Toronto-based base metals miner Ascendant Resources has announced “exceptional” results of its maiden preliminary economic assessment (PEA) for the Lagoa Salgada volcanic massive sulphide project, located on the Iberian Pyrite Belt, in Portugal.
The PEA outlines a robust and compelling economic assessment for Lagoa, based on the mineral resource estimate for the North zone.
The assessment assumes a two-stage underground mining development scenario, with single trackless ramp access. The mine should be able to mill at a rate of 2 700 t/d, with primary crushing, grinding, flotation and leaching of tailings to produce concentrates, including lead, zinc, copper, tin, gold and silver doré.
The assessment finds that the mine can be constructed in two years, at an initial capital expenditure of $162-million, while the payback period is estimated to be four years. The mine can produce one-million tonnes a year, with zinc production expected to average 12 500 t/y, lead production 13 700 t/y, silver production 1.1-million ounces a year and gold production 13 000 oz/y.
The yearly C1 operating costs will average $0.44/lb zinc-equivalent.
Ascendant confirms that there is ample opportunity for defining additional resources and extending the current nine-year mine life.
The PEA calculated an after-tax internal rate of return of 31% and a net present value, at an 8% discount, of $106-million.
"We are very pleased that our confidence and investment in the Lagoa project has been more than justified by the results of this maiden PEA. Over the short period that Ascendant has advanced the Lagoa project, we have demonstrated a long-life mine with a modest initial capital expenditure and low operating costs while also having a rapid timeline to production.
“This study outlines a low cost, high-margin operation, which the company intends to improve through continued growth in the size of the resource and improvement in quality of the mineralization through further exploration work,” says president and CEO Chris Buncic.
He adds that the remaining resources in the South and Central zones, which were out of scope for this PEA, offer near-term growth potential.
“We expect the strong correlation between geophysical testing and the subsequent high-grade drilling results experienced in the North zone to continue into these two zones,” the company states.