The Prospector News

Discovery Silver Reports Preliminary Economic Assessment on Cordero with After-Tax NPV of US$1.2 B, IRR of 38% and Payback of 2.0 Years

You have opened a direct link to the current edition PDF

Open PDF Close
Uncategorized

Share this news article

Discovery Silver Reports Preliminary Economic Assessment on Cordero with After-Tax NPV of US$1.2 B, IRR of 38% and Payback of 2.0 Years

 

 

 

 

 

Discovery Silver Corp. (TSX-V: DSV) (OTCQX: DSVSF) is pleased to announce results from its Preliminary Economic Assessment on its 100%-owned Cordero silver project located in Chihuahua State, Mexico.

 

Study highlights include (all figures are in USD unless otherwise noted):

  • Excellent project economics: Base Case after-tax NPV5% of $1.2 B (C$1.5 B) and IRR of 38% (Ag – $22.00/oz, Au – $1,600/oz, Pb – $1.00/lb and Zn – $1.20/lb).
  • Exceptional silver price leverage: Upside Case after-tax NPV5% of $1.9 B (C$2.4 B) and IRR of 55% (Ag – $27.50/oz, Au – $1,880/oz, Pb – $1.10/lb and Zn – $1.45/lb based on one-year trailing 90th percentile prices).
  • Large-scale, high-margin, long mine life asset: 16-year mine life with average annual production of 26 Moz AgEq at an AISC of $12.35/oz AgEq.
  • Low capital intensity: initial development capex of $368 M; attractive NPV-to-capex ratio of 3.2x.
  • Rapid payback: post-tax payback of 2.0 years for Base Case and 1.4 years for Upside Case.
  • Technically robust study: 99% of tonnes processed in the PEA mine plan are in the Measured & Indicated category; process design and metallurgical recovery estimates are based on the Company’s comprehensive 2021 metallurgical testwork program.
  • Silver-dominant revenues: silver represents +60% of the net smelter return in the first five years of the mine life and +50% of the net smelter return over the life of mine, in-line with the senior/mid-tier silver producer group.

 

Taj Singh, President and CEO, states: “With annual AgEq production averaging more than 26 Moz over a +15-year mine life we believe this PEA clearly positions Cordero as a Tier 1 silver asset. This impressive scale of production is achieved through modest development capex of $368 M and returns excellent margins with AISC averaging less than $12.50/AgEq oz over the life of the mine. These costs highlight the benefits of existing local infrastructure, excellent metallurgy, and a straight-forward open pit mine with excellent grades and a low strip ratio.

 

“Importantly, the outstanding metrics demonstrated in the PEA are supported by a mine plan with more than 99% of tonnes in the Measured and Indicated category, and a simple and conventional process design based on our detailed metallurgical testwork program completed earlier this year. This provides us with a huge head start as we look ahead to the delivery of a Prefeasibility Study on Cordero in 2022.”

 

PEA SUMMARY:

 

Study support:

  • The Study is based on the updated Mineral Resource Estimate (“Resource”) press released on October 20, 2021 (see Appendices for Resource details), and the Company’s comprehensive metallurgical testwork program described in our press release dated September 7, 2021.
  • The PEA project team was led by Ausenco Engineering Canada Inc. an industry leader in cost-effective design and construction. Ausenco was supported by AGP Mining Consultants Inc. and Knight Piésold and Co. (USA)

 

Project Economics:

 

Sensitivity of the Project’s expected after-tax NPV, IRR and payback at different commodity price assumptions is outlined in the table below:

 

  Units Base Case Upside Case Base Case +15% Base Case -15%
After-Tax NPV (5% discount rate) (US$ M) $1,160   $1,889   $1,692   $622  
Internal Rate of Return (%)   38.2 %   54.6 %   49.9 %   25.2 %
Payback (yrs)   2.0     1.4     1.6     3.5  

 

  • Base Case price assumptions: Ag = $22.00/oz, Au = $1,600/oz, Pb = $1.00/lb, Zn = $1.20/lb
  • Upside Case price assumptions: Ag = $27.50/oz, Au = $1,880/oz, Pb = $1.10/lb, Zn = $1.45/lb based on one-year trailing 90th percentile prices

 

After-Tax Free Cash Flow:

 

A chart summarizing the expected annual and cumulative after-tax free cash flow over the life-of-mine is provided below:

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/d1131062-ffa4-4091-b528-d23ac46806b3

 

Production & Costs:

 

Annual production over the LOM is expected to average 26 Moz AgEq with production averaging over 33 Moz AgEq when fully ramped up (Years 5 – 12); this positions Cordero as one of the largest silver mines globally.

 

  Units Year 1 – 4 Year 5 – 12 Year 13 -16 LOM
AgEq Produced – Average (Moz) 29 33 9 26
AgEq Payable – Average (Moz) 26 29 8 23
AgEq Produced – Total (Moz) 117 265 37 426
AgEq Payable – Total (Moz) 104 230 32 372
All-In Sustaining Cost (AISC) (US$/AgEq oz) $11.64 $11.77 $18.88 $12.35

 

Note – LOM production/payable totals include production from Year -1. AgEq Produced is metal recovered in doré/concentrate. AgEq Payable is metal payable from doré/concentrate and incorporates metal payment terms outlined in the Concentrate Terms section below. See Technical Disclosure section for AgEq and AISC calculation methodology.

 

LOM Production & AISC:

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/dc1da013-9e05-4a0a-a7af-78b58ef8af4a

 

Note – Au/Pb/Zn production is shown on an AgEq basis based on: Ag = $22/oz, Au = $1,600/oz, Pb = $1.00/lb and Zn = $1.20/lb

 

OPERATIONS:

 

Mining:

 

The mine plan incorporates accelerated stripping as well as stockpiling of low-grade material in order to optimize the grade profile over the LOM.

