- Maiden PEA outlines a highly profitable project with low LOM cash costs of
$0.44 /lb ZnEq and AISC of$0.66 /lb ZnEq - Lagoa Salgada has outlined 10.3MT in M&I Resources at 9.1% ZnEq and 2.5MT in Inferred Resources at 5.9% ZnEq in the
North Zone only from 60 holes totaling 13,380 metres of drilling with substantial additional resources expected from future drilling - The South and Central Zones, with reported Resources delineated by only 20 holes totaling 9,849 meters of drilling, are not included in the current PEA, yet both zones are expected to have a significant benefit to future development
- Lagoa Salgada represents a substantial standalone project that has significant potential for growth, expansion and additional value creation
PEA Highlights (
|
- After-tax IRR of 31% and NPV8% of
$106M (C$139M @$1.31CAD/USD) - Nine-year mine life with production scenario of 2,700 tpd
- Average annual EBITDA of
$54.2 million - Four-year payback period of initial Capex of
$162.7 million - Average operating costs of
$49.43 /t milled represents low cost production scenario - Low average annual cash costs of
$0.44 /lb ZnEq and average annual All-In Sustaining Cost (AISC) of$0.66 /lb ZnEq - Significant upside opportunities remain with near-resource exploration targets identified with multiple deposits open laterally and at depth, and broader targets untested
- Compelling economics at current spot prices
(All dollar amounts are in US Dollars unless otherwise specified, results are reported on a 100% basis)
The PEA is based upon the Company’s current Mineral Resource Estimate for the
He continued, “The remaining Mineral Resources in the South and Central Zones, which were out of scope for this PEA, offer near-term growth potential with additional exploration work which we view as lower risk. We have also identified additional targets on the property using geophysical tools that are extremely encouraging and remain untested. We expect the strong correlation between geophysical testing and the subsequent high-grade drilling results experienced in the
This maiden PEA provides an initial economic assessment for the Lagoa Salgada project in the
Results from the PEA supports the Company’s investment thesis for acquiring the Lagoa Salgada project as it demonstrates a long-term, economically viable project with the potential to generate significant increased value and is demonstrating the characteristics of a high-quality flagship asset. With historic exploration work indicating low-risk, near-term growth potential, the Company is confident in the ability to improve the economics of this initial PEA through resource growth, optimization and improved recoveries with additional metallurgical work. The Company will perform additional metallurgical testing in parallel with its future exploration and development programs.
PEA Overview
Highlights of the key project metrics are provided in the following table on a 100% basis:
PEA Key Highlights | |
Project IRR pre-tax | 37% |
NPV8% pre-tax | |
Project IRR after-tax | 31% |
NPV8% after-tax | |
Life of mine pre-tax cash flow | |
Life of mine after-tax cash flow | |
Construction period | 2 years |
Payback period | 4 years |
Life of mine | 9 years |
Average Annual Production | 1.0 million tonnes |
Initial Capital Expenditure | |
LOM Sustaining Capital Expenditure & Closure | |
Average annual operating costs | |
Average Annual operating costs (C1) | |
Average annual All-In Sustaining Costs (AISC) | |
Metal Price Assumptions1 | |
Zinc | |
Lead | |
Copper | |
Silver | |
Gold | |
Tin | |
Recovery Assumptions | Massive Sulphide |
Zn | 80% |
Pb | 65% |
Cu | 25% |
Ag | 75% |
Au | 75% |
Sn | 30% |
Recovery Assumptions | Gossan |
Pb | 65% |
Sn | 40% |
Ag | 86% |
Au | 66% |
Average Annual Metal Production | |
Zn | 12.5kt |
Pb | 13.7kt |
Cu | 0.2kt |
Ag | 1.1Moz |
Au | 13koz |
Sn | 0.3kt |
Notes to Table:
1 The project economics have been calculated using consensus prices at the time of the Resource Estimate report in
The PEA was prepared by
The PEA is preliminary in nature, as it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the preliminary economic assessment will be realized.
Mining
The mine design is based on a single decline access from surface at a 12.6% gradient. Decline access is via a 30-meter deep boxcut. Stopes are accessed from level access drives in the north and the south of the deposit. Interlevel spacing varies between 24 meters and 35 meters. All mineralized material and waste development is mined with a 4.5 meter by 4.5 meter end profile. Ore and waste will be hauled to surface using 30 tonne trucks.
