The scoping study determines that the project has a number of favorable characteristics:
Positive economics with excellent exposure to up-side silver prices
Well-defined resources open to expansion and convertible to reserves
75% of the PEA resource is contained in measured and indicated categories
Very straight forward construction and development
Produce metal dore on site so smelter contracts and concentrate shipping is not an issue
61.9M ounces of silver contained within resource were not included in the PEA plan but will likely be incorporated into an expanded operation or added to the end of the mine life given the current strengthening silver prices
Favorable infrastructure; power, access, and available water supply
A project site with ample space and favorable terrain for all the needed site facilities such as the heap leach pad, plant site and waste rock piles
Well-defined permitting path
The PEA is based upon mining assumptions derived from mine planning sequences completed by IMC and metallurgical test work performed by McClelland labs and reviewed by Resource Development Inc. The mining sequence derives ore from the higher-grade near surface parts of the deposit throughout the mine life and leaves 33.7 tonnes of measured and indicated tonnes of ore and 16.3 tonnes of inferred ore behind that could be produced by reduction of cutoff and extension to mine life should metal prices increase. The site infrastructure can easily be expanded to accommodate the inclusion of all the resources should economic conditions warrant the expansion of the project above what is shown in the PEA plan. All resource categories were used, including Inferred resources. Note that in the mine sequence, only 42.3M tonnes of the 92.3M contained in the global resource tonnes are processed.
Key Assumptions for the Santa Ana Project - Base Case
Item
Annual ore production - years 1 to end of life (tonnes)
3,600,000
Overall Process Recovery - Silver
70%
Total Processed Tonnes
42,350,000
Average Silver Grade (g/t)
56.7 g/t
Recovered ounces of silver (total)
54.0 million
Overall stripping ratio
2.0 to 1
Life of mine (processing) years
11.8
Sensitivity to silver prices
The following represents plus/minus 10% silver price variance:
Silver Price
IRR
NPV (7%)
$13
29%
$55M
$14.30
39%
$83M
$11.70
19%
$28M
Note: in accordance with NI43-101, mineral resources that are not mineral reserves do not have demonstrated economic viability. The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.