  • The mine plan was completed by AGP and is based on a detailed mine design that incorporates mining dilution, safety berms and haul roads.
  • Mining rates over the life of the mine are relatively steady at 60 to 70 Mtpa.
  • The ultimate pit contains 719 Mt in total consisting of 228 Mt of mill feed and 491 Mt of waste for an average strip ratio of 2.2:1. The strip ratio is relatively even over the LOM.
  • Pit slope designs were based on an assessment by Knight Piésold that was supported by two geotechnical coreholes in the North Corridor and logging of core from two exploration coreholes in the South Corridor.

 

Processing:

 

Processing was broken into two phases to optimize the capital efficiency of the project.

  • Phase 1 throughput (Year -1 to Year 4)
    • Oxides: mined during the preproduction period and are crushed through the Phase 1 crushing plant and stacked on the heap leach from Year -1 to Year 3 at a throughput rate of 5 Mtpa. After Year 3 the Phase 1 crushing plant is dedicated to processing higher-value sulphide material with remaining oxide material processed as uncrushed ‘run-of-mine’ (“ROM”) material via heap leaching.
    • Sulphides: crushing, grinding and flotation circuit is constructed in Year -1 and processing occurs at a nameplate rate of 7.2 Mtpa from Year 1 to Year 4. During this period the mine plan focuses on high-grade material from the Pozo de Plata zone.
  • Phase 2 throughput (Year 5+)
    • Sulphides: two identical crushing, grinding and flotation circuits from Y5 onwards with total throughput of 14.4 Mtpa

 

Annual Throughput (Mt/a) PHASE 1 PHASE 2
Year -1 Year 1 Year 2 Year 3 Year 4 Year 5+
Oxides / Heap Leach (Crushed) 5.0 5.0 5.0 5.0
Sulphides / Milling 5.8 7.2 7.2 10.8 14.4
Total Tonnes 5.0 10.8 12.2 12.2 10.8 14.4
  • Process design
    • Oxides: three-stage crushing (targeted crush size of 8 mm), agglomeration, heap leaching and refining in Year -1 to Year 3 and ROM dump leaching and refining in Year 4 to Year 6 to produce Ag-Au doré bars
    • Sulphides: three-stage crushing, grinding (targeted grind size of 200 micron) and flotation to produce Pb and Zn concentrates

 

Head grades:

 

The mine plan focuses on feeding higher grades to the mill earlier in the mine life:

  • Year 1 – 4: processing of higher-grade oxide material from the South Corridor and sulphide material predominantly from the Pozo de Plata zone
  • Year 5 – 12: processing of higher-grade sulphides from the NE Extension and the South Corridor
  • Year 13 – 16: processing of lower-grade material stockpiled during Year 1 to Year 12

 

HEAD GRADES UNIT PHASE 1 PHASE 2 LOM
Year 1 – 4 Year 5 – 12 Year 13 – 16
Oxides          
Tonnes processed (Mt) 25 4 29
Ag (g/t) 37 29 36
Au (g/t) 0.08 0.05 0.08
AgEq (g/t) 43 33 42
Sulphides          
Tonnes processed (Mt) 31 115 52 199
Ag (g/t) 57 32 13 31
Au (g/t) 0.26 0.07 0.04 0.09
Pb (%) 0.80 0.50 0.17 0.46
Zn (%) 0.80 0.92 0.34 0.75
AgEq (g/t) 118 88 34 80

Note – Phase 1 and LOM Oxide tonnes/grades include tonnes processed on the heap leach in Year -1

 

Recoveries:

  • Oxides: recoveries were based on coarse bottle roll tests and preliminary results from column leach tests completed in 2021. Recoveries average 56% for Ag and 63% for Au for crushed feed and 36% for Ag and 35% for Au for uncrushed ROM feed.
  • Sulphides: recoveries were based on the 2021 metallurgical test program which included lock-cycle tests and examined metal recoveries to the silver-lead concentrate and the silver-zinc concentrate at varying head grades for each of the major geological rock types at Cordero. Metal recoveries to the two concentrates are summarized below:

 

SULPHIDE RECOVERIES (weighted average) PHASE 1 PHASE 2 LOM
Year 1 – 4 Year 5 – 12 Year 13 – 16
Ag 92% 83% 67% 84%
Au 19% 19% 19% 19%
Pb 90% 86% 69% 86%
Zn 85% 86% 74% 85%

 

 

Tailings Management Facility:

  • The TMF design was completed by Knight Piésold and is based on a conventional thickened tailings dam facility of downstream construction type.
  • The TMF is located directly west of the open pit. The design incorporates five dam lifts over the LOM.
  • Total capacity of the TMF is 179M m3 (252 Mt); this is significantly greater than the estimated volume requirement of 142M m3 based on the PEA mine plan.
  • An evaluation of using a dry-stacked tailings facility will be completed as part of pre-feasibility work.

 

CONCENTRATE TERMS:

 

Metal Payable:

  • Cordero is expected to produce clean, highly saleable concentrates with minimal penalty elements as established in the 2021 metallurgical test program.
  • Industry standard payables and deductions were applied to the Pb and Zn concentrates as per the table below. A metallurgical balance summary is included in the Appendices.
  • Approximately 85% of the Ag reports to the Pb concentrate where higher payabilities are received.

 

  Ag Au Pb Zn
Pb Concentrate        
Average concentrate grade LOM  2,900 g/t 1.6 g/t 52 %  
Payable metal 95 % 95 % 95 %  
Minimum deduction 50 g/t 1 g/t  3 units  
Zn Concentrate        
Average concentrate grade LOM 300 g/t 0.5 g/t   51 %
Payable metal 70 % 70 %   85 %
Deduction 3 oz/t 1 g/t    

 

Treatment/Refining Charges:

  • Treatment and refining charges were based on a review of spot and recent benchmark pricing and are summarized as follows:

 

PARAMETER UNITS PEA COST SPOT 2021 BENCHMARK
TREATMENT/REFINING CHARGES        
Treatment charge – Pb con $/dmt $100 ~$60 $140
Treatment charge – Zn con $/dmt $200 ~$80 $160
Ag refining charge – Pb con $/oz $1.00 ~$0.75 $1.50

 

 

Concentrate Transportation:

  • Transportation costs assume trucking of the concentrate via containers to the international port at Guaymas, Sonora, and then shipping via ocean freight to Asia.
  • Estimated transportation costs (trucking, port handling and ocean freight) are $128/wmt for Pb concentrate and $116/wmt for Zn concentrate.

