The updated PFS mine life is 37 years including stockpile production. The initial capital cost is estimated at $1.91 billion including a $244 million contingency. In 2016, an updated PFS by M3 indicates an initial 30,000 tpd throughput rate can internally fund a ramp up to a 90,000 tpd operation within 4-5 years. Strategically, Metates is unique in that a smaller mine can first be placed into production and scalable expansion can largely be funded by cash flow.
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On an after-tax basis at a 5% discount rate, the NPV is $2.5 billion with a 12.2% IRR and a payback of 6.3 years. At $1,350 gold/oz, $20 silver/oz and $1 zinc/lb, the pre-tax NPV is $4.2 billion at a 5% discount rate with a 16.3% IRR and payback of 5.1 years. The PFS demonstrates strong project economics and high leverage to gold and silver prices. Over the 25 year mine life, zinc production will average 135 million pounds per year. Zinc would be recovered from the pressure oxidation solutions via solvent extraction/electrowinning (SX/EW) methods to produce high grade zinc ingots. Close proximity to a high quality limestone resource and low cost power contribute significantly to the project’s economics. Total cash cost per gold equivalent ounce for production years 2-7 is $355, net of by-product credits.
#Durango wild lands metal processing full
Payable gold and silver production in the first six years of full production (years 2-7) averaged 845,000 ounces gold and 25 million ounces silver per year. The concentrate is transported downhill to the processing site via a slurry pipeline where the sulfides are oxidized in an autoclave circuit prior to cyanidation to recover the gold and silver. Crushed ore would be fed to a conventional SAG and ball mill circuit followed by a single stage flotation plant to produce a bulk sulphide concentrate. The PFS envisioned a conventional truck and shovel open pit mining operation at a 120,000 tpd throughput. In 2013, M3 Engineering & Technology of Tucson, Arizona (“M3”) completed a pre-feasibility study (“PFS”) of Metates.