vary significantly depending on product. These market locations also impact the size and type of the rail car
fleet due to the need to continue to transfer material from the mine while loaded cars are in transit to/from the final
destination. As such, no cost allocation for car sets was made in the rail operations cost. This is a valid assumption for
this effort, as the purpose is to derive a comparison between the two operating modes and the road operation would rely
on nearly identical car fleet to move materials from Exton to market after transloading. As a result, the incremental haul
equipment required for rail is limited to locomotives needed to cycle unit trains from the mine site to the CN interchange.
The estimated capital costs based on the above noted assumptions and material quantities determined in the evaluation
are presented in .
Sunday
Table
Sunday
Table
Sunday, February 10,
Table 5.6
, February 10,
5.6-1
, February 10,
1: Estimated Railway Capital Costs
, February 10,
Estimated Railway Capital Costs
, February 10, 2013
Estimated Railway Capital Costs
2013
Estimated Railway Capital CostsEstimated Railway Capital CostsEstimated Railway Capital CostsEstimated Railway Capital Costs
CORPORATION RAIL v/sROAD TRADEOFF STUDY
Estimated Railway Capital Costs
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Estimated Railway Capital Costs
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Estimated Railway Capital Costs
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Estimated Railway Capital Costs
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDYCORPORATION RAIL v/sROAD TRADEOFF STUDYCORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
Project Number:
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Project Number:
Project Name:
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Study for
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Study for
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5.7. OPERATING COST
The operating cost for rail will follow the same philosophy and guideline as the road operating cost by focusing
on major cost components.
The major elements of the operational costs for this study were determined as follows:
Cost of locomotives
Fuel cost
Maintenance cost
Crew cost
Indirect and Overhead
Profit
The number of cars per train was primarily based on the baseline load of 3MTPA. Each car/wagon was assumed
to carry 100 tonnes, and a 100 car/wagon train was considered as baseline for this effort. Detail logistical
exercise of travel time, driver behaviour, wagon/car capacity, car/wagon and other signal/track optimization
parameters are considered out of scope at this level, and further operating cost reductions may be achieved in
these efforts. Changes in annual capacity requirements can be readily adjusted with planned equipment by
increasing or decreasing the train length, or modifying the cycle spacing of the equipment on the line.
Based on a high level effort, the operational costs are summarized as follows:
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Table 5.7-1: Operating Cost for Rail Corridor (3 MTPA)
The rail Opex cost was at $31.6M with maintenance at 30%, crew at 28%, and fuel at 18% of the overall annual
Opex cost.
The above analysis and results are subject to short and long term market conditions for labour and spot fuel
prices including negotiated contracts.
6. ROAD – RAIL COST COMPARISON AND ECONOMIC ANALYSIS
In the remaining portion of this document, the terms: transportation capacity, transport load, load, tonnage or ore
generally refers to the material or cargo carried by the rail or road and is used interchangeably in the document.
The term “cost” is generally referred to cost of doing business or expense that will be incurred by CCC. It is also
the price to be charged to customers for transporting the load or cargo. It will also be referred as the breakeven
cost for CCC to have a successful financial venture. The term, “Terms of Finance” will be the duration of the loan
in years and the interest rate charged for the loan used in supporting capital and operating expenses.
To analyze the cost benefits of either modes of transportation, the Capex and Opex costs were subjected to
variables of transport capacity/load and varying terms of finance.
The baseline load was set at 3.0 MTPA (Million Tonne Per Annum) and three terms of finance were considered
with 30 year term at 4% as the baseline rate.
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The cost of doing business or break even cost for this study was calculated and defined as the difference in the
capital cost of rail and road (fixed for all variables) plus the annual operating cost. A profit margin of 15% was
applied to this sum to obtain the resulting cost of doing business or total cost incurred.
No sharing of initial development costs with government was considered in the analysis, but would further
improve the economics of the initial construction and long-term annual costs basis associated with repaying
capital. Such a scenario is not unreasonable, or unlikely, considering the multiple benefits provided to the
regional communities and broad-scale economic impact.
