A positive feasibility study and a 43-101 report have been released by Endeavour Silver Corp (NYSE:EXK). This is for the Terronera mine project that is located in Jalisco, Mexico. The study shows that reserves and resources are more than what was originally thought based on the economic assessment that had been completed earlier.
“Surface sampling also located high-grade, silver-gold mineralization in nine other veins on the property,” said Bradford Cooke, Endeavour Silver’s chief executive officer.
As per the current estimate, 3.96 million tones is the indicated resource with a grading of 2.18 g/t gold and 332 g/t silver while also containing 277,000 ounces of gold and 29.53 million ounces of silver. 720,000 tons is the inferred portion at 1.48 g/t gold and 309g/t silver while also containing 34,000 ounces of gold and 7.15 ounces of silver.
Estimates for the probable reserve indicate there are 4.06 tons translating to 1.95 g/t gold and 207 g/t silver while also containing 255,000 ounces of gold and 27.03 ounces of silver.
At prices of $18 for an ounce of silver and $1260 for an ounce of gold, the project’s net present value is estimated to be $78.1 million. This will mean that the payback period will be 4.3 years while the rate of return will be 21%.
Initial capital expenditures have been estimated to be approximately $69.2 million and this includes $43.1 million for the site and plant infrastructure. Equipment to be used at the mine as well as the mine’s development has been estimated to cost $8.7 million while $9.4 million will have to be set aside to cater for construction and procurement management, construction engineering and camp as well as owners costs. A figure of $8.0 million will also have to be included to cater for contingencies.
In the initial two years, a 1000 t/d operation will be have to be built by the investment. By the third year this will be increased to 2,000 t/d. The life of the mine is projected to be seven years.
On Monday shares of Endeavour Silver Corp rose by 5.97% to close the day at $3.37.