The deposit is planned to be mined using transverse sub-level open stoping with pastefill at a production rate of approximately 1 Mtpa. Crosscuts will access the deposit with drives developed laterally across the mineralization. Drives in mineralization will be placed 12.5 meters apart along strike, with stopes approximately 25 meters to 35 meters high, 12.5 meters wide and 25 meters in length. Stope heights in the Gossan tend to be generally less, approximately 20 meters high. A slot will be cut at the end of the mineralization and consecutive rings blasted in a retreating fashion over the full stope length back to the crosscut. Uphole drill rings from the existing drives in the Massive Sulphide will be drilled to extract the mineralization from the overlying Gossan deposit. Ventilation and escape raises will be raise-bored from surface.
The mine life of 9 years is based on a 2,700 tonne per day mining rate. Mine life is based on average head grades of 2.44% Zn, 2.85% Pb, 0.34% Cu, 0.16% Sn, 0.75 g/t Au, 69.8 g/t Ag. Unplanned dilution due to the extraction of the stope was assumed to be 8% for the Gossan zone and 5% for the Massive Sulphide zone. Mining recovery of 90% was assumed for the Gossan and 93% for the Massive Sulphide.
Approximately 55% of tailings (up to 540,000 tpa at a dry bulk density of 1.4) will be placed underground as paste fill to meet an annual demand of 400,000 m3 of void and the remaining tailings placed in the dry stack TSF. The paste plant will have an annual utilisation of just below 50% for the mine the balance being taken up in producing paste for the dry stacked tailings. Paste fill will be transported underground using a combination of pumping and gravity via boreholes and high-pressure pipelines to the stopes.
Metallurgy and Processing
The company has completed initial scoping level metallurgical study with Empresa de Perfuração e
The projected recoveries and concentrate grades in the table below are estimated for the project based on extensive experience working with polymetallic ores. Additional testing is planned to confirm the concentrate recoveries and grades.
Massive Sulphide | Flotation | Leached tailings | |||||||
Zn | Pb | Sn | Cu in Pb conc. | Ag in Pb conc. | Au in Pb conc. | Ag in Zn conc. | Ag | Au | |
Processing recovery | 80% | 65% | 30% | 25% | 35% | 10% | 20% | 20% | 65% |
Concentrate grade | 48% | 45% | 10% | 2.5% | |||||
Gossan | Flotation | Leaching | |||||||
Pb | Sn | Ag | Au | ||||||
Processing recovery | 65% | 40% | 66% | 86% | |||||
Concentrate grade | 60% | 10% |
Off-site charges include transport of concentrates either to a European smelter or to the port of
Infrastructure
Lagoa Salgada is situated in southern
The site will require an office, changeroom, shop and warehouse as well as storage for fuel, laydown areas, site fencing, and security building. An allowance for a total of 2,600 m2 of building space has been included in the PEA.
Total power requirement for the mine and mill is estimated to be 15 MW. There is ample opportunity to connect to the national grid with both 400 kV and 30 kV transmission lines operating within 7 km of the project site. However, for this study, a conservative allowance has been made to run a 30 kV, 20 MVA transmission line from the existing sub-station at Grândola.
Tailings and waste rock will be disposed of through the use of a dry-stack facility. Total tailings for life of mine are estimated at 7.5 Mt with a further 0.7 Mt of waste rock. Approximately 55% of tailings will be disposed of in the mined-out stopes via the pastefill system. The remaining 4.1 Mt of tailings and waste must be accommodated in the dry stack facility. The base of the facility will be lined, and a low perimeter berm and ditch will capture any precipitation run off during the life of mine. Run off will be collected in a settling pond for use by the mine as service water.
Regional precipitation averages 700 mm per year, and it is anticipated that the site will have a net neutral water balance once the initial dewatering of the mine is complete. All water from the mill will be reused. Total annual water gain through precipitation and mine dewatering is estimated to be approximately 325,000 m3. Loss to the tailings is estimated at 250,000 m3 per year with evaporation accounting for the remaining loss. A complete climate and water balance study is required.
It is anticipated that any make-up water that may be required will be obtained via local wells on site. Should this not be adequate, water can be obtained from the
A settling pond with capacity of 100,000 m3 will be established to hold precipitation run-off during the rainy season as well as mine and mill water discharge.
AMC has assumed ground water inflow of 5 L/s. Water will be discharged via a staged pump system with pumps located on 3 levels staging to surface.