For this study, the transportation costs were considered separate from the mine and processing operations,
material market prices, and final destination shipping costs. This is appropriate for the comparison study given
that if the transportation cost were part of the total operational cost, a profit would be applied to the total cost to
determine the cost of doing business, there by having no impact on the resulting conclusions.
The price to be charged per tonne to cover the cost of doing business was obtained by dividing the total annual
cost or cost of doing business (Difference in capital cost + annual operating cost + profit) divided by the transport
load or tonnage carried by the corridor.
Variance in inflation and market condition factors were not applied to the analysis.
6.1. TRANSPORT CAPACITY (LOAD) SENSITIVITY FOR ROAD OPERATIONS
The total operating costs for rail and road were stress tested for load variations of 5.0 MTPA (66% increase),
and 1.5MTPA (50% decrease).
The figures below illustrate the change in annual operating cost and price to be charged to customers to cover
the cost of doing business.
The results of these variations have been illustrated in the following:
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Figure 6.1: Sensitivity Analysis – Road Opex and Cost per Tonne
When the load or transportation capacity increased by 66%, the operating cost for road increased by 62%
($183M to $296M) and the price per tonne decreased by only 2.5% ($61 to $59)
The figure above illustrates that as the load decreased by 50%, the operating cost for road decreased by 47%
($183M to $97M) while the price per tonne increased by 6% ($61 to $65)
6.2. TRANSPORT CAPACITY (LOAD) SENSITIVITY FOR RAIL OPERATIONS
The load variations of 5.0 MTPA, an increase of 66% and 1.5MTPA, a 50% decrease were applied to the
operating cost of rail. The figure below illustrates the change in annual operating cost and resulting price.
$183.18
$296.40
$96.70
$60.78 $59.28 $64.61
$0
$50
$100
$150
$200
$250
$300
$350
3.0 5.0 1.5
TRANSPORTED LOAD (MILLION TONNES)
SENSITIVITY ANALYSIS FOR ROAD OPERATIONS
ANNUAL OPERATING COST (Million $)
COST PER TONNE ($)
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Figure 6.2: Sensitivity Analysis – Rail Opex and Cost per Tonne
When the load or transportation capacity increased 66%, the operating cost increased by remained relatively
unchanged at $32M but the cost per tonne decreased by 40% ($10 to $6)
The figure above illustrates that as the load decreased by 50%, the operating cost for rail decreased by 21%
($32M to $25M) while the cost per tonne increased by 60% ($10 to $17)
6.3. SENSITIVITY ANALYSIS FOR TERMS OF FINANCE FOR TRANSPORT CAPACITY (LOAD)
VARIATION
Both the transportation modes and their costs were analyzed for the three terms of finance under different load
conditions. The 30 year term at 4% was considered as the baseline term of finance for comparing the variations.
The following figures show the results of effects of terms of finance and varying load on cost of doing business.
$31.65 $31.65
$25.14
$10.50
$6.33
$16.80
$0
$5
$10
$15
$20
$25
$30
$35
3.0 5.0 1.5
TRANSPORTED LOAD (MILLION TONNES)
SENSITIIVITY ANALYSIS FOR RAIL OPERATIONS
ANNUAL OPERATING COST(Million $)
COST PER TONNE ($)
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Figure 6.3: Cost for 30 Year Term (4% Rate)
For the baseline scenario of a 30 year at 4%of finance the following resulted:
A 66% increase in load led to 13% decreases ($84 to $73) in cost per tonne for road and a 40% decrease ($45
to $27) in cost per tonne for rail.
A 50 % decrease in load led to 32% increases ($84 to $111) in cost per tonne for road while the rail cost per
tonne increased 92% ($45 to $86).
