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
CIF, named discharge port: for most offshore concentrate sales transactions, the seller
delivers concentrates to the buyer’s discharge port with all costs of loading, transport,
insurance and freight to destination for the seller’s account (CIF = Carriage, Insurance,
Freight). Under CIF contracts, the buyer/receiver is responsible for all vessel discharge
costs.
INW named destination: in many instances the buyers, be they traders or in some
instances smelters, will take delivery of the concentrates In Warehouse at or near the load
port where they can be blended and/or packaged (e.g. bagged) for onward shipment to a
smelter buyer. In this instance, the seller is responsible for the costs of delivering the
concentrates to the buyer’s warehouse and for the insurance covering this move. The
buyer is responsible for all handling costs from the warehouse to delivery to the receiving
smelter’s discharge port, including handling, vessel loading, ocean freight and insurance
after delivery to the warehouse.
FOB named load port: as an alternative to an INW delivery, buyers will sometimes take
delivery of concentrates loaded onto the ocean vessel at the load port. In this case, the
seller is responsible for the costs of delivering the concentrates to the buyer on board the
vessel (so including any warehousing and vessel loading costs) and for the insurance up
to the vessel’s rail. The buyer is responsible for all ocean shipping costs from the load port
to the discharge port, including insurance coverage from delivery to the carrying vessel’s
rail along with all discharge costs.
EXW or FCA: less frequently used, buyers will sometimes take delivery of the
concentrates at Seller’s site loaded into a truck or railcar. In this instance, seller is
responsible for simply loading the concentrates into the carrying conveyance; the buyer is
responsible for all further costs to destination, including insurance.
Where concentrates are to be delivered to a domestic or inland smelter then other terms and
conditions would apply (comparable to INW above); however this is not likely to be an option for
Pulacayo unless the La Oroya smelter were to reopen.
In the case of anything other than a CIF delivery, the seller will typically provide an allowance
(“Freight Allowance”) to the buyer to cover the equivalent costs of getting the concentrates to the
ultimate market destination i.e. the cost that the seller were to otherwise incur were it to be selling
concentrates direct to the end user. This allowance can either be included as part of the
treatment charge or appear as a separate charge.
19.4.2 Payable (Accountable) Metals
Based on the anticipated grades as set out in Section 3, payable, or accountable metals in the
Pulacayo zinc and lead concentrates can be expected to be as follows:
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