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Trilogy Metals study values Arctic polymetallic mine at US$1.41B

A pre-feasibility study for Trilogy Metals Inc.'s Arctic copper-zinc-lead-silver-gold deposit at its polymetallic Upper Kobuk property in Alaska outlined a base-case after-tax net present value of US$1.41 billion, discounted at 8%, and an internal rate of return of 33.4%.

The study demonstrated the potential technical and economic viability of establishing a conventional open pit mine and mill complex for a 10,000-tonne-per-day operation that runs 12 years.

The 10,000-tpd conventional grinding mill-and-flotation circuit will produce copper, zinc and lead concentrates containing significant gold and silver byproducts, the company said. Average annual payable production will be more than 159 million pounds of copper, 199 million pounds of zinc, 33 million pounds of lead, 30,600 ounces of gold and 3.3 million ounces of silver.

Total all-in cash costs are estimated at 63 U.S. cents per pound of payable copper, according to the Feb. 21 news release.

Total CapEx was pegged at US$845.5 million over the mine's life, including sustaining CapEx of US$65.9 million and initial CapEx of US$779.6 million, with payback on initial investment within two years.

Mine closure and reclamation costs were estimated at US$65.3 million.

The base-case scenario uses long-term metal prices of US$3.00/lb for copper, US$1.10/lb for zinc, US$1.00/lb for lead, US$18.00/oz for silver and US$1,300/oz for gold.

The study was based on probable reserves at Arctic of 43.0 million tonnes at 2.32% copper, 3.24% zinc, 0.57% lead, 0.49 g/t of gold and 36.0 g/t of silver.

Reserves were estimated assuming open pit mining methods and include a combination of planned and contact dilution and used metal prices of US$2.90/lb of copper, 90 cents/lb of lead, US$1.10/lb of zinc, US$1,250/oz of gold and US$18/oz of silver.