 

CAPITAL EXPENDITURES:

 

Initial Capital (for parallel processing of crushed oxides and sulphides)

  • Year -2: construction of on-site infrastructure, power line and the heap leach circuit with capacity of 5 Mtpa to process oxide/transition material (includes a three-stage oxide crushing circuit, heap leach pad/ponds and Merrill Crowe plant).
  • Year -1: first sulphide circuit with a capacity of 7.2 Mtpa (includes sulphide crushing circuit, ball mill and flotation plant) and construction of the TMF including the initial dam lift.

 

Expansion Capital (to expand plant to 14.4 Mtpa sulphides only)

  • Year 3: addition of second sulphide circuit to expand processing rate to 14.4 Mtpa by the addition of a ball mill and flotation circuit creating two parallel sulphide circuits. The crushing circuit previously used for oxides will be dedicated to sulphides from Year 4 onwards and will not require repurposing.
  • Year 8: expand flotation circuit with additional flotation cells, cyclones, filters and thickeners to accommodate the higher zinc grades from Year 9 to Year 11.

 

Sustaining Capital

  • TMF: the tailings dam will be completed in five lifts over the LOM at a total capital cost of $110 M ($15 M initial capex plus $95 M of sustaining capex).
    • Other: additional sustaining capex totals $113 M over the LOM and includes sustaining capital for the process plant and mobile equipment and replacements/refurbishments of infrastructure assets.

 

DESCRIPTION (all in US$ millions) INITIAL CAPITAL EXPANSION CAPITAL SUSTAINING LOM CAPEX TOTAL
LOM CAPEX
Year -2 Year -1 Year 3 Year 8
CAPITAL EXPENDITURES            
Mining $26 $1     $7 $33
Infrastructure $34 $9 $10   $16 $69
Heap Leach + Oxide Plant $71 $1     $4 $76
Sulphide Processing Plant   $95 $51 $23 $30 $199
Tailings Facility (TMF)   $15     $95 $110
Indirects $22 $30 $17 $6 $4 $78
Owners Costs $6         $6
Closure (net of Salvage Value)         $22 $22
Contingency $28 $30 $16 $6 $29 $110
Capital Expenditures – Subtotals $187 $181 $94 $35 $208 $704
$368
             
PRE-SULPHIDE OPERATIONS            
Revenue   $121        
Mining Costs   ($110)        
Process + G&A Costs   ($27)        
Operating Cash Flow for Year -1   ($16)        
             
NET FUNDING REQUIREMENT $384        
           

 

OPERATING COST ASSUMPTIONS:

 

Mining:

  • Mining is assumed to be completed by contract mining; estimated mining costs were based on contractor quotes for Cordero received by AGP

 

Processing and G&A Costs:

  • Processing costs for the heap leach and mill/flotation, and G&A costs were developed by Ausenco from first principles.
  • Sulphide processing costs benefit from a conventional flotation process design and low power costs. The targeted coarse grind size of 200 micron alleviates the need for a SAG mill.
  • G&A costs estimates are based on a small camp and administration office at site. The majority of the work force will be Mexican nationals commuting daily from the local town of Parral. Parral is 25 km south of Cordero and has a population of approximately 100,000. It is the regional government centre in the southern part of Chihuahua State and has a well-established service industry that supports numerous local mining operations.

 

PARAMETER UNITS PEA COST
OPERATING COSTS    
Mining – Mill Feed $/t mined $2.16
Mining – Waste $/t mined $2.04
Processing – Heap leach crushed $/t stacked $3.84
Processing – Heap leach ROM $/t stacked $1.39
Processing – Milling (7.2 Mtpa) $/t milled $7.01
Processing – Milling (14.4 Mtpa) $/t milled $6.57
Site G&A (14.4 Mtpa) $/t milled $0.86

 

 

OPPORTUNITIES:

 

Work completed during the preparation of the PEA outlined a number of opportunities that have the potential to improve the economic and ESG performance of the project:

  • Mine life extension: there are over 300 Mt of Sulphide Resource that sit outside the PEA design pit but within the Resource pit shell. These resources as summarized below have the potential to extend the mine life and/or increase production levels at higher commodity prices.

 

Class Tonnes Grade Contained Metal
Ag Au Pb Zn AgEq Ag Au Pb Zn AgEq
(Mt) (g/t) (g/t) (%) (%) (g/t) (Moz) (koz) (Mlb) (Mlb) (Moz)
Measured 33 15 0.06 0.21 0.42 38 16 63 151 306 40
Indicated 187 16 0.04 0.23 0.45 40 94 221 952 1,869 238
M&I 220 16 0.04 0.23 0.45 39 110 284 1,103 2,175 278
Inferred 106 14 0.03 0.19 0.38 34 48 97 445 897 117

 

Note – the full Resource is provided in the Appendix; further details can be found in the Company’s October 21, 2021, press release.

 

  • Coarser grind size: metallurgical test work suggests higher recoveries may be achieved at coarse grind sizes (greater than the 200 micron used in the PEA). An evaluation of coarse particle flotation will be completed as part of the 2022 Prefeasibility Study (“PFS”). Coarse particle flotation has the potential to further reduce operating costs and water consumption.
  • Dry stack tailings: an evaluation of using dry stacked tailings to improve ESG performance will be completed as part of the PFS.