$44.62
$26.89
$85.50$83.77
$73.14
$110.91
$-
$20
$40
$60
$80
$100
$120
3 5 1.5
CO
STP
ERTO
NN
E
TRANSPORTED LOAD (MILLION TONNE)
COST FOR 30 YEAR TERM (4% RATE)
RAIL
ROAD
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Figure 6.4: Cost for 50 Year Term (5% Rate)
For a 50year – 5% term of finance the following resulted:
A 66% increase in load led to 13% decreases ($83 to $72) in cost per tonne for road and a 40% decrease ($43
to $26) in cost per tonne for rail.
A 50 % decrease in load led to 32% increases ($83 to $109) in cost per tonne for road while the rail cost per
tonne increased by 92% ($43 to $82).
$42.96
$25.89
$82.15$82.65
$72.46
$108.66
$-
$20
$40
$60
$80
$100
$120
3 5 1.5
CO
STSP
ERTO
NN
E
TRANSPORTED LOAD (MILLIONS TONNE)
COST FOR 50 YEAR TERM (5% RATE)
RAIL
ROAD
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Figure 6.5: Cost for 10 Year Term (2.5% Rate)
For a 10 year-2.5% term of finance the following resulted:
A 66% increase in load led to 18% decreases ($106 to $87) in cost per tonne for road and a 40% decrease ($78
to $47) in cost per tonne for rail.
A 50 % decrease in load led to 47% increases ($106 to $156) in cost per tonne for the road while the rail cost
per tonne increased by 95% ($78 to $152).
The above results are further summarized in the table below illustrating the net savings in dollars for the various
loads under different terms of finance.
$77.87
$46.94
$152.46
$106.18
$86.64
$156.04
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
3 5 1.5
CO
STP
ERTO
NN
E
TRANSPORTED LOAD (MILLION TONNE)
COST FOR 10 YEAR TERM (2.5% RATE)
RAIL
ROAD
TableTable 6.3
The above table illustrates the following:
For
A load
68% decr
For a 50 year note at 5.0%
A l
67
For a 10 year note at 2.5%
A load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
6.3-1
The above table illustrates the following:
For the baseline term of finance for
load
68% decr
For a 50 year note at 5.0%
load increase of 66% led to
67% decrease
For a 10 year note at 2.5%
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
1: Ann
The above table illustrates the following:
the baseline term of finance for
load increase of 66% led to 97% increase in savings ($117M to $231M)
68% decrease in savings ($117M to $38M).
For a 50 year note at 5.0%
oad increase of 66% led to
% decrease
For a 10 year note at 2.5%
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
Annualized Cost for
The above table illustrates the following:
the baseline term of finance for
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
For a 50 year note at 5.0%
oad increase of 66% led to
% decrease
For a 10 year note at 2.5%
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
ualized Cost for
The above table illustrates the following:
the baseline term of finance for
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
For a 50 year note at 5.0%
oad increase of 66% led to
% decrease in savings ($119M to $39M)
For a 10 year note at 2.5%
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
ualized Cost for
The above table illustrates the following:
the baseline term of finance for
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
For a 50 year note at 5.0%
oad increase of 66% led to
in savings ($119M to $39M)
For a 10 year note at 2.5%
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
ualized Cost for
The above table illustrates the following:
the baseline term of finance for
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
For a 50 year note at 5.0%
oad increase of 66% led to
in savings ($119M to $39M)
For a 10 year note at 2.5%
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
ualized Cost for
The above table illustrates the following:
the baseline term of finance for
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
For a 50 year note at 5.0%:
oad increase of 66% led to
in savings ($119M to $39M)
For a 10 year note at 2.5%:
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
ualized Cost for V
The above table illustrates the following:
the baseline term of finance for
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
oad increase of 66% led to
in savings ($119M to $39M)
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
CORPORATION RAIL v/sROAD TRADEOFF STUDY
Various
The above table illustrates the following:
the baseline term of finance for
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
oad increase of 66% led to 95% increase in savings ($119 to $232M)
in savings ($119M to $39M)
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M)
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
arious
The above table illustrates the following:
the baseline term of finance for 30 year note at 4.0%
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
% increase in savings ($119 to $232M)
in savings ($119M to $39M)
load increase of 66% led to 133% increase in savings ($
decrease in savings ($85M to $5M).
