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
Figure 1.5 Silver Price Sensitivity
Other than the metal price, the project does not seem to be sensitive to any specific
parameter. Figure 22.1 depicts the sensitivity of NPV and IRR to the Silver Price.
1.10 Conclusions and Recommendations
TWP concludes that the Pulacayo Project is technically and economically viable under the
conditions stipulated in the FS and recommends that the project proceed with the
basic/detailed engineering stage. An investment of $US 45.9 million will yield a post-tax NPV
of $71.2 million at an 8% discount rate over an operating life of 12.5 years in January 2013
money terms.
Although the existing mineral resources at Pulacayo could support a significantly higher
production profile, it was the Company’s preference at this time to build a robust
underground operation with a conservative footprint and reduced capital cost. In this way,
technical execution risk is reduced while allowing subsequent growth to take place at a pace
that respects the needs and concerns of local communities. The initial mining scenario forms
the foundation for future production growth, and could provide the Company with the
opportunity to fund future expansion from internally generated cash flow.
Opportunities to further improve economic value of the Pulacayo Project include the
consideration of the existing open pit resources in the study, updating the resources and
reserves through additional drill campaigns, both at Pulacayo and the Paca deposit
immediately to the north, optimization of the mine schedule and additional optimization of
process plant design after additional test work on the lower grade silver ores once they are
accessible through mine development, the incorporation of the open pit resources at
Pulacayo into the mining plan, incorporation of the adjacent Paca resource, situated 6km to
the north of Pulacayo into the mining plan.
TWP Sudamérica S.A. Av. Encalada 1257 Of. 801, Santiago de Surco Lima 33, Perú (51-1) 4377473
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