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 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
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. 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
(US$k)
Expansion
(US$k) 1
Sustaining
(US$k)
Total
(US$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
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
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
The VRIFY Slide Deck and 3D Presentation for Silver Tiger Metals Inc. can be viewed at: https://vrify.com/explore/decks/492 and on the Corporation's website at: www.silvertigermetals.com.
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
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.