 

TECHNICAL DISCLOSURE:

 

  • Inferred material, representing 0.9% of the mill feed, is included in the total mill feed. Inferred resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as reserves.
  • Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  • Readers are cautioned that the PEA is preliminary in nature and that there is no certainty the estimates utilized in the PEA will be realized.
  • A full technical report will be prepared in accordance with NI 43-101 and will be filed on SEDAR within 45 days of this press release.
  • AgEq is calculated based on the following commodity prices: Ag – $22.00/oz, Au – $1,600/oz, Pb – $1.00/lb and Zn – $1.20/lb.
  • All-in Sustaining cost (AISC) is calculated as: [Operating costs (mining, processing and G&A) + Royalties + Concentrate Transportation + Treatment & Refining Charges + Concentrate Penalties + Sustaining Capital (includes capital for TMF dams lifts with capacity for less than five years) + Closure Costs] / Payable AgEq ounces

 

About Discovery:

 

Discovery’s flagship project is its 100%-owned Cordero project, one of the world’s largest silver deposits. The PEA completed in November 2021 demonstrates that Cordero has the potential to be developed into a highly capital efficient mine that offers the combination of margin, size and scaleability. Cordero is located close to infrastructure in a prolific mining belt in Chihuahua State, Mexico. Continued exploration and project development at Cordero is supported by an industry leading balance sheet with cash of over C$75 million. Discovery was a recipient of the 2020 TSX Venture 50 award and the 2021 OTCQX Best 50 award.

 

APPENDIX A – MINERAL RESOURCE ESTIMATE

 

SULPHIDE RESOURCE (assumed to be processed via mill/flotation)

 

NSR $/t
cut-off
Class Tonnes Grade Contained Metal
Ag Au Pb Zn AgEq Ag Au Pb Zn AgEq
(Mt) (g/t) (g/t) (%) (%) (g/t) (Moz) (koz) (Mlb) (Mlb) (Moz)
$7.25/t Measured 128 22 0.08 0.31 0.52 52 89 328 881 1,470 212
Indicated 413 19 0.05 0.28 0.51 47 255 707 2,543 4,663 625
M&I 541 20 0.06 0.29 0.51 48 344 1,035 3,424 6,132 837
Inferred 108 14 0.03 0.19 0.38 34 49 99 451 909 119

 

 

OXIDE/TRANSITION RESOURCE (assumed to be processed by heap leaching)

 

NSR $/t
cut-off
Class Tonnes Grade Contained Metal % Oxide / %
Trans
Ag Au AgEq Ag Au AgEq
(Mt) (g/t) (g/t) (g/t) (Moz) (koz) (Moz)
$4.78/t Measured 23 20 0.06 25 15 43 19 92% / 8%
Indicated 75 19 0.05 23 45 125 56 87% / 13%
M&I 98 19 0.05 23 60 168 74 88% / 12%
Inferred 35 16 0.04 20 18 44 22 63% / 37%

 

 

SUPPORTING TECHNICAL DISCLOSURE FOR RESOURCE:

  • Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  • AgEq for the Sulphide Resource is calculated as Ag + (Au x 16.07) + (Pb x 32.55) + (Zn x 35.10); these factors are based on commodity prices of Ag – $24.00/oz, Au – $1,800/oz, Pb – $1.10/lb, Zn – $1.20/lb and assumed recoveries of Ag – 84%, Au – 18%, Pb – 87% and Zn – 88%.
  • AgEq for the Oxide/Transition Resource is calculated as Ag + (Au x 87.5); this factor is based on commodity prices of Ag – $24.00/oz and Au – $1,800/oz and assumed recoveries of Ag – 60% and Au – 70%.
  • The Resource is constrained by a pit optimisation based on the following commodity prices: Ag – $24.00/oz, Au – $1,800/oz, Pb – $1.10/lb, Zn – $1.20/lb. Additional parameters for the pit constraint are provided in the Company’s October 20, 2021, press release.
  • Individual metals are reported at 100% of in-situ grade.
  • The effective date of the Resource is October 20, 2021, and is based on drilling through July 2021.
  • There are no known legal, political, environmental or other risks that could materially affect the potential development of the Resource.
  • A full technical report supporting the Resource will be prepared in accordance with NI 43-101 and will be filed on SEDAR within 45 days of the October 20, 2021, Resource press release.

 

 

APPENDIX B: AFTER-TAX NPV / IRR / PAYBACK SENSITIVITIES

 

Sensitivity of the Project’s NPV, IRR and payback at different Ag and Zn price assumptions is outlined in the table below. For these sensitivities the Au and Pb prices have been fixed at $1,600/oz and $1.00/lb respectively. The Base Case scenario for the PEA is highlighted in grey below and assumes Ag – $22.00/oz, Au – $1,600/oz, Pb – $1.00/lb and Zn – $1.20/lb.

 

 

  Ag ($/oz)
$18.00 $20.00 $22.00 $25.00 $30.00
    NPV
(5%)
IRR Payback NPV
(5%)
IRR Payback NPV
(5%)
IRR Payback NPV
(5%)
IRR Payback NPV
(5%)
IRR Payback
    (US$M) (%) (yrs) (US$M) (%) (yrs) (US$M) (%) (yrs) (US$M) (%) (yrs) (US$M) (%) (yrs)
Zn
($/lb)
$1.05 $715 27.2 % 3.3 $866 31.5 % 2.7 $1,016 35.8 % 2.2 $1,238 42.0 % 1.8 $1,607 52.5 % 1.4
$1.10 $765 28.2 % 3.2 $915 32.4 % 2.6 $1,064 36.6 % 2.1 $1,286 42.8 % 1.8 $1,655 53.2 % 1.4
$1.20 $863 30.0 % 3.1 $1,013 34.1 % 2.5 $1,160 38.2 % 2.0 $1,382 44.3 % 1.7 $1,751 54.5 % 1.4
$1.30 $961 31.7 % 2.9 $1,109 35.8 % 2.3 $1,257 39.7 % 2.0 $1,478 45.7 % 1.7 $1,848 55.8 % 1.4
$1.45 $1,105 34.2 % 2.7 $1,253 38.1 % 2.2 $1,401 42.0 % 1.9 $1,622 47.8 % 1.6 $1,992 57.8 % 1.3

 

 

APPENDIX C – PIT OPTIMISATION PARAMETERS:

 

The PEA mine plan was based on a pit optimization that utilised the following parameters:

