Santander Pipe PEA
- The Santander Pipe demonstrates positive financial returns, with a pre-tax net present value (“NPV”) at 6% discount rate of USD 71.3 million, generating an estimated internal rate of return (“IRR”) of 46.6%.
- Project cash cost (“C1”) and all-in sustaining cost (“AISC”) of USD 0.82/lb Zn and USD 1.05/lb Zn, respectively, generating revenues of USD 388.6 million and pre-tax free cash flow of USD 99.6 million.
- The PEA estimated zinc concentrate production from the Santander Pipe at 313,600 dry metric tonnes of zinc concentrate over a 5-year schedule.
- The mineral resource estimate to be mined in the Santander Pipe comprises Indicated Mineral Resource of 3.23 Mt with 6.94% Zn and Inferred Mineral Resource of1.78 Mt with 5.95% Zn. The plant will process an average of 770,000 t of mineralized material per year (peak production at 900,000 tonnes year), with an average grade of 4.7% of Zn, 89% zinc recovery and 51% in zinc concentrate grade.
- The PEA supports the use of Avoca mining method with waste rock backfill and 20 and 15 m high sublevels in the Upper and Lower Zones, respectively. This is based on the geometry of the mineralized zones, geotechnical conditions, optimized stope recovery and dilution, and increased productivity up to 2,500 tpd production rate.
- The PEA metallurgical testwork show that the quality of concentrate is similar to the one achieved historically in the old Santander Mine. It is possible to obtain saleable commercial grade concentrates with no significant presence of deleterious elements leading to penalty.
- The PEA supports the use of existing infrastructure to support the Project operation, i.e., processing plant and TSF, power grid, magazines, drainage tunnel, workshops, roads, and auxilliary facilities.
Strong geological evidence of a continuation of mineralization in-depth, and that there are further extensions to the mineralization to be explored along the strike, both to the north and south of the current mine workings, in 2022, the geology team reports the discovery of the Pipe North Project (3 to 4 Mt, averaging 4 to 6% Zn, Potential Resource), which is the extension of the Old Pipe Mine.
PEA Highlights
| Unit | TOTAL | |
| Throughput Rate (tonne-per-day processed) | tpd | 2,500 |
| Estimated Production Period | years | 5 |
| Tonnes Processed | Million tonnes | 3.85 |
| Head Grade Zn | % | 4.67 |
| Metallurgical Recovery Zn | % | 89.0 |
| Head Grade Cu | % | 0.11 |
| Metallurgical Recovery Cu | % | 70 |
| Zn Concentrate Production | Thousand tonnes | 313.6 |
| Cu Concentrate Production | Thousand tonnes | 13.8 |
| Revenues (less by product cost)(1) | MUSD | 388.6 |
| Total OPEX | MUSD | 182.14 |
| Initial + Sustaining CAPEX | MUSD | 67.96 |
| EBITDA | MUSD | 167.6 |
| Pre-Tax Free Cash Flow (FCF) | MUSD | 99.6 |
| Operating Cost ($/t processed) | $/t | 47.35 |
| Total Cash Cost C1(2) ($/lb Zn) | $/lb | 0.82 |
| All-In Sustaining Cost(2) (“AISC”)1 ($/lb Zn) | $/lb | 1.05 |
| Pre -Tax - Net Present Value (6%) | MUSD | 71.3 |
| Pre-Tax Internal Rate of Return | % | 46.6 |
| After-Tax - Net Present Value (6%) | MUSD | 31.2 |
| After-Tax Internal Rate of Return | % | 25.1 |
| After-Tax Payback | years | 2.6 |