Pulacayo Project Feasibility Study - Apogee Silver

More documents

Recommendations

Info

Pulacayo 1 000 t/d Phase I Feasibility Study - NI 43-101 Technical Report 090644-3-0000-20-IFI-100 Plant site infrastructure includes a power supply line and substation connecting to the Bolivian power grid. Auxiliary buildings for administration, mine surface workshop, security facilities will be constructed around the plant site. 25.1.9 Project Capital and Operating Cost Estimates The pre-production (initial) capital cost for the Project was estimated at USD 45.9M. Sustaining capital required over the life of the operation has been estimated to be in the order of USD 41.1M (12.5 full production years). The LOM operating cost is estimated at USD 54.9 per ton of ore processed. 25.1.10 Financial Analysis Based on the technical work carried out for the Feasibility Study and the assumptions made, TWP concludes that: Capital costs have an impact on NPV and warrant close control and competitive tendering on key contracts in order to maximize project returns. Operating costs are significant in terms of labor, power and fuel and any efforts to reduce these will have a positive benefit to the project economics. The financial analysis, using a silver price of USD 28 per ounce indicates a pre-tax Net Present Value ("NPV") (using an 8% discount rate) of USD 126M with a pre-tax internal rate of return ("IRR") of 47.1%. The undiscounted payback period is 4.1 years after first capital expenditure. The results of the Feasibility Study indicate that Project economics are positive (based on the financial assumptions used), the Project is both technically and economical viable. Fluctuations in metal price (and to a lesser extent capital and operating costs) can significantly affect the economic viability of the Project. A reduction in the silver price from USD 28 per ounce to USD 20.00 would reduce the after tax IRR from 32.1% to 16.3%. Other than the metal price, the project does not seem to be sensitive to any specific parameter. An increase in silver price from USD 28 per ounce to USD 36 per ounce would increase after tax IRR to 45.3%. The project is not sensitive to capital expenditures and operating costs, i.e., 10% increase in the on mine operating cost would reduce the after tax IRR from 32.1% to 29.4%. A 10% increase in capital expenditure would reduce the IRR from 32.1% to 28.9%. At this time, given the exploration potential elsewhere on the property, Apogee may want to consider further development of the Pulacayo deposit and evaluate if a joint mining operation would improve project economics. Considering that the environmental permitting process for this Project may be more complex and take longer than planned, Apogee is currently proceeding with obtaining permits and authorizations for the 1,000 t/d project so that if and when project economics become more favorable, they can proceed quickly with execution. Delays in permitting would be detrimental to project economics. TWP Sudamérica S.A. Av. Encalada 1257 Of. 801, Santiago de Surco Lima 33, Perú (51-1) 4377473 Page 291
Pulacayo 1 000 t/d Phase I Feasibility Study - NI 43-101 Technical Report 090644-3-0000-20-IFI-100 Concentrate marketability and the smelter schedule imposed by the purchaser of the concentrates would have a direct effect on project economics 25.2 Risk and Opportunities 25.2.1 Risks Significant reduction in metal prices. Pastefill delivery sequencing problems creating surface storage issues inconsistent with operating permits. New water users while the mine is in production. Insufficient power capacity from the Bolivian national grid. Management of ground water inflow to the mine is a significant risk. Water inflow rate and water quality affect the permitting process, water pumping infrastructure and therefore the capital and operating expenditures. Availability of skilled labor to develop, operate and maintain the mine. Actual productivity rates may impact on project development and ramp-up. Backfilling program falls behind mining operation. Lack of supply of backfill material may result on poor geotechnical conditions. Old mine working may result in poor stability. Dilution of high-grade mineral with lower grade of lead/zinc mineral. This may be due to old waste fill in stopes, weak country rock and collapse in backfill due to size of excavation. Long-term stability and accessibility of vent rises. Project management risks related to lack of serviceability and maintenance of equipment due to remoteness of site. Not involving representatives of the local communities in the environmental activities. This will have a major repercussion on getting a social license to operate the mine. 25.2.2 Opportunities The current resources do not take into account mineral in the Paca deposit. Some drilling has taken place at Paca but this is not at Indicated level, and therefore cannot be included in this study. The current reserve takes into account only the sulphide resources to be mined underground. In the Resource Statement, there is significant material that can be economically mined using the open pit method. The calculated operating cost of $55/t milled is significantly lower than the NSR cut off of $70/t, which has been applied to the Reserve Estimation. This leaves significant upside to expand the Reserve and mine life. Treated ground inflow water may be enough to meet plant and mine water requirement. Use of higher capacity underground equipment to increase efficiency and productivity The resource models should be updated with results from the most recent drilling and geotechnical programs, to better understand and consider the mineral inventory available for exploitation. Consideration of the silver values and the potential that it TWP Sudamérica S.A. Av. Encalada 1257 Of. 801, Santiago de Surco Lima 33, Perú (51-1) 4377473 Page 292
Page 1 and 2:
NI 43 — 101 TECHNICAL REPORT PULA
Page 3 and 4:
Pulacayo 1 000 t/d Phase I Feasibil
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Page 215 and 216:
Page 217 and 218:
Page 219 and 220:
Page 221 and 222:
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
Page 229 and 230:
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
Page 243 and 244:
Page 245 and 246:
Page 247 and 248:
Page 249 and 250:
Page 251 and 252:
Page 253 and 254: Pulacayo 1 000 t/d Phase I Feasibil
Page 303: Pulacayo 1 000 t/d Phase I Feasibil
show all

Pulacayo Project Feasibility Study - Apogee Silver

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?