Pacifico Minerals Ltd. said March 26 that an updated pre-feasibility study for the Sorby Hills lead-silver-zinc project in Western Australia defined a pretax net present value, at an 8% discount, of A$243 million, with a 62% internal rate of return and 16-month payback period from commercial production.
An indicated resource of 10.85 million tonnes grading 3.9% lead and 46 g/t of silver, part of a resource estimate update earlier this month, supports an eight-year mine life. The study assumes a lead price 92 US cents per pound, with silver price pegged at US$15.40 per ounce.
Total capital expenditure is projected at A$112 million, including sustaining capex. This took into account preproduction capex of A$95.4 million, which includes A$14.9 million allocated to preproduction mining costs and A$10.5 million for contingency, to be undertaken over a 12-month construction period.
Metal production is targeted at 249,000 tonnes of lead and 9.35 million ounces of silver over the mine's life, with an average yearly production of 31,125 tonnes of lead and 1.17 Moz of silver.
C1 direct cost of production is expected at 6 US cents per pound of lead. Average steady state cash flow is projected at A$60 million.
The operation's first full year of steady state commercial production is targeted for 2022. A detailed program for an optimized pre-feasibility study has been identified, which will go towards the completion of a definitive feasibility study, will be used as the basis for a development decision by late 2020.