Toronto-based AbraSilver estimates an after-tax NPV of US$364 million at a 5% discount rate in an updated preliminary economic assessment of its Diablillos gold-silver mine in Argentina.
Internal rate of return is estimated at 30.2%, with a payback period of 2.6 years.
The mine will have an initial capital expenditure of US$255.0 million, with sustaining costs estimated at US$23.4 million. Closure costs will be US$8.2 million.
The updated PEA has a 45% reduction for pre-stripping costs. Initially it was anticipated that there would be 28.7 million tonnes of initial waste stripping material, which has now been reduced to 15.9 million tonnes.
Capital costs went up US$13.2 million from the initial 2018 PEA due to the addition of ancillary buildings, including temporary camp construction for approximately 700 workers.
AbraSilver estimates 7,000 tonnes per day production with an initial mine life of up to 16 years. Average annual production in the first five years will amount to 8 Moz of silver and 44,300 ounces of gold. Over the life of the mine, production averages will be 4.2 Moz of silver and 52,000 ounces of gold.
The mine will operate a conventional open pit. AbraSilver will process the metals using crushing, grinding, cyanide leaching with oxygen addition, and decantation thickeners. The front-end design has been simplified to include a primary crusher and semi-autogenous ball mill crusher circuit, as well as a coarse ore stockpile and extra equipment for the grinding area.
Recovery rates are estimated to be 73.4% for silver, and 86.0% for gold.
Several opportunities exist to expand the mineral resource, including expanding the Oculto pit, the shallow mineralisation towards Fantasma, and expanding mineral resources at depth.
AbraSilver is also looking at ways to increase processing plant throughputs, first from the Oculto pit and later from satellite pits.
Measured and indicated resources at Diablillos amount to 8.2 million tonnes at 124 g/t of silver for 32.7 million ounces of silver, and 0.98 g/t of gold for 259,000 ounces of gold. Indicated resources are 32.9 million tonnes at 54 g/t of silver for 57.4 million ounces of silver, and 0.70 g/t of gold for 744,000 of gold.