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
arious Term
The above table illustrates the following:
30 year note at 4.0%
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
% increase in savings ($119 to $232M)
in savings ($119M to $39M)
load increase of 66% led to 133% increase in savings ($
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
erms of Finance
30 year note at 4.0%
increase of 66% led to 97% increase in savings ($117M to $231M)
ease in savings ($117M to $38M).
% increase in savings ($119 to $232M)
in savings ($119M to $39M).
load increase of 66% led to 133% increase in savings ($
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
s of Finance
30 year note at 4.0%
increase of 66% led to 97% increase in savings ($117M to $231M)
% increase in savings ($119 to $232M)
load increase of 66% led to 133% increase in savings ($
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
s of Finance
30 year note at 4.0%
increase of 66% led to 97% increase in savings ($117M to $231M)
% increase in savings ($119 to $232M)
load increase of 66% led to 133% increase in savings ($
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
s of Finance
30 year note at 4.0%
increase of 66% led to 97% increase in savings ($117M to $231M)
% increase in savings ($119 to $232M)
load increase of 66% led to 133% increase in savings ($
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
s of Finance
30 year note at 4.0%:
increase of 66% led to 97% increase in savings ($117M to $231M)
% increase in savings ($119 to $232M)
load increase of 66% led to 133% increase in savings ($85 to $198)
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
increase of 66% led to 97% increase in savings ($117M to $231M)
% increase in savings ($119 to $232M)
85 to $198)
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
increase of 66% led to 97% increase in savings ($117M to $231M)
% increase in savings ($119 to $232M)
85 to $198)
CORPORATION RAIL v/sROAD TRADEOFF STUDY
increase of 66% led to 97% increase in savings ($117M to $231M)
% increase in savings ($119 to $232M)
85 to $198)
Project Number:
705
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Rail vs Road Tradeoff
McFauld's Lake, ON
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increase of 66% led to 97% increase in savings ($117M to $231M)
% increase in savings ($119 to $232M)
85 to $198) while a
Project Number:
705-
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
increase of 66% led to 97% increase in savings ($117M to $231M) while a
% increase in savings ($119 to $232M) while a
while a
Project Number:
-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
while a
while a
while a load decrease of
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
while a load decrease of
while a load decrease of
load decrease of
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
oad decrease of
load decrease of
load decrease of
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
oad decrease of
load decrease of
load decrease of
Project Number:
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
oad decrease of
load decrease of
load decrease of
Project Number:
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
Infrastructure Corridor
Page
oad decrease of
load decrease of
load decrease of 50%
Project Number:
Project Name:
Canada Chrome Corporation
Study for
Page
oad decrease of 50%
load decrease of 50%
50% led to 95%
Project Number:
Project Name:
Canada Chrome Corporation
Study for
Page 45
50%
50%
led to 95%
Project Number:
45 of
50% led to
led to
led to 95%
Project Number:
of 53
led to
led to
led to 95%
Project Number:
Table
The impact of changes
be
ble 6.3
The above table illustrates that:
For the baseline load of 3.
same for a 50
For a 66% increase
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
For a
to $27
The effect
The impact of changes
be tabulated
6.3-2
The above table illustrates that:
For the baseline load of 3.
same for a 50
For a 66% increase
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
For a 50%
to $27
The effect
The impact of changes
tabulated
2: Difference in Cost for Varying Loads and Terms of Finance
The above table illustrates that:
For the baseline load of 3.
same for a 50
For a 66% increase
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
50%
to $27 (8% increase) f
The effect
The impact of changes
tabulated to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
The above table illustrates that:
For the baseline load of 3.
same for a 50
For a 66% increase
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
50% decrease
% increase) f
The effect of variables on the transportation cost
The impact of changes
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
The above table illustrates that:
For the baseline load of 3.
