Mineral & Financial Investments Ltd (AIM:MAFL) (MFI) said the feasibility study published today for Lagoa Salgada confirms a "solid, economically robust [zinc] project with significant expansion potential".
Partner Ascendant commissioned the study, which showed a post-tax net present value of US$147mln, a 39% internal rate of return and cashflow of US$56mln in the first five years based on 124mln pounds of zinc a year of production.
Upfront capital expenditure is estimated at US$164mln with sustaining costs at US$0.59/lb.
MFI said the report also included significant upgrades to the resources at the project including an inaugural value for the North Zone.
As a result of publishing the study, Ascendant can take an 80% stake in the project.
Jacques Vaillancourt, chief executive, commented: "We are very pleased that Ascendant has completed this initial feasibility study for the Venda Nova deposit at Lagoa Salgada.
“It is the first comprehensive study encompassing all areas of operation required for the commercialization of Lagoa Salgada, which remains a discovery project with significant further upside potential expected as we optimize these results and continue to expand the resource base.
“Given the nature of VMS deposits to occur in clusters, especially in the Iberian Pyrite Belt, we see evidence of potential for several more deposits to be defined in the coming years to enhance the overall value proposition at Lagoa.”