Update raises NPV by half
AbraSilver Resource has announced an updated prefeasibility study for its Diablillos silver-gold project in Salta, Argentina, to produce 7.6Mozpa of silver and 72,000ozpa of gold over 14 years.The project would yield an after-tax net present value of US$747 million at a 5% discount rate, with an internal rate of return of 27.
6% and a two-year payback following an initial capital cost of $544 million and $77 million in sustaining, using a $25.50/oz silver price and $2050/oz gold price.At spot prices, the NPV increases to $1.3 billion, the IRR to 39.3% and payback reduces to 1.5 years.The updated PFS features the replacement of on-site self-generation from a combined solar-diesel power plant with a connection to the national grid under a long-term power purchase agreement, reducing initial capital, lowering operating costs and, potentially, improving the project's carbon footprint.The PFS outlines a revised mine plan based on a new resource and reserve estimate that incorporates the additional exploration drilling results at JAC and the northeast zone of Oculto. It has also expanded available water resources to remove constraints on plant throughput."Diablillos is poised to deliver significant returns to our shareholders. Our team remains focused on advancing Diablillos towards production while continuing to unlock additional mineral resource potential through our ongoing successful exploration program," AbraSilver chief executive John Miniotis said.Diablillos hosts a reserve of 42.3Mt grading 91gpt silver and 0.81gpt gold for a 154gpt silver equivalent, containing 123.5Moz of silver and 1.1Moz of gold.Key changes included the fiscal incentives offered under the Incentive Regime for Large Investments announced earlier this year by Argentina's government for capital investments above $200 million and a new mine plan with improved sequencing.Capital and operating costs were updated reflecting inflation, changes to exchange rates on imported capital goods and additional capitalized waste stripping due to changing mine sequencing.The March PFS featured an annual average production of 7.7Moz of silver and 71,000oz of gold for 13 years, using metal prices of $23.50/oz of silver and $1850/oz of gold. The initial capital cost was $373 million, and sustaining capital was $65 million. The base case yielded a 25.6% IRR with a 2.1-year payback.AbraSilver plans to advance the project towards the completion of a feasibility study in 2026, which is expected to incorporate the results of 20,000m of ongoing drilling.
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