Southern Silver Exploration Corp (TSX-V:SSV, OTCQX:SSVFF) unveiled promising results from its preliminary economic assessment (PEA) of the Cerro Las Minitas project.
The PEA highlights robust project economics, with a base case scenario showcasing an after-tax NPV5% of $501 million (C$682 million) and an internal rate of return (IRR) of 21.2%, indicating a 48-month payback period.
Furthermore, a 20% increase in metal prices reveals an even stronger NPV5% of $876 million (C$1.19 billion) and an IRR of 30.1%.
Key features of the 2024 PEA include a large-scale underground mining operation with a 17-year mine life, high revenue projections totaling $4.47 billion, and an initial capital expenditure of $388 million. Additionally, significant improvements over the 2022 economic model include increased life of mine production, daily mine production capacity, extended mine life, and enhanced revenue and NPV5%.
The PEA update is “a new milestone in the ongoing evolution and development of the project,” Southern Silver CEO Lawrence Page told investors.
Page told shareholders that the PEA is the culmination of several technical improvements, developed over the last 18 months, which resulted in a “significant increase in the value” of the asset.
The improvements include incorporating new mineral resources from the North Felsite zone, as initially disclosed in March 2023, standardizing metallurgical recoveries and charges across all deposits, which now include gold revenues, and enhancing mine scheduling and optimization to improve both operating and capital costs of the project.
"Since acquisition of the property in 2010 and subsequent identification of the mineral resources, a very profitable and valuable mine has been modelled in the results of the PEA disclosed today,” Page said in a statement.
“Total acquisition, exploration and development costs are approximately US$28 million and significantly, the property is not burdened with royalties, presenting potential financing opportunities for additional drilling and development work on the property. This presentation of the results of the PEA marks a significant milestone in the development of the property and the best is yet to come."
Cerro Las Minitas spans around 34,450 hectares across 25 concessions within the prominent Faja de Plata (Belt of Silver) in north central Mexico.
Renowned as one of the world's foremost silver-producing regions, the belt boasts extensive reserves/resources and a rich historical production exceeding three billion ounces of silver.