same for a 50 year
For a 66% increase
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
decrease
% increase) f
variables on the transportation cost
The impact of changes
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
The above table illustrates that:
For the baseline load of 3.
year term at
For a 66% increase
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
decrease
% increase) f
variables on the transportation cost
The impact of changes in loads
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
The above table illustrates that:
For the baseline load of 3.
term at
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
decrease in load to 1.50
% increase) for a
variables on the transportation cost
in loads
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
The above table illustrates that:
For the baseline load of 3.0
term at 5.0% but decreases to $
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
in load to 1.50
or a 50
variables on the transportation cost
in loads
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
The above table illustrates that:
0 MTPA
5.0% but decreases to $
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
in load to 1.50
50 year
variables on the transportation cost
CORPORATION RAIL v/sROAD TRADEOFF STUDY
in loads on the total cost
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
The above table illustrates that:
MTPA
5.0% but decreases to $
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
in load to 1.50
year
variables on the transportation cost
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
on the total cost
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
MTPA the differential in
5.0% but decreases to $
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
in load to 1.50 MTPA
term at
variables on the transportation cost
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
on the total cost
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
the differential in
5.0% but decreases to $
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
MTPA
term at
variables on the transportation cost
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
on the total cost
to reflect the difference in cost per
Difference in Cost for Varying Loads and Terms of Finance
the differential in
5.0% but decreases to $
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
MTPA, the differential in cost per
term at 5.0%
variables on the transportation cost
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
on the total cost for various terms of
to reflect the difference in cost per tonne
Difference in Cost for Varying Loads and Terms of Finance
the differential in
5.0% but decreases to $
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
the differential in cost per
5.0% but decreases to $
variables on the transportation cost
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
for various terms of
tonne
Difference in Cost for Varying Loads and Terms of Finance
the differential in
5.0% but decreases to $28 (
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
the differential in cost per
but decreases to $
variables on the transportation cost can also be
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
for various terms of
tonne .The results are tabulated
Difference in Cost for Varying Loads and Terms of Finance
the differential in cost per
28 (30
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
the differential in cost per
but decreases to $
can also be
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
for various terms of
.The results are tabulated
Difference in Cost for Varying Loads and Terms of Finance
cost per
30%
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
the differential in cost per
but decreases to $
can also be
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
for various terms of
.The results are tabulated
Difference in Cost for Varying Loads and Terms of Finance
cost per
% dec
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
the differential in cost per
but decreases to $
can also be illustrate
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
for various terms of
.The results are tabulated
Difference in Cost for Varying Loads and Terms of Finance
cost per tonne
crease
in load to 5.0 MTPA, the differential in cost per
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
the differential in cost per
but decreases to $4
llustrate
CORPORATION RAIL v/sROAD TRADEOFF STUDY
for various terms of shown in Figures
.The results are tabulated
Difference in Cost for Varying Loads and Terms of Finance
tonne
rease) for a 10 year
in load to 5.0 MTPA, the differential in cost per tonne
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
the differential in cost per tonne
4 (84
llustrated as shown in
Project Number:
705
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
shown in Figures
.The results are tabulated
Difference in Cost for Varying Loads and Terms of Finance
can vary
) for a 10 year
tonne
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
tonne
84% decrease) for a
d as shown in
Project Number:
705-
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
shown in Figures
.The results are tabulated
can vary
) for a 10 year
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
tonne can vary from $
% decrease) for a
d as shown in
Project Number:
-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
shown in Figures
.The results are tabulated as follows:
can vary from
) for a 10 year
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
can vary from $
% decrease) for a
d as shown in
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
shown in Figures
as follows:
from
) for a 10 year term at
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
can vary from $
% decrease) for a
d as shown in figure
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
shown in Figures 5.3
as follows:
from $40
term at
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
can vary from $
% decrease) for a
figure
Project Number:
1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
5.3, 5.4
as follows:
40 to $
term at
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
can vary from $25
% decrease) for a 10 year
figure below:
Project Number:
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff
McFauld's Lake, ON
Infrastructure Corridor
, 5.4 to 5.4 can be
to $28. It remains the
term at 2.5%.