 

PARAMETER UNITS Ag Au Pb Zn
COMMODITY PRICES $/oz or $/lb $ 20.00   $ 1,600   $ 0.95   $ 1.05  
ROYALTY %   0.5 %   0.5 %        
PIT SLOPE ASSUMPTIONS Five sectors were modeled based on core logging and two geotechnical holes with inter-ramp angles ranging from 40o to 59o
PROCESS RECOVERIES          
Heap Leach (Oxide/Transition) %   60 %   70 %        
Flotation (Sulphide)          
Breccia – Volcanic          
Recovery to Pb concentrate %   79 %   13 %   91 %    
Recovery to Zn concentrate %   11 %   7 %       88 %
Breccia – Sedimentary          
Recovery to Pb concentrate %   75 %   12 %   89 %    
Recovery to Zn concentrate %   9 %   4 %       86 %
Volcanic          
Recovery to Pb concentrate %   70 %   13 %   85 %    
Recovery to Zn concentrate %   13 %   6 %       81 %
Sedimentary          
Recovery to Pb concentrate %   70 %   13 %   83 %    
Recovery to Zn concentrate %   10 %   5 %       89 %
METAL PAYABLE          
Dore (Heap Leach)     98 %   99.9 %        
Concentrate (Flotation)          
Pb concentrate     95 %   95 %   95 %    
Zn concentrate     70 %   70 %       85 %
           
OPERATING COSTS   Base Per 10m below 1550m elev.  
Mining cost – Mill Feed $/t mined $ 1.54   +$ 0.024    
Mining cost – Waste $/t mined $ 1.64   +$ 0.024    
Processing cost – Heap leach (14,000 tpd) $/t stacked $ 3.92        
Processing cost – Flotation (40,000 tpd) $/t milled $ 6.39        
G&A (40,000 tpd) $/t milled $ 0.86        
           
TREATMENT/REFINING CHARGES          
Treatment charge – Pb con $/dmt $ 100        
Treatment charge – Zn con $/dmt $ 200        
Ag refining charge – Pb con $/oz $ 1.00        

 

 

APPENDIX D – LOM MINE PLAN SUMMARY

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/8166015b-ee80-4827-b8e3-23bacc987d76

 

APPENDIX E – LOM PROCESS THROUGHPUT SUMMARY

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/8166015b-ee80-4827-b8e3-23bacc987d76

 

APPENDIX F – SIMPLIFIED PROCESS FLOWSHEETS

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/b88056d2-d72a-4018-bf8f-b849b808fdc9

 

PHASE 1:

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/885c2668-aea9-4dea-ba22-ed401e1821c3

 

PHASE 2:

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/cb701e57-5f13-428e-8935-165e82a05cea

 

APPENDIX G – METALLURGICAL BALANCE SUMMARY

 

  UNITS PHASE 1 PHASE 2 LOM
Years 1 – 4 Years 5 – 12 Years 13 – 16
Ag Au Pb Zn Ag Au Pb Zn Ag Au Pb Zn Ag Au Pb Zn
MET BALANCE                                  
Average head grade g/t or % 57   0.26   0.80   0.80   32   0.07   0.50   0.92   13   0.04   0.17   0.34   31   0.09   0.46   0.75  
Recovered to Pb Con % 81 % 13 % 90 % 6 % 71 % 13 % 86 % 6 % 56 % 13 % 69 % 3 % 73 % 13 % 86 % 5 %
Recovered to Zn Con % 12 % 6 % 3 % 85 % 12 % 6 % 3 % 86 % 11 % 6 % 3 % 74 % 12 % 6 % 3 % 85 %
Tailings % 7 % 81 % 7 % 9 % 17 % 81 % 11 % 8 % 33 % 81 % 28 % 22 % 16 % 81 % 11 % 10 %
Total % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %
                                   
CONCENTRATE GRADES                                  
Pb Concentrate g/t or % 3,490   2.5   54 %   2,802   1.1   52 %   2,657   2.1   43 %   2,939   1.6   52 %  
Zn Concentrate g/t or % 524   1.3     52 % 254   0.3     51 % 285   0.5     50 % 298   0.5     51 %
                                   

 

APPENDIX H – LONG SECTIONS / CROSS SECTIONS:

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/5771cce0-8ad4-46df-8646-38d597111fd2

 

LONG SECTION A-A’ (looking NW)

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/3c5a9654-d929-49f3-aa0e-7848e33ba990

 

LONG SECTION B-B’ (looking NW)

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/f6c7f47c-cba9-4350-971d-2811424eae5e

 

CROSS SECTION C-C’ (looking NE)

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/15065795-2109-4f47-9c2b-bd5929581770

 

CROSS SECTION D-D’ (looking NE)

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/bf7ee835-3444-44b1-8cd4-5cb9f9c9d951

 

CROSS SECTION E-E’ (looking NE)

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/1b503900-7edc-4827-9b5d-7372bc5ebe8d

 

APPENDIX I – SITE LAYOUT:

 

https://www.globenewswire.com/NewsRoom/AttachmentNg/a92066eb-ca65-4ac8-91f5-fba03c554b65

 

APPENDIX J – PRODUCTION & CASH FLOW SCHEDULE:

 

  Units Total/Avg Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17+
MINING                                          
Mineralized Material Mined mt   228     1     14     23     18     18     24     18     19     19     19     21     16     12     5     0                  
Waste Mined mt   491     6     41     49     49     47     41     47     46     41     44     40     26     10     3     0                  
Total Material Mined mt   719     8     55     72     67     65     65     65     65     60     63     61     42     22     8     0                  
Mining Rate ktpd   137     22     157     206     192     186     186     186     186     171     181     175     121     62     22     1                  
Strip Ratio w:o   2.2     5.2     2.8     2.2     2.7     2.7     1.8     2.5     2.5     2.2     2.3     1.9     1.6     0.8     0.6     0.1                  
                                           
