Altaley Mining Corporation (TSX-V:ATLY) has unveiled the positive results of an updated pre-feasibility study (PFS) for its Tahuehueto gold and base metal mine in Mexico, where initial pre-production is poised to begin in March this year.
Construction of the project is now over 95% complete, with just US$6 million left to invest, of a total capital cost of US$56.9 million, to kick off output at throughput of 1,000 tonnes per day (tpd).
That leads to a pre-tax net present value (NPV) for the 10.9 year life-of-mine (LOM) asset of US$152.8 million.
"The disclosure of the 2022 PFS economics, updated reserve and resource estimation, along with our anticipated March startup of pre-production operations at Tahuehueto, are the culmination of many years of hard work by the Altaley team and as our Tahuehueto mine ramps up to full production during Q2-Q3 2022, increased cash flow will allow Altaley to recommence exploration drilling and unlock the ultimate potential of our Tahuehueto district scale project," said Ralph Shearing, Altaley Mining CEO in a statement.
READ: Red Cloud Securities initiates coverage of Altaley Mining with a Buy recommendation
The PFS was prepared by independent consultants Resource Development Associates and shows total ore processed of 3.55 million tonnes with a life-of-mine all-in-sustaining-costs (AISC) of US$844 per gold equivalent ounce at US$1,647.52 per ounce gold, US$21.64 per ounce silver, US$0.92 per pound lead, US$1.14 per pound zinc and US$3.60 per pound of copper.
The report is based on an underground operation using contractor mining in a combination sub-level long hole open stope and cut and fill mining methods.
Mill feed will be processed in a 1,000 tpd comminution circuit consisting of primary and secondary crushing, wet grinding to an initial two-circuit flotation/concentration plant producing precious metal-rich lead and zinc concentrates and subsequently, in the second year of operation. a third circuit will be added to produce copper concentrates.
The report uses an updated estimate showing proven and probable reserves of 3.58 million tonnes grading 2.55 grams per ton (g/t) gold, 50.06 g/t silver, 1.92% zinc, 1.11% lead and 0.26% copper.
Altaley also noted that there were 'significant' opportunities exist to expand resources and reserves with near mine and regional exploration and is plans to "aggressively pursue exploration as soon as free cash flows allow or alternative funding is secured".
The Tahuehueto mine sits 250 kilometres (km) northwest of the city of Durango and 25 km north of the Topia polymetallic-silver mine, 48 km northwest of the La Cienega gold, silver, base metal mine and 150 km northwest of the San Dimas mining district, most notable for the Tayoltita silver and gold mine.
Altaley also operates the Campo Morado polymetallic base metal mine, which is currently producing at an average of 2,200 tpd and is currently estimated to be Mexico's sixth-largest zinc producer.
Contact the author at giles@proactiveinvestors.com