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
25 to $
10 year
below:
Project Number:
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
Infrastructure Corridor
Page
to 5.4 can be
28. It remains the
2.5%.
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
to $4
10 year
below:
Project Number:
Project Name:
Canada Chrome Corporation
Study for
Page
to 5.4 can be
28. It remains the
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
4. It
term at
Project Number:
Project Name:
Canada Chrome Corporation
Study for
Page 46
to 5.4 can be
28. It remains the
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
increases
term at
Project Number:
46 of
to 5.4 can be also
28. It remains the
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
increases
term at 2.5%.
Project Number:
of 53
also
28. It remains the
can vary from $46 to $40. It increases
to $47 (2% increase) for 50 year term at 5.0% but decreases to $40 (13% decrease) for a 10 year term at 2.5%.
increases
2.5%.
Project Number:
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 47 of 53
Figure 6.6: Transportation Cost per Tonne
The data on the differential in capital cost ($508,936,628) and differential in savings in operational cost of the two
modes of transportation was plotted against time for the three terms of finance. The graphs were plotted for each
load scenario (3.0, 1.5 and 5.0 MTPA)
$45
$43
$78
$84
$83
$106
$27
$26
$47
$73
$72
$87
$86
$82
$152
$111
$109
$156
$0 $25 $50 $75 $100 $125 $150 $175
30 YEARS @ 4.0%
50 YEARS @ 5.0%
10 YEARS @ 2.5%
TRANSPORTATION COST PER TONNE
RAIL-3 MTPA
ROAD-3 MTPA
RAIL-5 MTPA
ROAD- 5 MTPA
RAIL-1.5 MTPA
ROAD-1.5 MTPA
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 48 of 53
This yielded the year in which the cost savings would recover the difference in the capital cost for each load
case.
The difference in the capital cost was assumed to increase at 4% to account for return on equivalent investment
and adequately reflect the cost of capital or loss of opportunity.
For the base case scenario of 3.0 MTPA load, the savings in cost for a 30 year term at 4.0% and 50 year term at
5.0% will break even with the excess capital cost around the 6th year of operations. For the10 year at 2.5%, the
savings will catch up with the excess capital cost between the 9th and 10th year of operation. The results are
shown graphically in the Figure below.
Figure 6.7: CAPEX Cost Difference v/s Breakeven Difference for 3 MTPA
For 5.0 MTPA (66% increase) load, the savings in cost for a 30 year term at 4.0% and 50 year term at 5.0% will
breakeven with the excess capital cost between 3rd and 4th year of operations. For the 10 year term at 2.5%,
the savings catch up with the excess capital cost around the 4th year of operations. The results are shown
graphically in the Figure below.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 49 of 53
Figure 6.8: CAPEX Cost Difference v/s Breakeven Difference for 5 MTPA
The graph for 1.5 MTPA (-50% decrease) has not been plotted as the lower savings in operational cost
difference never catch up to the difference in capital cost.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 50 of 53
7. OBSERVATIONS AND ANALYSIS
Based on the project background, corridor constraints, geotechnical review, basis of design, capital cost, operating
cost, sensitivity analysis and stress testing to loads and terms of finance, the following observations and conclusions
are presented:
1. Significant amount of rock and NFS material will be required for both modes of transportation.
2. Critical rock aggregate is a key and fundamental component of the road and rail cross section.
3. Aggregate sources are available at the very north and south end of the corridor. Significant stretch of the
corridor in the middle has scarcity of critical rock (Sta 100 +00 to Sta 270+00)
4. Extensive preliminary quantity analysis has conclusively shown that there is an shortage of critical rock
aggregate and the cut sections along both corridors do not suffice the needs of the corridor cross sections
for either modes of transportation.
5. There is a consistent rock deficit along the upper stretch of the corridor (Sta 100+00 to Sta 330+00) in spite
of few rock sources at the north end.
