Pulacayo Project Feasibility Study - Apogee Silver

Pulacayo 1 000 t/d Phase I Feasibility Study - NI 43-101 Technical Report
090644-3-0000-20-IFI-100
Source: LME, July 20, 2012
Figure 19.10: Zinc Forward Curve
Nonetheless, consistent with the above market outlook, and for the purposes of this report, longterm
zinc prices are projected to average USD 2 200 per mt, or approximately USD 1.00/lb.
19.2.2.2 Lead
As with zinc, the lead metal market remains in surplus in 2012 however, medium-term, lead
appears to show some of the best fundamentals of any base metal, with strong support for higher
prices coming from both the demand and supply sides. On the demand side, with motor vehicles
accounting for roughly fifty percent of lead usage, demand will continue to benefit from strong
growth in the global automotive industry, particularly in China and, to a somewhat lesser extent,
India and other emerging markets. Elsewhere, while European figures are dismal in the face of
the ongoing economic crisis there, United States and Japanese auto output has rebounded
strongly from the disruption caused by the Japanese earthquake in March 2011. In other
applications, backup power batteries, which are benefitting from the growth of data centers and
the build-out of electrical grids in China and India, account for a significant portion of the
remainder of lead consumption.
On the supply side, 2012 has witnessed several events, which have affected production. In
China, a cadmium spill in Hechi in January and lead poisoning cases in three separate provinces
have affected production at several mines and smelters, while a fire at Doe Run’s 120 kt/y
Herculaneum smelter in the United States saw production disrupted there for nearly 6 weeks in
the second quarter. Despite these events, the lead market remains in surplus in 2012, the
International Lead-Zinc Study Group recently reported a small 32 kt refined metal surplus to the
end of May, but is forecast to move into deficit starting as early as 2013 on the back of closures
of major mines (Brunswick: 50 to 70 kt/y lead, closure set for 2013; Lisheen: 20 kt/y, closure set
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