Vancouver-based Great Panther expects to be able to make a decision in early 2019 about restarting the past-producing Coricancha precious and base metals mine that it bought in June last year.
The gold/silver/zinc/copper underground mine and mill complex, east of Lima, in Peru, has a 600 t/d processing plant and is fully permitted for production.
Coricancha has the potential to produce an average of three-million ounces a year of silver equivalent, according the preliminary economic assessment (PEA), which Great Panther published this week.
CEO James Bannantine said that Great Panther was pleased with the results of the Coricancha PEA, which estimates an after-tax internal rate of return of 81% and an after-tax net present value, at a 7.5% discount rate, of $16.6-million.
The PEA estimates that a total capital cost of $32.4-million will be required for the mine and processing plant, of which $8.8-million will be initial costs and $23.6-million sustaining capital costs.
Great Panther said that it would be able to fund the restart of Coricancha entirely from its current cash reserves.
With the PEA completed, Great Panther will advance the project with the initiation of a trial stope and bulk sample programme early in the third quarter to further de-risk the project. The objective of the bulk sample programme is to provide confirmation of expectations regarding throughput, grades and recoveries.
The PEA focuses on the restart of Coricancha using existing processing plant infrastructure and about 28% of the overall existing mineral resources, which are accessible through additional development work from existing mine workings.
In the event that the mine is returned to production, Great Panther noted that the development work in the PEA was expected to provide the opportunity to incorporate a greater portion of the existing resources into an expanded mine plan with a longer mine life.
“It is also expected to provide the access to conduct underground drilling, which may provide further opportunity to both add mineral resources, as defined by NI 43-101 and CIM definition standards and extend the mine life,” the company said on Friday.