SilverCrest approves Las Chispas construction
Vancouver-headquartered SilverCrest Metals on Tuesday announced the results of a feasibility study for its Las Chispas project, in Sonora, Mexico, and formally approved construction of the $137.7-million project.
With the engineering, procurement and construction and underground development contracts in place, initial construction is already under way and is expected to ramp up through the first quarter of 2021.
The feasibility study outlines average production of 12.4-million silver-equivalent ounces a year from 2023 through 2029, with net free cash flow beginning in 2023. All-in sustaining costs will average $7.07/oz silver-equivalent over the 8.5-year life-of-mine.
Production will benefit from improved metallurgical recoveries for gold and silver of 97.6% and 94.3%, respectively. This compares to 94.4% for gold and 89.9% for silver reported in the preliminary economic assessment.
On an aftertax basis, Las Chispas generates a base case net present value, at a 5% discount, of $486.3-million, an internal rate of return of 52% and a payback period of one year.
The feasibility study and construction go-ahead follow within five years of drilling the first hole at Las Chispas, CEO Eric Fier pointed out.
“The study confirms what we have believed for a while, that Las Chispas is economic as a standalone operation. It is important to note that the feasibility study is just a snapshot in time. We are already working hard to increase our high-grade reserves, while simultaneously constructing the mine and process plant,” he said.
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