Altaley Mining Corporation (TSX-V:ATLY) has unveiled an updated preliminary feasibility study (PFS) for its Tahuehueto gold and base metal mine in Mexico, which, it said, has improved the overall economics of the project by 30% compared to the release in March this year.
The March 7, 2020, disclosure contained errors related to net smelter return calculations that under-estimated the mine's economics, said the company.
The pre-tax net present value (NPV) for the 10.9 year life-of-mine asset is now pegged at US$234.4 million, compared to US$152.8 million this March, while the internal rate of return (IRR) is 65.5%, up from 45%. The payback period is down to 2 years, from 2.58 years previously.
The total capital cost for the mine remains at US$56.9 million to kick off output at throughput of 1,000 tonnes per day (tpd), while the total net smelter return for lead, zinc, gold, silver and copper is lifted to US$645.4 million compared to US$533.1 million in the earlier report this year. The pre-tax net cash flow is put at US$352.5 million, up from US$240.9 million.
READ: Altaley Mining reports updated PFS for Tahuehueto mine ahead of pre-production due to start this month
The project construction is now over 95% complete and initial pre-production is targeted during April this year, Altaley Mining noted.
"As our Tahuehueto gold mine project construction nears completion we are happy to disclose final results of the project's updated pre-feasibility study which continues to show robust economics," Ralph Shearing, the company's CEO said in a statement.
"The disclosure and filing on SEDAR of the updated PFS and reserve and resource estimation, along with our anticipated May 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," he added.
Proven and probable reserves for the project are 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's Tahuehueto mining project is in north-western Durango State, Mexico. It lies around 25 kilometres (km) north of the Topia polymetallic-silver mine, 48 km northwest of the La Cienega gold, silver, base metal mine, 85 km southwest of the Guanacevi silver district, 280 km southeast of the Palmarejo silver and gold mine, and 150 km northwest of the San Dimas mining district, most notable for the Tayoltita silver and gold mine.
The company's Campo Morado property is an operating polymetallic base metal mine with mining and milling equipment currently producing at an average of 2,200 tonnes per day and is currently estimated to be Mexico's 6th largest zinc producer.
Contact the author at giles@proactiveinvestors.com