PROCESSING                                          
CRUSHED OXIDES / HEAP LEACH:                                          
Heap Leach Crushed Tonnes mt   20         5     5     5     5                                                          
Stacked Grades:                                          
Ag g/t   42         58     38     35     35                                                          
Au g/t   0.09         0.08     0.10     0.09     0.08                                                          
AgEq g/t   48         64     46     41     41                                                          
ROM OXIDES / HEAP LEACH:                                          
Heap Leach ROM Tonnes mt   9                         5     4     0                                              
Stacked Grades:                                          
Ag g/t   24                         18     28     44                                              
Au g/t   0.06                         0.07     0.05     0.08                                              
AgEq g/t   28                         23     32     50                                              
SULPHIDES / FLOTATION:                                          
Milling Rate ktpd   36             16     21     21     31     41     41     41     41     41     41     41     41     41     41     41     26      
Sulphide Tonnes Processed mt   199             6     7     7     11     14     14     14     14     14     14     14     14     14     14     14     9      
Mill Head Grade:                                          
Ag g/t   31             62     63     61     48     35     34     31     30     43     37     29     23     13     13     13     12.6      
Au g/t   0.09             0.19     0.41     0.36     0.15     0.07     0.08     0.07     0.07     0.08     0.07     0.07     0.06     0.04     0.04     0.04     0.04      
Pb %   0.46 %           0.74 %   1.04 %   0.91 %   0.62 %   0.46 %   0.52 %   0.39 %   0.39 %   0.66 %   0.67 %   0.53 %   0.37 %   0.17 %   0.16 %   0.16 %   0.16 %    
Zn %   0.75 %           0.92 %   0.79 %   0.74 %   0.77 %   0.86 %   0.92 %   0.79 %   0.81 %   1.33 %   1.15 %   0.90 %   0.62 %   0.36 %   0.34 %   0.34 %   0.34 %    
AgEq g/t   80             132     155     143     107     87     90     78     78     119     106     84     62     35     33     33     33      
Lead Concentrate – Recovery:                                          
Ag %   73 %           81 %   82 %   82 %   77 %   71 %   71 %   70 %   70 %   79 %   72 %   67 %   66 %   56 %   56 %   56 %   56 %    
Au %   13 %           13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %   13 %    
Pb %   86 %           90 %   91 %   90 %   90 %   85 %   87 %   85 %   85 %   89 %   88 %   87 %   84 %   69 %   69 %   69 %   69 %    
Zinc Concentrate – Recovery:                                          
Ag %   12 %           12 %   11 %   12 %   12 %   12 %   12 %   12 %   12 %   12 %   12 %   12 %   12 %   11 %   11 %   11 %   11 %    
Au %   6 %           6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %   6 %    
Zn %   85 %           86 %   86 %   85 %   84 %   86 %   86 %   86 %   86 %   88 %   88 %   87 %   81 %   74 %   74 %   74 %   74 %    
                                           
                                           
                                           
                                           
                                           
PRODUCTION PROFILE                                          
METAL PRODUCED:                                          
Ag – Oxides moz   17         5     3     3     3     1     1     0                                              
Au – Oxides koz   42         8     10     9     8     3     2     0                                              
AgEq – Oxides Metal Produced moz   20         6     4     4     4     1     2     0                                              
Ag – Sulphides moz   167             11     14     13     15     13     13     12     11     18     14     10     8     4     4     4     2.5      
Au – Sulphides koz   113             6     18     15     10     6     7     6     6     7     6     6     6     4     4     4     2      
Pb – Sulphides mlbs   1,727             84     149     130     132     123     145     106     105     187     187     145     100     38     36     36     23      
Zn – Sulphides mlbs   2,773             100     108     100     154     235     251     215     221     369     320     248     159     84     79     79     51      
AgEq – Sulphides Metal Produced moz   405             20     28     26     30     32     34     29     29     47     41     31     22     11     10     10     6.5      
Ag – Total moz   185         5     14     17     16     16     15     13     12     11     18     14     10     8     4     4     4     2.5      
Au – Total koz   155         8     17     26     23     13     9     7     6     6     7     6     6     6     4     4     4     2      
Pb – Total mlbs   1,727             84     149     130     132     123     145     106     105     187     187     145     100     38     36     36     23      
Zn – Total mlbs   2,773             100     108     100     154     235     251     215     221     369     320     248     159     84     79     79     51      
AgEq – Total Metal Produced moz   426         6     25     32     29     31     34     34     29     29     47     41     31     22     11     10     10     6.5      
METAL PAYABLE:                                          
Ag – Oxides moz   17         5     3     3     3     1     1     0                                              
Au – Oxides koz   42         8     10     9     8     3     2     0                                              
AgEq – Oxides Metal Payable moz   20         6     4     4     4     1     2     0                                              
Ag – Sulphides moz   148             10     12     12     13     12     11     10     10     16     12     9     7     4     3     3     2      
Au – Sulphides koz   41             2     10     9     3     1     0     1     1     5     4     0     1     1     1     1     1      
Pb – Sulphides mlbs   1,626             80     141     123     124     116     136     100     99     176     177     136     94     36     33     33     21      
Zn – Sulphides mlbs   2,340             84     91     84     130     198     212     181     186     312     271     209     134     70     67     67     43      
AgEq – Sulphides Metal Payable moz   352             18     25     23     26     28     29     25     25     41     36     27     19     9     9     9     6      
Ag – Total moz   165         5     13     16     15     14     13     11     10     10     16     12     9     7     4     3     3     2      
Au – Total koz   83         8     12     19     16     6     3     1     1     1     5     4     0     1     1     1     1     1      
Pb – Total mlbs   1,626             80     141     123     124     116     136     100     99     176     177     136     94     36     33     33     21      
Zn – Total mlbs   2,340             84     91     84     130     198     212     181     186     312     271     209     134     70     67     67     43      
AgEq – Total Metal Payable moz   372         6     22     28     27     27     30     29     25     25     41     36     27     19     9     9     9     6      
                                           
                                           
                                           
                                           
                                           