6. Rock is sparingly available along the corridor and will have to be hauled from other sources.
7. The Material Availability Assessment Report has also quantitatively illustrated that the initial development of
a permanent road will significantly impact the viability of a rail corridor and vice versa due to the depletion of
scarce rock aggregate thereby increasing the burden of importing of rock aggregate.
8. Hauling cost of material will be a significant component of the capital cost for both modes of transportation.
9. Rail infrastructure can be used to economically provide future road construction materials from outside
sources.
10. Permanent road infrastructure would provide limited advantage to a future rail embankment due to the high
costs of trucking suitable construction materials.
11. Long span bridges are on the critical path of the project and construction has to begin as early as possible.
12. Multiple crews may be required to complete the bridges in a reasonable amount of time and schedule. It is
highly recommended that crews work separately and concurrently on major and minor span bridges.
13. A limited, temporary service/access road will be required to transport the construction material and
especially material for bridges. This service road construction expense is a significant component of the
capital cost.
14. The capital costs for rail are higher than capital cost for road by 50%.
15. The operating cost for road are higher than the rail cost by a factor of 5.79 or 479%.
16. Trucks and personnel form a significant factor of the operating cost for road. The road operating cost has
fuel cost as its major component. This component is highly susceptible to inflationary and market conditions.
17. The road is designed to TAC and provincial standards which usually encounter less percentage of truck
traffic than projected for this corridor.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 51 of 53
18. Maintenance component of the road could become significant factor with increasing truck and load traffic.
19. An acute shortage of aggregate required for the continual maintenance of the road under constant traffic will
continue to persist along the corridor. In other words, asset depreciation for a road corridor will be
dramatically faster than a rail corridor for increased traffic if not maintained adequately.
20. The road operating costs are more sensitive to variation in loads than rail and show dramatic increase in
cost with increasing loads.
21. The total annual rail operating costs plateau with increase in load.
22. As the load increases there is substantial savings in cost per tonne for the rail operations.
23. The road operation does not show significant savings with increasing traffic volume.
24. The trend in savings is similar for road and rail for all terms of finances.
25. The savings are greatly reduced for all terms of finance for reduced load.
26. Both the modes of transportation become economically unattractive for loads under 1.5 MTPA unless
materials of higher value are shipped. Market value of these high value material could be expected to cover
the higher transportation cost related to low volumes.
27. The terms of finance have less impact on the cost per tonne as the load increases for both modes of
transportation.
28. The total annual cost including finance costs on capital and operations/maintenance for rail quickly
overcome the difference in initial capital costs.
29. The time frame to recover the differential in capital cost between rail and road decreases as the load
increases for reasonable finance terms.
30. Rail offers higher reliability and more working days per year than a truck transportation system.
31. Rail transportation has a higher flexibility to adapt to increasing or decreasing transportation loads. It is
much more expedient to double the size of wagon or cars than to increase the number of trucks at a short
notice.
32. Rail transportation mode could be a primer for development of local truck routes to prospective mining sites,
resources and communities. Truck corridor may not foster the development of a rail corridor. In other words,
a rail corridor may be complementary to a road corridor but not vice versa.
33. The rail corridor remains a versatile and scalable mode of transportation for a wide range of material and
goods ranging from ore to machinery parts and mining equipment. Similar heavy bulk commodities, large
volumes and large haul cargoes would require special truck-axle configuration and the pavement may not
be able to handle the stresses generated by heavy loads leading to deterioration and closure of the corridor
outside of winter months.
34. Road transportation is more flexible than rail and is suitable to carry perishable, fragile, time sensitive cargo.
It is more suitable for more frequent, smaller, non-linear, shorter haul deliveries.
35. Rail transportation offers a higher level of safety, lower accidents and higher hazard protection in this region
compared to the truck traffic.
