The Project has favorable economic potential across a range of discount rates and commodity prices. The operations outlined in this PEA are projected to generate over $49.4 Million in revenue after-tax over the 5 years of mine life at an 5% discount rate.
The metallurgical test work completed by Firestone and used within this PEA is preliminary in scope and results in the generation of the concentrates from the process proposed. Firstly a zinc concentrate with 30-40% zinc as carbonate with 45% payable metal and a lead concentrate with 60% lead and greater than 300 g/t silver with 95% payable. These initial terms have been obtained from metal traders in China using specific assumptions although no specific contracts have been finalized. Costs in this PEA are CIF Chinese Port and all transport costs, treatments charges and fees are included.
The Company has completed significant drilling of the current National Instrument 43-101 ("NI 43-101") defined resource whereby 92% of the resource estimate and the ore included in this PEA is in the measured and indicated categories. The ore body is open in two directions and this PEA recommended continued definition drill program to expand the existing resource. All past resource estimates have had a 3% zinc equivalent cut off within the defined pit shell confines. With a successful definition drill program and remodeling of the current resource, Firestone expects to be able to support increased production scenarios, which would further increase the already favorable Project NPV.
Terry Tucker, Firestone Director, elaborated on the preliminary economics of the Project, "We are pleased with the level of engineering expertise behind this PEA. Through the process we gained considerable insight into potential opportunities for further improvement in the already attractive overall potential economics, including future zinc concentrate concepts that will be validated during the Feasibility Study phase. The relatively low unit operating cost of production coupled with demand for zinc concentrate by various smelters, means this operation has the potential to remain profitable and we are predicting that the zinc price to remain strong as both demand and supply increase in the future."
Project Description--------------------------------------------------Capital Costs US$--------------------------------------------------Process Plant $11,255,074--------------------------------------------------Infrastructure $ 2,927,605--------------------------------------------------Indirect Costs $ 7,621,414--------------------------------------------------Project Sub Costs $21,804,094--------------------------------------------------Contingency (20%) $ 4,455,873--------------------------------------------------PROJECT TOTAL $26,259,967--------------------------------------------------
Mining at Torlon will be by standard open pit methods using a mining contractor with a bench height of 5m. Waste haulage distance is estimated at 500m with ore haulage at 2km. It is assumed that 75% of the rock will be free digging with ripping and hydraulic breaking and that the balance of 25% will require light blasting. Based on a 617,000 tonne per year of ore milled and 1,700 tonnes per day of ore mined, the cost estimates for mining ore and waste are $2.47 and $1.80 per ton respectively with a 2.57 stripping ratio.
