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Expansion of Maya Gold & Silver's Zgounder silver mine valued at US$200.2M

A preliminary economic assessment on a two-phase expansion of Maya Gold & Silver Inc.'s 85%-owned Zgounder silver mine in Morocco defined a posttax net present value of US$200.2 million, discounted at 6.5%, with a 118% internal rate of return.

The study looks at increasing annual silver production to 1.4 million ounces and subsequently to 4.8 million ounces, with the mine's processing rate set to increase from the current 185 tonnes per day to 500 t/d in 2018 and up to 2,000 t/d in 2021.

The analysis incorporates an updated resource estimate completed in January, which defined 10 million ounces of silver in the measured and indicated categories and a further 28.3 million ounces in the inferred category.

Based on current resources, Zgounder is expected to produce 33.7 million ounces of silver over 10 years, with operating costs of US$63.63/tonne of ore milled. The PEA looks at a combination of underground and open pit mining as well as reprocessing old tailings.

CapEx is estimated at US$46.9 million, including US$20 million for the 2,000 t/d mill. The installation of the 500 t/d mill, budgeted at US$5 million, is underway.

Maya Gold & Silver has an 85% interest in the mine's joint venture, Zgounder Millenium Silver Mining SA, with Morocco owning the remainder. Milling operations began in July 2014 ahead of the initial silver pour a month later.