RCS - Silver Tiger Metals - Silver Tiger Announces PEA With NPV of US$287M
02/11/2023 02:15
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RNS Number : 0781S Silver Tiger Metals Inc 01 November 2023
Silver Tiger Announces PEA With NPV of US$287M for the Open Pit Portion of El
Tigre Silver-Gold Project
HALIFAX, NS / ACCESSWIRE / November 1, 2023 / Silver Tiger Metals Inc.
(TSXV:SLVR)(OTCQX:SLVTF) ("Silver Tiger" or the "Corporation") is pleased to
announce a Preliminary Economic Assessment ("PEA") for its 100% owned,
silver-gold El Tigre Project (the "Project" or "El Tigre") located in Sonora,
Mexico. The PEA is centered on the conventional open pit mining economics of
the Stockwork Mineralization Zone defined in the updated MRE released
September 12, 2023 (Figure 1).
Highlights of the PEA, with a base case silver price of $23.75/oz and gold
price of $1,850/oz are as follows (all figures in US dollars unless otherwise
stated):
· After-Tax net present value ("NPV") (using a discount rate of 5%)
of US$287 Million with an After-Tax IRR of 55.8% and Payback Period of 1.7
years (Base Case);
· 13-year mine life recovering a total of 60 Million payable silver
equivalent ounces ("AgEq") or 776,000 gold equivalent ounces ("AuEq"),
consisting of 16 Million silver ounces and 571,000 gold ounces;
· Total project undiscounted after tax cash flow of US$445 Million;
· Initial capital costs of $59 Million, including $7.7 Million in
contingency costs, over an expected 12-month build, expansion capital of $33
Million and sustaining capital costs of $31 Million over the life of mine
("LOM");
· Average LOM operating cash costs of $803/oz AuEq, and all in
sustaining costs ("AISC") of $843/oz AuEq or Average LOM operating cash costs
of $10/oz AgEq, and all in sustaining costs ("AISC") of $11/oz AgEq; and
· Average annual production of approximately 4.6 Million AgEq oz or
59,000 AuEq oz.
Glenn Jessome, President & CEO stated "We are very pleased with the work
completed by our consultants and our technical team on the PEA for the open
pit at El Tigre. The open pit delivers robust economics with an NPV of US$287
million and substantial after tax cash flows of US$445 million." Mr. Jessome
continued "This is a pivotal point for our Company as we now have a clear path
forward to quickly completing a PFS and making a construction decision for the
open pit. The open pit has good grade, low strip, wide benches and exceptional
metallurgy. With such positive parameters and with our new VP of Operations
Francisco Albelais, a career expert in the construction of large heap leach
mines in Mexico, we are confident we will be able to advance the open pit
portion of the project very quickly." Mr. Jessome concluded "The open pit is
only one component of El Tigre as we have also recently delivered over
90-million silver equivalent ounces in the underground in the Mineral Resource
Estimate and disclosed an Exploration Target establishing 7 to 9 million
tonnes at 225 to 265 g/t AgEq for 50 to 75 million silver equivalent ounces.
The Company will also continue to work on this substantial underground Mineral
Resource and advance that towards a PEA."
Figure 1: El Tigre Mineral Resource Block Model 3D Visualization, showing pit
constrained Resources.
Preliminary Economic Assessment Summary
The PEA was prepared by independent consultants Micon International Limited
("Micon"), with metallurgical test work completed by SGS Canada Inc.'s
Lakefield office ("SGS") and process plant design and costing by D.E.N.M.
Engineering Ltd., and environmental and permitting led by CIMA Mexico.
Following are tables and figures showing key assumptions, results, and
sensitivities.
