Technical Reports

A Preliminary Economic Assessment (PEA) for the Ayawilca Zinc Zone was released July 2, 2019. The PEA provided an initial economic study for an underground ramp-access mine development of the Zinc Zone deposit using room and pillar and post pillar mining at a throughput of 5,000 tonnes per day. The Ayawilca Tin Zone and the Colqui Silver Zone resources were not considered in the PEA.

The PEA was prepared in accordance with NI 43-101 by Amec Foster Wheeler Peru S.A. ("Wood") as principal consultant, Transmin Metallurgical Consultants, and Roscoe Postle Associates Inc. ("RPA"). We encourage readers to review the full NI 43-101 technical report which was filed on August 15, 2019, and can be downloaded under the Company’s profile on or from the Company’s website (link to technical report). The Report is entitled "Ayawilca Polymetallic Project, Department of Pasco, Central Peru - NI 43-101 Technical Report".

Key highlights of the PEA include:

  1. After-tax net present value "(NPV")8% of US $363 million and pre-tax NPV8% of US $609 million for the Ayawilca Zinc Zone (using metal prices of US $1.20/lb zinc, US $18/oz silver, and US $0.95/lb lead at an NSR cut-off of US $ 65 per tonne).
  2. Initial capex of US $262 million with after-tax IRR of 27.1% and pre-tax IRR of 37.2%.
  3. A 21-year mine life with life of mine (“LOM”) head grades of 6.05% zinc, 18.3 g/t silver and 0.25% lead.
  4. Average annual production of approximately 101,000 tonnes of zinc recovered in concentrate and approximately 906,000 ounces of silver in a silver-lead concentrate.
  5. The PEA mine plan extracted 72% of the base case Indicated Mineral Resources and 66% of the base case Inferred Mineral Resources.
  6. Leverage to zinc price: a 20% increase in zinc price increases after-tax NPV8% to US $606 million.
  7. Indium, while occurring in high concentrations in the zinc concentrate, was not considered a payable metal in the PEA with the exception of a reduced treatment charge assumption in concentrates shipped to Asia.

Note: The PEA is preliminary in nature and 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 PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

Summary of 2019 Ayawilca Zinc PEA Results

PEA Financial Summary



NPV (8% discount rate)

Internal Rate of Return (“IRR”)

Payback period

US $609,000,000


2.2 years

US $363,000,000


3.1 years

Pre-production capital expenditure (Capex)(1)

Sustaining Capex

LOM Capex

Closure Cost (5.0% of LOM Capex)

US $261,900,000

US $144,600,000

US $406,500,000

US $20,300,000

Notes: (1) Includes contingencies of US $45,000,000.

PEA Operating Summary


Processing plant throughput

Average annual zinc concentrate production

Average annual lead-silver concentrate production

Average annual silver in lead concentrate

Net Smelter Return (“NSR”) from zinc and lead concentrates

5,000 t/day

201,500 dmt/year

7,570 dmt/year

905,700 oz/year

US $4,002,000,000

Mining costs

Processing costs

General and administration costs

Total operating costs (Opex)

US $36.66/t

US $6.44/t

US $5.48/t

US $48.57/t

Notes: dmt = dry metric tonne

PEA Metal Prices, Cut-off, and Other Assumptions

Input value

Zinc Price

Lead Price

Silver Price

NSR Cut-off value

US $1.20/lb

US $0.95/lb

US $18/oz

US $65/t

Total material processed (LOM)

38,200,000 tonnes

Mine Life

21.1 years

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