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Solitario: Study outlines US$198M net present value for Peruvian zinc project

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Solitario: Study outlines US$198M net present value for Peruvian zinc project

A preliminary economic assessment for the Florida Canyon zinc-lead-silver project in Peru outlined an after-tax net present value of US$198 million, at an 8% discount rate, and an internal rate of return of 24.7%.

The project is a joint venture between Solitario Exploration & Royalty Corp. and Compañía Minera Milpo SAA.

The study envisions an underground mining operation using conventional methods with an average throughput of 2,500 tonnes per day.

The project's payable average metal production per year will be 111.7 million pounds of zinc, 12.6 million pounds of lead and 160,000 ounces of silver over a 12.5-year mine life.

All-in costs will come in at US$90.64/tonne, or 73 U.S. cents per payable pound of zinc equivalent, while initial CapEx is pegged US$214 million with payback in 2.6 years, according to an Aug. 2 statement.

The study assumed metal prices of US$1.20/lb of zinc, US$1/lb of lead and US$16.50/oz of silver.

The PEA considered measured and indicated mineral resources of 692.3 million pounds of zinc, 86.1 million pounds of lead and 1.5 million ounces of silver contained within 3.3 million tonnes grading 9.51% zinc, 1.18% lead and 14.2 g/t of silver.

Since mineralization remains open in several directions, the company noted that the mine life could be extended with additional exploration drilling.

Meanwhile, more detailed mine scheduling can optimize revenues in the early stage of the mine life and can potentially improve project economics.