Operating Costs
The LOM unit operating costs are estimated to be
Average LOM Unit Costs | |||||||
Cost Description | Operating Costs $/tonne milled | Operating Costs $/lb ZnEq Payable | |||||
Mining | |||||||
Processing | |||||||
Admin (G&A) | |||||||
Total Unit Costs |
Capital Costs
The total capital cost estimate is
Capital Cost Item | Initial | Sustaining | Closure | Total |
14.20 | 14.20 | |||
Ramp Box Cut | 1.00 | 1.00 | ||
9.85 | 11.61 | 21.46 | ||
Maintenance | 5.50 | 1.25 | 6.75 | |
Backfill Plant | 12.00 | 12.00 | ||
Process Plant | 60.00 | 0.60 | 60.60 | |
Tailings Storage Facility | 12.00 | 0.30 | 12.30 | |
Infrastructure & Services | 10.62 | 1.46 | 12.08 | |
Contingency | 37.55 | 37.55 | ||
Closure | 5.00 | 5.00 | ||
TOTAL CAPEX | 182.94 |
Project Economics
The project shows robust economic results with a pre-tax NPV at 8% of
Project economics are based on a 9-year mine life with a 4-year payback period, with positive after-tax cash flow commencing in Year 3.
Sensitivities
Project economics are most leveraged to the zinc price yet also highly leveraged to the lead price. A 15% increase to the zinc price results in a post-tax NPV8% increase of 23% to
The project economics have been calculated using consensus prices at the time of the Resource Estimate report in
Environmental & Permitting
In terms of
Mineral Resource Estimate
A summary of the Mineral Resource Estimate is set out in Table 1 below. The PEA was based only upon the Mineral Resource Estimate for the
Table 1: Lagoa Salgada Updated Mineral Resource Estimate
North Zone Mineral Resource Estimate - Effective
Average Grade | Contained Metal | |||||||||||||||||
Deposit | Category | Min | Tonnes | Cu | Zn | Pb | Sn | Ag | Au | ZnEq | AuEq | Cut-off | Cu | Zn | Pb | Sn | Ag | Au |
Zones | (kt) | (%) | (%) | (%) | (%) | (g/t) | (g/t) | (%) | (g/t) | ZnEq% | (kt) | (kt) | (kt) | (kt) | (koz) | (koz) | ||
North | Measured(M) | GO | 234 | 0.13 | 0.70 | 4.32 | 0.36 | 51 | 1.50 | 11.38 | 7.18 | 2.5 | 0.3 | 1.6 | 10.1 | 0.9 | 385.2 | 11.3 |
Indicated(I) | GO | 1,462 | 0.08 | 0.43 | 2.55 | 0.26 | 37 | 0.51 | 6.63 | 4.18 | 2.5 | 1.2 | 6.2 | 37.3 | 3.8 | 1,742.1 | 23.8 | |
M & I | GO | 1,696 | 0.09 | 0.47 | 2.79 | 0.27 | 39 | 0.64 | 7.28 | 4.60 | 2.5 | 1.5 | 7.9 | 47.4 | 4.6 | 2,127.2 | 35.1 | |
Inferred | GO | 831 | 0.08 | 0.48 | 2.62 | 0.17 | 27 | 0.37 | 5.66 | 3.57 | 2.5 | 0.7 | 4.0 | 21.8 | 1.4 | 727.6 | 9.9 | |
Measured(M) | MS | 2,444 | 0.40 | 3.12 | 2.97 | 0.15 | 72 | 0.74 | 10.95 | 6.91 | 3.0 | 9.7 | 76.3 | 72.5 | 3.7 | 5,623.9 | 58.4 | |
Indicated(I) | MS | 5,457 | 0.45 | 2.35 | 2.30 | 0.13 | 75 | 0.67 | 9.55 | 6.03 | 3.0 | 24.5 | 128.1 | 125.6 | 7.3 | 13,221.5 | 116.9 | |