REVENUE                                          
OXIDE REVENUES:                                          
Ag Revenue US$mm $ 376       $ 112   $ 74   $ 67   $ 68   $ 22   $ 29   $ 3                                              
Au Revenue US$mm $ 67       $ 13   $ 17   $ 14   $ 13   $ 6   $ 4   $ 0                                              
Gross Revenue – Oxides US$mm $ 443       $ 126   $ 91   $ 82   $ 81   $ 27   $ 33   $ 3                                              
Treatment & Refining Charges US$mm $ 18       $ 5   $ 3   $ 3   $ 3   $ 1   $ 1   $ 0                                              
Net Revenue – Oxides US$mm $ 425       $ 121   $ 87   $ 78   $ 78   $ 26   $ 32   $ 3                                              
SULPHIDE REVENUES:                                          
Ag Revenue US$mm $ 3,250           $ 212   $ 275   $ 264   $ 292   $ 261   $ 249   $ 225   $ 220   $ 345   $ 274   $ 200   $ 158   $ 78   $ 75   $ 75   $ 48      
Au Revenue US$mm $ 66           $ 3   $ 16   $ 14   $ 5   $ 1   $ 1   $ 2   $ 2   $ 7   $ 6   $ 0   $ 1   $ 2   $ 2   $ 2   $ 1      
Pb Revenue US$mm $ 1,626           $ 80   $ 141   $ 123   $ 124   $ 116   $ 136   $ 100   $ 99   $ 176   $ 177   $ 136   $ 94   $ 36   $ 33   $ 33   $ 21      
Zn Revenue US$mm $ 2,808           $ 101   $ 110   $ 101   $ 156   $ 238   $ 255   $ 217   $ 224   $ 375   $ 325   $ 251   $ 160   $ 84   $ 80   $ 80   $ 51      
Gross Revenue – Sulphides US$mm $ 7,751           $ 396   $ 541   $ 502   $ 577   $ 616   $ 641   $ 544   $ 544   $ 903   $ 782   $ 588   $ 414   $ 200   $ 191   $ 191   $ 122      
Treatment & Refining Charges US$mm $ 780           $ 33   $ 43   $ 39   $ 51   $ 64   $ 68   $ 57   $ 58   $ 96   $ 84   $ 65   $ 44   $ 22   $ 21   $ 21   $ 14      
Total Penalties US$mm $ 33           $ 1   $ 1   $ 1   $ 2   $ 3   $ 3   $ 2   $ 2   $ 4   $ 4   $ 3   $ 2   $ 1   $ 1   $ 1   $ 1      
Net Revenue – Sulphides US$mm $ 6,938           $ 362   $ 497   $ 461   $ 524   $ 550   $ 570   $ 485   $ 484   $ 803   $ 695   $ 520   $ 368   $ 177   $ 168   $ 168   $ 108      
Net Revenue – Total US$mm $ 7,364       $ 121   $ 449   $ 575   $ 539   $ 550   $ 581   $ 573   $ 485   $ 484   $ 803   $ 695   $ 520   $ 368   $ 177   $ 168   $ 168   $ 108      
                                           
OPERATING COSTS                                          
UNIT COSTS:                                          
Mine (Includes Rehandling Costs) US$/t Moved $ 2.23       $ 2.00   $ 1.92   $ 1.91   $ 1.88   $ 1.90   $ 1.97   $ 2.03   $ 2.06   $ 2.16   $ 2.35   $ 2.45   $ 2.35   $ 1.86   $ 1.16   $ 1.03   $ 1.03   $ 1.23      
Processing – Crushed Oxide Heap Leach US$/t Stacked $ 3.84       $ 3.84   $ 3.84   $ 3.84   $ 3.84                                                          
Processing – ROM Oxide Heap Leach US$/t Stacked $ 1.34                       $ 1.29   $ 1.39   $ 1.44                                              
Processing – Sulphide US$/t Milled $ 6.59           $ 7.13   $ 7.01   $ 7.01   $ 6.58   $ 6.47   $ 6.47   $ 6.47   $ 6.47   $ 6.57   $ 6.57   $ 6.57   $ 6.57   $ 6.57   $ 6.57   $ 6.57   $ 6.57      
Site G&A Costs US$/t Processed $ 0.85       $ 1.45   $ 0.94   $ 0.83   $ 0.83   $ 1.14   $ 0.86   $ 0.86   $ 0.86   $ 0.86   $ 0.86   $ 0.86   $ 0.86   $ 0.86   $ 0.86   $ 0.86   $ 0.86   $ 0.86      
OPERATING COSTS INCURED:                                          
Mine (Includes Rehandling Costs) US$mm $ 1,602       $ 110   $ 147   $ 133   $ 128   $ 136   $ 135   $ 136   $ 131   $ 143   $ 144   $ 107   $ 62   $ 32   $ 17   $ 15   $ 15   $ 11      
Processing – Crushed Oxide Heap Leach US$mm $ 77       $ 19   $ 19   $ 19   $ 19                                                          
Processing – ROM Oxide Heap Leach US$mm $ 12                       $ 6   $ 6   $ 0                                              
Processing – Sulphides US$mm $ 1,309           $ 41   $ 50   $ 50   $ 71   $ 93   $ 93   $ 93   $ 93   $ 95   $ 95   $ 95   $ 95   $ 95   $ 95   $ 95   $ 61      
Site G&A Costs US$mm $ 194       $ 7   $ 10   $ 10   $ 10   $ 12   $ 12   $ 12   $ 12   $ 12   $ 12   $ 12   $ 12   $ 12   $ 12   $ 12   $ 12   $ 8      
Total Operating Costs US$mm $ 3,193       $ 136   $ 218   $ 213   $ 208   $ 226   $ 246   $ 242   $ 236   $ 248   $ 251   $ 214   $ 169   $ 139   $ 124   $ 122   $ 122   $ 80      
NSR – Government US$mm $ 18       $ 1   $ 1   $ 2   $ 2   $ 2   $ 1   $ 1   $ 1   $ 1   $ 2   $ 1   $ 1   $ 1   $ 0   $ 0   $ 0   $ 0      
Concentrate Transportation US$mm $ 527           $ 21   $ 29   $ 26   $ 34   $ 42   $ 46   $ 38   $ 38   $ 64   $ 58   $ 46   $ 31   $ 15   $ 14   $ 14   $ 9      
Total Costs US$mm $ 3,738       $ 137   $ 240   $ 244   $ 236   $ 261   $ 289   $ 290   $ 275   $ 287   $ 317   $ 273   $ 216   $ 171   $ 139   $ 137   $ 137   $ 90      
CASH COSTS:                                          
Co-Product                                          
Operating Cash Costs US$/oz AgEq $ 8.34           $ 9.82   $ 7.52   $ 7.84   $ 8.22   $ 8.34   $ 8.27   $ 9.56   $ 10.04   $ 6.12   $ 6.01   $ 6.34   $ 7.39   $ 13.61   $ 14.07   $ 14.07   $ 14.40      
Total Cash Costs US$/oz AgEq $ 12.07           $ 12.57   $ 10.29   $ 10.55   $ 11.47   $ 12.10   $ 12.31   $ 13.52   $ 14.06   $ 10.17   $ 10.13   $ 10.63   $ 11.50   $ 17.91   $ 18.34   $ 18.34   $ 18.67      
   All-in Sustaining Costs US$/oz AgEq $ 12.35           $ 12.98   $ 11.40   $ 10.76   $ 11.65   $ 12.20   $ 12.64   $ 13.65   $ 14.24   $ 10.27   $ 10.21   $ 10.74   $ 11.66   $ 18.24   $ 19.12   $ 18.69   $ 19.85      
                                           
