Discovery Silver (TSXV: DSV) this morning reported a preliminary economic assessment for its Cordero Silver Project, which is found in the Chihuahua State of Mexico. The project is said to have an after-tax net present value of US$1.2 billion.
The projected NPV is based on a 5% discount, with a bae case of $22.00 per ounce silver, and $1,600 per ounce gold. The IRR of the project is estimated at 38% based on the base case scenario. That NPV is expected to climb to $1.9 billion if silver were to climb to $27.50, and gold to $1,880, representing an IRR of 55%.
The projections are based on a large scale mine, with a mine life of 16 years. Annual production is slated for 26 million ounces of silver equivalent, with an AISC of $12.35 per ounce of silver equivalent. Payback meanwhile is estimated at 2.0 years for the base case, with initial CAPEX of $368 million.
Mine life has the potential to be expanded as well, with over 300 Mt of sulphide resources not included in the design pit, but are found within the resource pit shell. The project has a whole currently has a sulphide resource of 837 million ounces of silver equivalent on a measured and indicated basis at an average grade of 46 g/t, as well as an inferred resource of 119 million ounces of silver equivalent at 34 g/t.
An additional oxide resource of 74 million ounces of silver equivalent at 23 g/t on a measured and indicated basis, as well as 22 million ounces at a grade of 18 g/t on an inferred basis exists for the property.
A prefeasibility study is slated to be completed on the project in 2022, with the company viewing the project as a Tier 1 silver asset.
Discovery Silver last traded at $1.81 on the TSX Venture.
Information for this briefing was found via Sedar and Discovery Silver. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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