TSX-V-listed Constantine Metal Resources has announced the results of a preliminary economic assessment (PEA) for its 51%-owned Palmer zinc/copper/gold/silver project, in south-east Alaska, demonstrating a “high-quality project with strong economics”.
CEO Garfield MacVeigh said on Wednesday that quality North American development-stage zinc/copper projects were in scarce supply, particularly projects with high operating margins and resilience to low metal price environments as demonstrated by the Palmer PEA.
The PEA returned a pretax $354-million net present value at a 7% discount rate and a 24% pretax internal rate of return, based on metal prices of $1.22/lb zinc, $2.82/lb copper, $16.3/oz silver and $1 296/oz gold.
At a mining and processing rate of 3 500 t/d, the Palmer mine will operate for 11 years, recovering a total of 1.07-billion pounds of zinc, 196-million pounds of copper, 18-million ounces of silver, 91 000 oz of gold and 2.89-million tonnes of barite.
The Palmer mine will require preproduction development capital of $278-million and will be repaid in 3.3 years.
"What sets the Palmer project apart from its peers is excellent access by paved all-season highway and secondary roads, close proximity to an existing Pacific port ore terminal, reasonable and manageable capital costs, significant district-scale upside for additional mineral resources, and a joint venture that includes a global leader in the zinc smelting business,” says MacVeigh.
Shares in Constantine rose more than 7% to close at C$0.56 apiece on Wednesday.