M & I | MS | 7,902 | 0.43 | 2.59 | 2.51 | 0.14 | 74 | 0.69 | 9.98 | 6.30 | 3.0 | 34.2 | 204.4 | 198.1 | 10.9 | 18,845.5 | 175.2 | |
Inferred | MS | 1,529 | 0.23 | 1.96 | 1.32 | 0.09 | 45 | 0.49 | 6.36 | 4.01 | 3.0 | 3.6 | 30.0 | 20.2 | 1.4 | 2,219.7 | 24.0 | |
Measured(M) | Str | 94 | 0.37 | 0.88 | 0.28 | 0.05 | 17 | 0.12 | 3.08 | 1.94 | 2.5 | 0.3 | 0.8 | 0.3 | 0.0 | 51.0 | 0.4 | |
Indicated(I) | Str | 643 | 0.34 | 0.90 | 0.23 | 0.09 | 17 | 0.06 | 3.23 | 2.04 | 2.5 | 2.2 | 5.8 | 1.5 | 0.6 | 354.0 | 1.3 | |
M & I | Str | 737 | 0.34 | 0.90 | 0.24 | 0.09 | 17 | 0.07 | 3.21 | 2.03 | 2.5 | 2.5 | 6.6 | 1.7 | 0.6 | 405.0 | 1.7 | |
Inferred | Str | 142 | 0.24 | 1.12 | 0.39 | 0.04 | 17 | 0.09 | 2.95 | 1.86 | 2.5 | 0.3 | 1.6 | 0.6 | 0.1 | 75.6 | 0.4 | |
North | M & I | All zones | 10,334 | 0.37 | 2.12 | 2.39 | 0.16 | 64 | 0.64 | 9.06 | 5.72 | 2.9 | 38.2 | 219.0 | 247.2 | 16.2 | 21,377.7 | 212.0 |
North | Inferred | All zones | 2,502 | 0.18 | 1.42 | 1.70 | 0.12 | 38 | 0.43 | 5.93 | 3.74 | 2.8 | 4.6 | 35.6 | 42.6 | 2.9 | 3,022.8 | 34.3 |
Central and South Zones Mineral Resource Estimate - Effective
Average Grade | Contained Metal | |||||||||||||||||||
Deposit | Category | Min | Tonnes | Cu | Zn | Pb | Sn | Ag | Au | CuEq | Cut-off | Cu | Zn | Pb | Sn | Ag | Au | |||
Zones | (kt) | (%) | (%) | (%) | (%) | (g/t) | (g/t) | (%) | CuEq% | (kt) | (kt) | (kt) | (kt) | (koz) | (koz) | |||||
Central | Inferred | Str | 1,707 | 0.15 | 0.16 | 0.06 | 0 | 12 | 2.22 | 1.66 | 0.9 | 2.5 | 2.7 | 1.0 | - | 635.2 | 121.9 | |||
South | Measured(M) | Str/Fr | 0 | — | — | — | — | — | — | — | 0.9 | |||||||||
Indicated(I) | Str/Fr | 2,473 | 0.47 | 1.53 | 0.83 | 0.00 | 19 | 0.06 | 1.54 | 0.9 | 11.5 | 37.9 | 20.6 | 0.0 | 1,484.7 | 4.7 | ||||
South | M & I | Str/Fr | 2,473 | 0.47 | 1.53 | 0.83 | 0.00 | 19 | 0.06 | 1.54 | 0.9 | 11.5 | 37.9 | 20.6 | 0.0 | 1,484.7 | 4.7 | |||
South | Inferred | Str/Fr | 6,085 | 0.40 | 1.34 | 0.80 | 0.00 | 17 | 0.05 | 1.37 | 0.9 | 24.6 | 81.6 | 48.7 | 0.0 | 3,285.2 | 10.0 |
Notes to tables:
(1) Mineralized Zones: GO=Gossan, MS=Massive Sulphide, Str=Stringer, Str/Fr=Stockwork
(2) ZnEq% = ((Zn Grade*25.35)+(Pb Grade*23.15)+(Cu Grade*67.24)+(
(3) CuEq% = ((Zn Grade*25.35)+(Pb Grade*23.15)+(Cu Grade*67.24)+(
(4) AuEq(g/t) = ((Zn Grade*25.35)+(Pb Grade*23.15)+(Cu Grade * 67.24)+(
(5) Metal Prices: Cu
(6) Densities: GO=3.12, MS=4.76, Str=2.88, Str/Fr=2.88
The effective date of this Mineral Resource estimate is
The Technical Report to disclose the Mineral Resource Estimate was prepared in accordance with National Instrument 43-101 (“NI 43-101”) and the CIM Standards for mineral disclosure by Micon. The Technical Report is available on the Company’s website and SEDAR.
