AbraSilver Resource Corp (TSX: ABRA) has unveiled a definitive feasibility study for its Diablillos silver-gold project, framing the asset as one of the more compelling undeveloped precious metals stories in the sector.
The study assigns Diablillos an after-tax net present value of US$3.0 billion, or CAD$4.2 billion at a 5% discount rate, alongside a 41.9% internal rate of return and a payback period of 1.7 years. Those figures rest on base-case prices of US$50.00 per ounce of silver and US$3,650 per ounce of gold.
Run the numbers at spot prices, which at the time of study were US$70.69 silver and US$4,338 gold, and the after-tax NPV climbs to US$4.8 billion, with the IRR widening to 56.5% and the payback shrinking to 1.4 years.
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The proposed operation is a conventional open pit mine that feeds a 9,000 tonne per day processing plant over a 25 year mine life, with a strip ratio of 5.9 to 1. The mine plan front-loads higher grade material, stockpiling lower-grade ore for processing from year 18 onward.
Average recoveries are pegged at 80.3% for silver and 87.2% for gold.
Diablillos is expected to average 20.3 million ounces of silver equivalent annually over the first five years, comprising 13.9 million ounces of silver and 89,000 ounces of gold, before settling to a life-of-mine average of 10.3 million ounces of silver equivalent, made up of 5.9 million ounces of silver and 62,000 ounces of gold.
All-in sustaining costs average US$19.98 per ounce of silver equivalent across the mine life, a figure the company says ranks Diablillos among the lowest-cost primary silver projects anywhere. A cash cost figure was not provided.
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Building it carries an initial price tag of US$722 million, including a US$98 million contingency, with a further US$520 million in sustaining capital expected to come out of operating cash flow. The resulting NPV-to-capital ratio sits at a multiple of 4.2 times.
The study also lifted proven and probable reserves to 77.9 million tonnes grading 146 g/t silver equivalent, holding 183 million ounces of silver and 1.8 million ounces of gold.
President and CEO John Miniotis called the results the product of years of technical work, describing Diablillos as “a high-margin silver-gold project of significant scale with a clear path to construction.” He stressed that the DFS reflects a Phase 1 base case rather than a ceiling, pointing to a heap leach addition, plant expansion and continued drilling as further levers.
On timing, early works are slated to begin in the third quarter of 2026, with project financing targeted for the fourth quarter and a final investment decision expected in the second quarter of 2027. First production is targeted before the end of 2029.
A proposed heap leach expansion is also expected to see a PEA released before the end of June, and a 15,000-metre Phase VI drill program is underway.
AbraSilver Resource Corp last traded at $13.90 on the TSX.
