Silver Mines Ltd.'s feasibility study for its wholly owned Bowdens silver project in New South Wales, Australia, pegged a posttax net present value, discounted at 5%, of A$70.6 million and a 17.9% internal rate of return, the company said June 14.
The project will comprise a 2 million-tonne-per-annum open pit mining and conventional processing operation based on a maiden ore reserve of 29.9 million tonnes at 69.0 g/t silver, 0.44% zinc and 0.32% lead.
The study estimated average annual production of 3.4 million ounces of silver, about 6,900 tonnes of zinc and 5,100 tonnes of lead during a 16-year mine life. Higher silver grades in the early stages will result in annual output during the first three years of about 5.4 million ounces of silver, 6,000 tonnes of zinc and 5,200 tonnes of lead per annum.
Initial capital costs are estimated at A$246.0 million, including mine development, processing plant, tailings storage facility and power supply, with a further A$53.9 million for life-of-mine sustaining capital.
Operating cost has been estimated at an average of A$44.85/tonne of ore treated for a total of A$1.34 billion over the life of the mine. The total operating margin was pegged at A$558.7 million, with project payback 4.8 years from the start of production.
Project construction is anticipated to kick off in January 2020 and to be complete in June 2021, with first ore being fed to the plant in July 2021.