10,000 Tonnes Per Day Positive Results To Now Include Iron Ore Production
Sierra Metals Inc. (TSX: SMT) has obtained positive results in an updated Preliminary Economic Assessment (PEA) for the company’s Bolivar Mine, located in Chihuahua State, Mexico to now include iron ore concentrate production.
This PEA report was prepared as a National Instrument 43-101 Technical Report for Sierra Metals Inc. by SRK Consulting (Canada) Inc.
Highlights of the PEA include:
- Updated After-tax Net Present Value (NPV): US$361 Million vs. US$283 Million previously at an 8% discount rate
- The incremental benefit includes iron ore production and increasing production to 10,000 TPD from 5,000 TPD is now estimated to have an after-tax NPV (@8%) of US$78.2 million, an IRR of 69.0% vs. an NPV of US$57.4 million, and an IRR of 27.9% previously reported
- Net After-tax Cash Flow: US$650 Million vs. US$521 Million previously
- Life of Mine & Sustaining Capital Cost: US$345 Million
- Total Operating Unit Cost: US$25.62/tonne and US$1.50/lb copper equivalent
- Average LOM Copper Grade 0.72%
- Average LOM Iron Ore Grade 13.5% from ROM ore, 15% from long term residues stockpile
- Copper Price Assumption US$3.05/lb
- Iron Ore Concentrate Price Assumption for 62% Fines US$75.90/DMT
- MineLife: 14 years based on existing Mineral Resource Estimate
- Life of Mine Copper Payable Production: 551 million pounds
“I am very encouraged by the results of this updated PEA now including iron ore production. As mentioned in the previous PEA published in October 2020, the value could be further increased by the potential sale of magnetite (iron ore) as a by-product,” CEO, Luis Marchese, said.
“Today we are happy to report that we are confirming enhanced economics and improving the value of the Bolivar Mine. The economics in this PEA confirms the rationale for approving this project in April of this year, which is proceeding on a fast track basis.
“Additional to the iron ore project, the plan is to profitably develop and grow the Bolivar Mine through accelerating staged increases to a production rate of 10,000 TPD in 2024 from today’s capacity of 5,000 TPD, based on current analysts consensus metal price estimates.
“We are continuing with our strategy to increase the value of the Company on a per-share basis. This builds upon the demonstrated success we have shown with increases in our mineral resource base and working to improve the throughput at all mines.
“At the same time, we continue to use best practices to deal with the daily effects of COVID-19 on our workforce and communities. We expect these positive developments to improve profitability further and cash flow for the Company and all shareholders this coming year as well as in the future.”
The property is located in the Piedras Verdes District of Chihuahua State, Mexico, located approximately 250 km southwest of the city of Chihuahua and consists of 14 mineral concessions (6,800 hectares).
The Bolivar deposit is a Cu-Zn skarn and is one of many precious and base metal deposits of the Sierra Madre belt, which trends north-northwest across the states of Chihuahua, Durango, and Sonora in northwestern Mexico.
Mineralisation exhibits strong stratigraphic control, and two stratigraphic horizons host the bulk of the mineralisation: an upper calcic horizon, which predominantly hosts Zn-rich mineralization, and a lower dolomitic horizon, which predominantly hosts Cu-rich mineralization. In both cases, the highest grades are developed where structures and associated breccia zones cross these favourable horizons near skarn-marble contacts.
For further information please visit: https://www.sierrametals.com