Table 1: El Tigre PEA Key Economic Assumptions and Results
Assumption / Result Unit Value Assumption / Result Unit Value
Total OP Plant Feed Mined kt 57,038 Net Revenue US$M 1,422
Operating Strip Ratio Ratio 2.0 Initial Capital Costs US$M 59
Silver Grade (1) g/t 14.27 Expansion Capital Costs US$M 33
Gold Grade (1) g/t 0.39 Sustaining Capital Costs US$M 31
AuEq Grade (1) g/t 0.57 Mining Costs - Plant $/t Feed 5.81
Silver Recovery (2) % 61 Mining Costs - Material $/t Material 1.91
Gold Recovery (2) % 80 Processing Costs $/t Feed 4.46
Silver Price US$/oz 23.75 G&A Costs $/t Feed 0.61
Gold Price US$/oz 1,850 Operating Cash Cost US$/oz AuEq 803
Payable Silver Metal Moz 15.9 All in Sustaining Cost US$/oz AuEq 843
Payable Gold Metal koz 571 After-Tax NPV (5% discount) US$M 287
Payable AuEq koz 776 Pre-Tax NPV (5% discount) US$M 420
Mine Life Yrs 13 After-Tax IRR % 55.8
Average mining rate t/day 36,000 Pre-Tax IRR % 79.4
After-Tax Payback Period Yrs 1.7
1. Grades shown are LOM average process plant feed grades include only OP
sources. Mining losses of 2.5% and external dilution of 2.5% with low grade
waste for OP material was incorporated in the mining schedule.
2. Column testing indicated both higher and gold and silver recovery (83%
and 64%) at a 3/8-in crush size. In the process design and financial model,
these have been discounted by 3% for leaching in the field versus optimum
conditions in the laboratory.
Figure 2: El Tigre Cash Flow Profile by Year
Figure 2 above highlights the post-tax cash flows of US$445 Million associated
with the El Tigre Project. The economics of the project have been evaluated
based on the base case scenario $23.75/oz silver price and gold price of
$1,850/oz. As illustrated in the following sensitivity tables, the project
remains robust even at lower commodity prices or with higher costs.
Table 2 - El Tigre PEA Gold and Silver Price Sensitivities
Sensitivity Base Case
Silver Price (US$/oz) 17 19 21 23.75 26 30 33
Gold Price (US$/oz) 1,324 1,480 1,636 1,850 2,025 2,337 2,571
After-Tax NPV (5%) (US$M) 108 161 214 287 347 453 532
After-Tax IRR (%) 28.3 37.2 45.3 55.8 64.1 78.5 88.9
After-Tax Payback (years) 4.1 2.6 2.0 1.7 1.5 1.3 1.1
Table 3 - El Tigre PEA Operating Cost and Capital Cost Sensitivities
Sensitivity -20% -10% Base Case 10% 20%
Operating Costs - NPV (US$M) 345 316 287 258 229
Operating Costs - IRR (%) 64.4 60.1 55.8 51.5 47.2
Capital Costs - NPV (US$M) 301 293 287 280 273
Capital Costs - IRR (%) 68.0 61.3 55.8 51.2 47.3
Capital and Operating Costs
The El Tigre Project has been envisioned as an open pit mining operation
starting at a processing rate of 7,500 tonnes per day for years 1-3 and then
ramping up to 15,000 tonnes per day by year 5 after 1 year construction for
ramp up.
The process plant is comprised of conventional three (3) stage crushing to an
optimum -3/8-in crush size. The crushed material will be conveyed and loaded
on the lined pad areas. A series of pumping and piping will allow irrigation
of the stacked heap material and subsequent production of pregnant solution to
flow to the respective impoundment pond. The pregnant solution will be pumped
to the recovery facility consisting of the Merrill - Crowe process (zinc
precipitation) and refinery to produce the gold and silver dore for marketing.
The process barren solution will be recycled (with NaCN addition) and pumped
back to the heap for further leaching.
Water supply to the process plant is provided by nearby surface wells and a
new high voltage grid power will be installed by the local utility to supply
process and infrastructure power requirements. Expansion capital includes the
cost to increase the process plant capacity from 7,500 tonnes per day to
15,000 tonnes per day as noted.
Table 4 - LOM Capital Cost Estimate
Type Initial Expansion Sustaining Total
(US$k)
(US$k) (1)
(US$k)
(US$k)
Plant direct costs 31,921 25,800 57,721
Mining direct costs 5,340 3,250 30,924 39,514
Pre-stripping 2,347 2,347
Infrastructure 9,470 9,470
Project indirect costs 2,200 2,200
Total 51,278 29,050 30,924 111,252
Contingency (15%) 7,692 4,358 12,049
Total - Initial Capital 58,969 33,408 30,924 123,301
1. Expansion capital is not included in AISC calculations
Mining
Open pit mining will be contracted and carried out by drill and blast followed
by conventional loading and truck haulage to the waste rock storage facilities
and the process plant.
