Apollo Silver (TSXV: APGO) has released a preliminary economic assessment for its Calico silver project in California, outlining a 15-year open pit operation that would produce about 5 million ounces of silver per year.
The study puts Calico’s after-tax net present value, at a 5% discount rate, at US$737 million, with an after-tax internal rate of return of 25% and a payback period of 3 years. Those figures assume a base case silver price of US$55 per ounce. On a pre-tax basis, the project carries an NPV of US$925 million and an IRR of 29%.
At US$65 silver, the after-tax NPV rises to US$1.11 billion with an IRR of 32%. A US$45 price case cuts it to US$348 million and 16%.
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The mine plan is built around the Waterloo deposit, where contract open pit mining would feed an 8,000 tonne per day mill and cyanide leach circuit that produces doré on site. Over the life of mine, the operation is expected to process roughly 42 million tonnes at an average diluted grade of 84.8 g/t silver, recovering 74.4 million ounces at a 65% recovery rate with a strip ratio of 0.5 to 1.
Higher grade material is front loaded, with the first 10 years averaging 100.8 g/t silver while lower grade feed is stockpiled for processing later in the mine life.
Initial capital is estimated at US$633 million, including a 25% contingency. Sustaining capital, pit backfilling and closure costs bring the total to US$715 million. Life of mine cash costs come in at US$24.96 per payable ounce and all-in sustaining costs at US$26.07 per ounce, leaving a margin of roughly US$29 per ounce against the base case price.
The economics rest on an updated resource of 115.6 million ounces of measured and indicated silver at Waterloo, about 76% of which falls in the measured category. The Langtry deposit and its 49.1 million inferred ounces sit outside the mine plan entirely, as does a small gold domain at Waterloo.
President and CEO Colin Sutherland noted that the base case “does not yet draw on Langtry’s 49 million Inferred ounces.” He also pointed to Waterloo’s position on private land with vested surface mining rights, adding that the project would produce doré domestically at a time when silver sits on the U.S. critical minerals list.
Apollo now plans to run metallurgical variability and optimization testwork, complete geotechnical and metallurgical drilling, secure water rights within the Mojave Basin, and confirm a power interconnection. Environmental baseline studies are slated for 2027 as the company works toward a prefeasibility study.
Apollo Silver last traded at $1.91 on the TSX Venture.