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 52 of 53
8. FINAL CONCLUSIONS
The project location and terrain remain the biggest and obvious challenge to the project development. Project
logistics and production rates in this remote area add significant cost to the program budget relative to the total
development expense. Geotechnical investigations conducted so far show that there are some sources of
aggregate available to the far south, and far north of the project. There is a deficit of good material through the
majority of the corridor. Material for any mode of transportation will have to be imported or hauled in from far
distances at a cost. Building a road corridor will adversely impact the development of the rail corridor by
depleting the available and critical rock aggregate.
The key component for construction of both modes of transportation remains acceptable quality of aggregate
and NFS material. Its needs get more acute if a road is built, since good quality of aggregate will be required to
maintain the road and reduce the wear and tear on truck tires and improve efficiency of trucking operations. It is
clear from this analysis that significantly more rock will be required to maintain the heavy truck traffic and meet
the increase in road cross sectional rock requirements further impacting the prospects of a rail corridor.
Completion of long span bridges is a critical component of the project schedule and will require airlifts and
service roads to access construction sites and deliver material. Construction of service road to convey the
materials for these bridge sites is very important and significant component of the Capex.
Rail capital cost is higher than the road by approximately $500M, however this mode of transportation reacts
favorably to higher loads, longer and reasonable terms of finance. The amount of time required to recover the
additional capital cost of rail over road reduces dramatically if the load increases along the corridor, hence
remaining a favorable option within term of the described resource extraction period and the life of the
infrastructure beyond initial mine development. Both modes of transportation are not favorable initiatives if
production or load remains low and terms of finance are for shorter periods as the associated annual costs to
support the financing and operation would likely impact the ability to sell material into the market at reasonable
prices.
The road capital cost are lower than the rail at approximately $1,051M, however the annual operating cost
increase significantly as the load increases, implying that this mode of transportation is not a suitable option if
the Ring of Fire region is expected to produce higher loads or operate over a long period of time and support
other growth in the area if mining activity expands. Under the same circumstances, rail economics improve
through flexible use of train operations with decreases in per tonne costs.
The described chromite and copper/nickel deposits, as well the extent of other exploration activities in the area,
suggest that such grow is likely to occur over time if economically efficient surface access and support can be
CANADA CHROMECORPORATION RAIL v/sROAD TRADEOFF STUDY
Project Number:
705-1298820100
Project Name:
Canada Chrome Corporation
Rail vs Road Tradeoff Study for
McFauld's Lake, ON
Infrastructure Corridor
Page 53 of 53
provided. Service support could provide supplies and transportation to regional communities over time, further
utilizing planned access corridors. These factors indicate that both infrastructure options should consider the
possibility of cost sharing mechanisms with public funding sources, as well as future resource development
proponents.
Simple calculations demonstrate that an initial public or third-party capital contribution of $500M towards both
options significantly improves annual debt service payments, with a higher percentage reduction realized in the
road. However, since the road unit costs per tonne are dominated by operating factors that do not appreciably
change with volume, there is a lower return per dollar invested in capital compared with rail. For example, under
the base scenario with $500M in funding, road unit costs per tonne decrease from approximately $84 to
$73/tonne, a reduction of about 13%. The same contribution to rail infrastructure realizes a decrease from $45
to $27/tonne, a reduction of about 40% for the same conditions. Such savings are potentially very significant in
the long-term stability of the operations of any associated with the infrastructure as their costs are directly added
to mining, processing, and delivery to market.
The observations of this analysis indicate that the lower medium and long-term costs associated with developing
rail, favor the economically sustainable development of the overall resources in the Ring of Fire, as this option
provides the opportunity to improve project economics during fluctuations in commodity prices over the life of the
resource operations and allow more stable/consistent returns on the private and possible public investment,
provided the infrastructure financing can be amortized beyond 10-yrs, which is common for infrastructure of this
type and scale.
To this end, we suggest a further advancement of the work to refine and further improve the definition and
details of the project. Additional factors and design elements will be identified as the design and study process
dwells into the intricacies and implementation of the corridor.
The costs and estimates presented above will vary as further information is gathered, but the overall impact and
final conclusions are not expected to change.
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