A preliminary economic assessment on AbraPlata Resource Corp.'s Diablillos silver-gold property in Argentina defined a net present value of US$197 million, using a 7.5% discount rate, with a 30.2% internal rate of return and a 3.1-year payback period, all on a posttax basis.
The proposed open pit operation is expected to produce 9.8 million ounces of silver equivalent per year for eight years, with all-in sustaining costs of US$7.52/oz of silver equivalent produced, according to a March 2 release.
Initial CapEx is estimated at US$293 million, including US$91 million in prestripping costs at the Fantasma and Oculto deposits, and contingencies of US$32 million. Sustaining CapEx is pegged at US$5 million. Prestripping at Oculto is expected to take 18 months, the company said.
Diablillos hosts indicated resources containing 80.9 million ounces of silver and 732,000 ounces of gold within 27.1 million tonnes grading 93.1 g/t of silver and 0.84 g/t of gold, with inferred resources containing 1.7 million ounces of silver and 29,000 ounces of gold within 1.1 million tonnes grading 48.8 g/t of silver and 0.83 g/t of gold.
The estimate is effective as of August 2017 and uses cutoffs of 40 g/t of silver equivalent for the Oculto deposit and 40 g/t of silver for the Fantasma deposit.
"On the basis of historical drill results, our geological team believes that there is strong potential to expand the high grade gold zones in the eastern portion of the Oculto deposit, which are not included in the PEA pit shell," AbraPlata Chairman Hernan Zaballa said.
Data from the eastern area of the Oculto deposit was not included in the study due to the depth of mineralization, which would increase the stripping ratio.