                                           
                                           
                                           
                                           
CAPITAL EXPENDITURES                                          
Initial/Expansion Capex US$mm $497 $187 $181 $94 $35  
Sustaining Capex (incl. Closure net of Salvage) US$mm $208 $9 $31 $6 $36 $3 $10 $3 $4 $31 $3 $3 $3 $3 $31 $3 $7 $22
Total Capital Expenditures US$mm $704 $187 $181 $9 $31 $99 $36 $3 $10 $3 $39 $31 $3 $3 $3 $3 $31 $3 $7 $22
                                           
FREE CASH FLOW VALUATION                                          
Net Revenue US$mm $7,364 $121 $449 $575 $539 $550 $581 $573 $485 $484 $803 $695 $520 $368 $177 $168 $168 $108
Operating Expenses US$mm ($3,193) ($136) ($218) ($213) ($208) ($226) ($246) ($242) ($236) ($248) ($251) ($214) ($169) ($139) ($124) ($122) ($122) ($80)
Royalties + Concentrate Transportation US$mm ($545) ($1) ($23) ($31) ($28) ($35) ($43) ($48) ($39) ($39) ($66) ($59) ($47) ($31) ($16) ($15) ($15) ($10)
EBITDA US$mm $3,625 ($16) $209 $331 $303 $289 $292 $284 $210 $196 $485 $422 $304 $198 $37 $32 $32 $19
Capital Expenditures US$mm ($704) ($187) ($181) ($9) ($31) ($99) ($36) ($3) ($10) ($3) ($39) ($31) ($3) ($3) ($3) ($3) ($31) ($3) ($7) ($22)
Pre-Tax Free Cash Flow US$mm $2,921 ($187) ($198) $200 $300 $204 $253 $289 $274 $207 $157 $455 $419 $301 $195 $34 $1 $29 $12 ($22)
Mining Tax US$mm (273) ($16) ($25) ($23) ($22) ($22) ($21) ($16) ($15) ($36) ($32) ($23) ($15) ($3) ($2) ($2) ($1)
Income Tax Payable US$mm (784) ($9) ($68) ($64) ($51) ($62) ($58) ($46) ($47) ($120) ($110) ($82) ($52) ($8) ($4) ($2)
Post-Tax Free Cash Flow US$mm $1,864 ($187) ($198) $175 $207 $117 $180 $205 $195 $145 $95 $299 $277 $196 $127 $23 ($2) $22 $8 ($22)
                                           
                                           
    Pre-Tax Post-Tax                                  
NPV (5%) US$mm $1,858 $1,160                                  
IRR % 50.3% 38.2%                                  
Payback Yrs 1.6 2.0                                  

 

 

Posted November 30, 2021

Share this news article

MORE or "UNCATEGORIZED"


Equity Reports Additional High-Grade Mineralization at the Camp and Sveinson Targets, Silver Queen Project, BC; Drilling Resumes

Equity Metals Corporation (TSX-V: EQTY) reports thick intercepts ... READ MORE

May 18, 2022

Freegold Intersects 2.49 g/t Au over 167.7m and 0.94g/t Au over 617 m at Golden Summit

Freegold Ventures Limited (TSX: FVL) (OTCQX: FGOVF) is pleased to... READ MORE

May 18, 2022

Sitka Intercepts 107.5 Metres of 1.44 g/t Gold From Surface Including 2.0 Metres of 35.60 g/t Gold at its RC Gold Project in Yukon

Sitka Gold Corp. (CSE: SIG) (FSE: 1RF) (OTCQB: SITKF) is pleased... READ MORE

May 18, 2022

Appia Announces Operational And Drilling Update With New Intersections Of 50+ Metres Of Anomalous Radioactivity At Alces Lake Rare Earth Property, Northern Saskatchewan

Appia Rare Earths & Uranium Corp. (CSE:API) (OTCQB:APAAF) (Ge... READ MORE

May 18, 2022

STARR PEAK REPORTS 5.03% ZINC-EQUIVALENT OVER 12.5 METERS, HIGH GRADE COPPER INTERCEPT, AND DISCOVERY OF NEW 1 KM LONG VMS HORIZON

Starr Peak Mining Ltd.  (TSX-V: STE) (OTCQX: STRPF) is pleased ... READ MORE

May 18, 2022

We acknowledge the [financial] support of the Government of Canada.

Government of Canada Supported
Copyright 2022 The Prospector News