Metallurgy
A preliminary metallurgical test program was carried out by SGS Lakefield of
Ontario, Canada on open pit samples. Details of the testing were outlined in
the previous Sliver Tiger News Release dated August 24, 2023. The program
included crushing, coarse bottle rolls, and composite column testing at both
3/8-in and 1/2 -in crush size. The leach samples comprised of drill core
sample representing the Stockwork Mineralization Zone of the Mineral Resource.
This preliminary test program estimated average gold and silver respective
metallurgical recoveries of 83.1 % Au and 64.3 % Ag at the 3-/8-in crush.
Percolation testing also indicated no requirement for agglomeration of the
crushed material is required prior to loading.
Underground Mineral Resource
As previously released, the Company will also continue to work on this
substantial underground Mineral Resource and advance that towards PEA.
Out-of-Pit Mineral Resources at El Tigre of 21 Moz AgEq grading 279 g/t AgEq
contained in 2.3 Mt and 70 Moz AgEq grading 235 g/t AgEq contained in 9.2 Mt
(Table 5). For higher grade sensitivity cases refer to updated MRE release
dated September 12, 2023.
Table 5 - Mineral Resource Estimate released September 2023
1. Mineral Resources which are not Mineral Reserves, do not have
demonstrated economic viability. The estimate of Mineral Resources may be
materially affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues.
2. The Inferred Mineral Resource in this estimate has a lower level of
confidence than that applied to an Indicated Mineral Resource and must not be
converted to a Mineral Reserve. It is reasonably expected that the majority of
the Inferred Mineral Resource could be upgraded to an Indicated Mineral
Resource with continued exploration.
3. The Mineral Resources in this news release were estimated in accordance
with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM
Standards on Mineral Resources and Reserves, Definitions and Guidelines (2014)
prepared by the CIM Standing Committee on Reserve Definitions and adopted by
the CIM Council and CIM Best Practices (2019).
4. Historically mined areas were depleted from the Mineral Resource model.
5. Approximately 74.7% of the Indicated and 22.3% of the Inferred
contained AgEq ounces are pit constrained, with the remainder out-of-pit. See
tables 2 and 3 for details of the split between pit constrained and out-of-pit
deposits.
6. The pit constrained AuEq cut-off grade of 0.14 g/t was derived from
US$1,800/oz Au price, US$24/oz Ag price, 80% process recovery for Ag and Au,
US$5.30/tonne process cost and US$1.00/tonne G&A cost. The constraining
pit optimization parameters were $1.86/t mineralized mining cost, $1.86/t
waste mining cost and 50-degree pit slopes.
7. The out-of-pit AuEq cut-off grade of 1.5 g/t AuEq was derived from
US$1,800/oz Au price, US$24/oz Ag price, $4.00$/lb Cu, $0.95 $/lb Pb, $1.40
$/lb Zn, 85% process recovery for all metals, $50/t mining cost, US$20/tonne
process and US$4 G&A cost. The out-of-pit Mineral Resource grade blocks
were quantified above the 1.5 g/t AuEq cut-off, below the constraining pit
shell within the constraining mineralized wireframes and exhibited sufficient
continuity to be considered for cut and fill and long hole mining
8. The tailings AuEq cut-off grade of 0.30 g/t was derived from
US$1,800/oz Au price, US$24/oz Ag price, 85% process recovery for Ag and Au,
US$14/t process cost and US$1.00/t G&A cost.
9. No Mineral Resources are classified as Measured.
10. AgEq and AuEq calculated at an Ag/Au ratio of 75:1.
11. Totals may not agree due to rounding
Exploration Potential
Exploration potential at the El Tigre Project is substantial with prospective
areas for exploration both down dip and along strike with the disclosed target
establishing 7 to 9 Million tonnes at 225 to 265 g/t AgEq for 50 to 75 Moz
AgEq.
Figure 3-Exploration Potential released September 2023
Surface Rights Agreement
The Company owns royalty-free, 100% of the 6,238 hectares land-package
encompassing the footprint of proposed mining operation with no Ejido
presence. In addition, the company controls 28,414 hectares of Concessions to
conduct exploration along a 25 km strike length of the Sierra Madres.
Qualified Persons
This PEA was based on information and data supplied by Silver Tiger, and was
undertaken by William J. Lewis, B.Sc., P.Geo., Kerrine Azougarh, B.Sc., P.Eng.
and Christopher Jacobs, CEng, MIMMM, MBA of Micon International Limited. Of
Toronto, Ontario, and David J. Salari, P. Eng. of D.E.N.M. Engineering Ltd are
the Qualified Persons as defined under National Instrument 43-101. All
Qualified Persons have reviewed and approved the scientific and technical
information in this press release.