Quality Assurance and Quality Control
Analytical work was carried out by
Technical Disclosure
The reader is advised that the PEA summarized in this press release is intended to provide only an initial, high-level review of the project potential and design options. The PEA mine plan and economic model include numerous assumptions and the use of Inferred Mineral Resources. Inferred Mineral Resources are considered to be too speculative to be used in an economic analysis except as allowed for by Canadian Securities Administrators’ National Instrument 43-101 in PEA studies. There is no guarantee that Inferred Mineral Resources can be converted to Indicated or Measured Mineral Resources, and as such, there is no guarantee the project economics described herein will be achieved.
Ascendant will file with regulatory authorities within 45 days a Technical Report prepared in accordance with NI 43-101 that documents the PEA study and supports the current disclosure.
Qualified Persons
This PEA was prepared for
- The Mineral Resource estimate contents of this press release have been reviewed and approved by Charley Murahwi,
M.Sc .,P.Geo ., Pr. Sci. Nat., FAusIMM, Senior Geologist,Micon International Limited . - The Mining Engineering content of this press release has been reviewed and approved by
Gary Methven P.Eng . ofAMC Mining Consultants (Canada) Ltd. who is an “Independent Qualified Person” as defined by National Instrument 43-101. - The Infrastructure content of this press release has been reviewed and approved by
George Zazzi P.Eng . ofAMC Mining Consultants (Canada) Ltd. who is an “Independent Qualified Person” as defined by National Instrument 43-101. - The Metallurgical and Process Plant technical contents of this press release have been reviewed and approved by
Deepak Malhotra of as President ofPro Solv Consulting who is an “Independent Qualified Person” as defined by National Instrument 43-101.
Review of Technical Information
The scientific and technical information in this press release has been reviewed and approved by
About
Ascendant is a
After acquiring the El Mochito mine in
Ascendant holds an interest (21.25%) in the high-grade
The Company is engaged in exploration of the Project with the goal of expanding the already-substantial defined Mineral Resources and testing additional known targets. The Company’s acquisition of its interest in the
Neither the
For further information please contact:
Director, Communications & Investor Relations
Tel: 888-723-7413
info@ascendantresources.com
Cautionary Notes to US Investors
The information concerning the Company’s mineral properties has been prepared in accordance with National Instrument 43-101 (“NI-43-101”) adopted by the Canadian Securities Administrators. In accordance with NI-43-101, the terms “mineral reserves”, “proven mineral reserve”, “probable mineral reserve”, “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in the
Readers should be aware that the Company’s financial statements (and information derived therefrom) have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the
Forward Looking Information
This news release contains "forward-looking statements" and "forward-looking information" (collectively, "forward-looking information") within the meaning of applicable Canadian securities legislation. All information contained in this news release, other than statements of current and historical fact, is forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "budget", "guidance", "scheduled", "estimates", "forecasts", "strategy", "target", "intends", "objective", "goal", "understands", "anticipates" and "believes" (and variations of these or similar words) and statements that certain actions, events or results "may", "could", "would", "should", "might" "occur" or "be achieved" or "will be taken" (and variations of these or similar expressions). Forward-looking information is also identifiable in statements of currently occurring matters which may continue in the future, such as "providing the Company with", "is currently", "allows/allowing for", "will advance" or "continues to" or other statements that may be stated in the present tense with future implications. All of the forward-looking information in this news release is qualified by this cautionary note.
Forward-looking information in this news release includes, but is not limited to, statements regarding the exploration activities and the results of such activities at the
The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, risks generally associated with the mining industry, such as economic factors (including future commodity prices, currency fluctuations, energy prices and general cost escalation), uncertainties related to the development and operation of Ascendant's projects, dependence on key personnel and employee and union relations, risks related to political or social unrest or change, rights and title claims, operational risks and hazards, including unanticipated environmental, industrial and geological events and developments and the inability to insure against all risks, failure of plant, equipment, processes, transportation and other infrastructure to operate as anticipated, compliance with government and environmental regulations, including permitting requirements and anti-bribery legislation, volatile financial markets that may affect Ascendant's ability to obtain additional financing on acceptable terms, the failure to obtain required approvals or clearances from government authorities on a timely basis, uncertainties related to the geology, continuity, grade and estimates of mineral reserves and resources, and the potential for variations in grade and recovery rates, uncertain costs of reclamation activities, tax refunds, hedging transactions, uncertainty related to the results of the Company’s exploration activities at the
Should one or more risk, uncertainty, contingency, or other factor materialize, or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Accordingly, the reader should not place undue reliance on forward-looking information. Ascendant does not assume any obligation to update or revise any forward-looking information after the date of this news release or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law.
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