Denarius Metals Corp. (TSXV: DSLV | OTCQX: DNRSF) has announced the results of a preliminary economic assessment (PEA) for its wholly-owned Zancudo project located in Antioquia, Colombia, approximately 30km southwest of Medellin. The PEA was prepared in accordance with Canadian standards and with an effective date of 24 October 2023.
“Material will be mined by a local mining contractor commencing in 2024 and processed…through conventional crushing and milling facilities, initially at a rate of 500tpd and increasing to 1,000 pd in 2025,” commented Denarius Metals CEO and executive chairman Serafino Iacono.
“The PEA envisions a 10-year mine life over which the company expects to generate net revenue of approximately US$1B from the sale of approximately 576Koz Au payable and 8.8Moz Ag payable over at a life-of-mine (LOM) average all-in sustaining cost (AISC) of US$1,059/oz Au.”
The Zancudo PEA is based on an updated mineral resource estimate (MRE) comprising 4.1Mt grading 6.5g/t Au and 107g/t Ag totaling 860Koz Au and 14.1Moz Ag. At a gold equivalent grade of 8.1g/t, the inferred resources represent a total of 1.06Moz Au Eq.
Over the approximate 10.3-year mine life, production from the mining and processing of about 3.5Mt of material is expected to recover 683Koz payable Au Eq. Recoveries will be at about 85% for gold and 87% for silver to concentrates from a three-stage crushing circuit. Initial capex costs will be US$14.8M including a US$2.0M contingency.
The project incorporates local contract mining and is expected to stimulate the local economy, benefitting the Municipality of Titiribi and surrounding communities through direct and indirect employment at the project, local sourcing of services and supplies and community programs funded by the company.
At long-term gold and silver prices of US$1,800/oz and US$22/oz, respectively, total LOM undiscounted after-tax project cash flow from mining operations amounts to US$266.4M. At a 5% discount rate, the net present value of the total LOM after-tax project cash flow amounts to US$206.3M. The project has an after-tax internal rate of return of 287% and payback in 2025.
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