A Technical Report is being prepared on the Preliminary Economic Assessment in
accordance with National Instrument 43-101 ("NI-43-101"), and will be
available on the Company's website and SEDAR within 45 days of the date of
this news release. The effective date of this Preliminary Economic Assessment
is November 1, 2023.
VRIFY Slide Deck and 3D Presentation - Silver Tiger's El Tigre Project
VRIFY is a platform being used by companies to communicate with investors
using 360° virtual tours of remote mining assets, 3D models and interactive
presentations. VRIFY can be accessed by website and with the VRIFY iOS and
Android apps.
Access the Silver Tiger Metals Inc. Company Profile on VRIFY at:
https://vrify.com (https://pr.report/f0xu8Nk7)
The VRIFY Slide Deck and 3D Presentation for Silver Tiger Metals Inc. can be
viewed at: https://vrify.com/explore/decks/492 (https://pr.report/mv-xRs29)
and on the Corporation's website at: www.silvertigermetals.com
(https://pr.report/ef7E1YHL) .
About Silver Tiger and the El Tigre Historic Mine District
Silver Tiger Metals Inc. is a Canadian company whose management has more than
25 years' experience discovering, financing and building large epithermal
silver projects in Mexico. Silver Tiger's 100% owned 28,414 hectare Historic
El Tigre Mining District is located in Sonora, Mexico. Principled
environmental, social and governance practices are core priorities at Silver
Tiger.
The El Tigre historic mine district is located in Sonora, Mexico and lies at
the northern end of the Sierra Madre silver and gold belt which hosts many
epithermal silver and gold deposits, including Dolores, Santa Elena and Las
Chispas at the northern end. In 1896, gold was first discovered on the
property in the Gold Hill area and mining started with the Brown Shaft in
1903. The focus soon changed to mining high-grade silver veins in the area
with production coming from 3 parallel veins the El Tigre Vein, the Seitz
Kelley Vein and the Sooy Vein. Underground mining on the middle El Tigre Vein
extended 1,450 metres along strike and was mined on 14 levels to a depth of
approximately 450 metres. The Seitz Kelley Vein was mined along strike for 1
kilometre to a depth of approximately 200 meters. The Sooy Vein was only mined
along strike for 250 metres to a depth of approximately 150 metres. Mining
abruptly stopped on all 3 of these veins when the price of silver collapsed to
less than 20¢ per ounce with the onset of the Great Depression. By the time
the mine closed in 1930, it is reported to have produced a total of 353,000
ounces of gold and 67.4 Million ounces of silver from 1.87 Million tons
(Craig, 2012). The average grade mined during this period was over 2 kilograms
silver equivalent per ton.
For further information, please contact:
Glenn Jessome
President and CEO
902 492 0298
jessome@silvertigermetals.com (mailto:jessome@silvertigermetals.com)
CAUTIONARY STATEMENT:
Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this news release.
This News Release includes certain "forward-looking statements". All
statements other than statements of historical fact included in this release,
including, without limitation, statements regarding potential mineralization,
Mineral Resources and Reserves, the ability to convert Inferred Mineral
Resources to Indicated Mineral Resources, the ability to complete future
drilling programs and infill sampling, the ability to extend Mineral Resource
blocks, the similarity of mineralization at El Tigre to Delores, Santa Elena
and Chispas, exploration results, and future plans and objectives of Silver
Tiger, are forward-looking statements that involve various risks and
uncertainties. Forward-looking statements are frequently characterized by
words such as "may", "is expected to", "anticipates", "estimates", "intends",
"plans", "projection", "could", "vision", "goals", "objective" and "outlook"
and other similar words. Although Silver Tiger believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, there can be no assurance that such statements will prove to be
accurate and actual results and future events could differ materially from
those anticipated in such statements. Important factors that could cause
actual results to differ materially from Silver Tiger's expectations include
risks and uncertainties related to exploration, development, operations,
commodity prices and global financial volatility, risk and uncertainties of
operating in a foreign jurisdiction as well as additional risks described from
time to time in the filings made by Silver Tiger with securities regulators.
SOURCE: Silver Tiger Metals Inc.
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