Callinex Mines Inc. on May 14 released an initial preliminary economic assessment outlining a open-pit mining operation, encompassing the company's Nash Creek and Superjack zinc projects in New Brunswick.
The study estimated an after-tax net present value of C$175.7 million, discounted at 5%; a 25.2% internal rate of return; and a payback period of 2.8 years.
At a base case development scenario, the project is expected to generate cash flows of C$292.5 million. This scenario considered a zinc price of US$1.25/lb, a lead price of US$1.10/lb and a silver price of US$17.0/oz.
The study incorporated inferred resources totaling 734.7 million pounds of zinc equivalent for both projects. Indicated resources for Nash Creek were previously estimated at 963.4 million pounds of zinc equivalent.
Preproduction CapEx is pegged at C$168.3 million, while sustaining CapEx is estimated at C$57.9 million, for a total capital cost of C$226.2 million.
The operation is expected to produce 76.7 million pounds of zinc, 14.6 million pounds of lead and 400,000 ounces of silver, or 95.5 million pounds of zinc equivalent, annually during a 10-year mine life.
The study envisages potential to create around 225 full-time jobs if the operation is advanced into production, according to the statement.