ugg australia bag Files Technical Report on Positive PEA at the Zgounder Silver Mine in Morocco
MONTREAL, QUEBEC (Marketwired Feb. 22, 2018) Maya Gold Silver Inc. (“Maya” or the “Corporation”) (TSX VENTURE:MYA) is pleased to announce that it has filed on SEDAR a Technical Report in compliance with National Instrument 43 101 (NI 43 101) to support the mineral resources estimates declared on January 8th and the PEA declared on February 5th 2018.
This press release confirms the February 5th disclosure.
The Corporation presents the results of an independent NI 43 101 Preliminary Economic Assessment Study (“PEA”) on its Zgounder Silver Mine in Morocco. (ZMSM), a Maya 85% owned joint venture with l’Office National des Hydrocarbures et des Mines of the Kingdom of Morocco (15%). The PEA Study, prepared by GoldMinds Geoservices Inc. from Qu City (GMG), is dated January 30th 2018 and relies on mineral resource estimates reported on January 8th 2018.
Maya started the first diamond drilling program at Zgounder in April 2015 and both the diamond drilling programs of 2015 and 2017 allowed Maya to increase the mineral resource estimates of Zgounder. The milling operations began in July 2014 and Maya announced the first silver pour in August 2014 with the production of the 20 silver ingots. Maya has produced a total of 1.35 million ounces of silver at its Zgounder mine as of December 2017.
Highlights of the Zgounder Silver Mine PEA Study:
A project life of 10 years with the current resources up to 2027;
ZMSM Internal Rate of Return of 134% and 118% after taxes;
ZMSM pre tax Net Present Value of US$215.1M (discounted at 6.5%) at variable silver price from US$17.50 to US$21.50 per ounce with yearly average of US$20.50 per ounce;
ZMSM after tax Net Present Value of US$200.2M (discounted at 6.5%) at variable silver price from USD$17.50 to USD21.5 USD per ounce with average of US$20.5 per ounce;
The extraction of 3.974Mt at 292 g/t Ag for silver production of 33.682M ounces;
Milling to increase to 500 tpd in 2018 then up to 2020 followed by a 2000 tpd in 2021;
Production increase to 1.354M ounces per year up to 4.762M ounces of silver per year;
Total operating cost of US $63.64 per tonne (averaged over the expected mine’s life);
Capex and sustaining capital requirements of US $46.9M
MAYA Internal Rate of Return of 121% with an NPV of US$209.86M;
The Zgounder PEA was prepared as combination of underground extraction, open pit extraction of mineralized material as well as reprocessing of old tailings based on the mineral resources reported on January 8, 2018.
The PEA is preliminary in nature and includes the use of 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. Thus, there is no certainty that the results stated in the PEA will be realized. Actual results may vary, perhaps materially. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Additional exploration work is required to increase the quality of the mineral resources.
Noureddine Mokaddem, President of Maya, stated: “These positive results of the PEA are an important milestone reached at the Zgounder silver mine. We are very excited to see such high NPV, a break even point before taxes of US$10.40/ounce Ag, well positions Zgounder to face severe commodity fluctuations. The financial results outlined in the PEA are highly encouraging, indicating the economic viability of the known resources and supports our belief that Zgounder is a robust project, and has the upward potential in inferred resources to grow into an important silver producer. These results will help Maya continue to scale and achieve its aspirations.”
Mineral Resource Used in the PEA
The NI 43 101 PEA Study was based on the undiluted mineral resource estimate prepared by GMG previously reported by Maya on January 8th, 2018. The table below summarizes the mineral resource estimated by GMG combining forty eight (48) envelopes and the old tailings.
A cut off grade of 61.89 g/t was applied for the in pit mineral resources and a cut off grade of 125 g/t was applied for the underground mineral resources (just under the pit surface).
Note: The internal shaft, main ramp with all major underground developments of the mine down to 1620m level are in the Capex sustaining capital. Provision for additional underground development is taken into account with a 20% waste development of mineralized material mined at year 2021 as it is currently at 10%.
The breakdown of the surface, mill and underground remaining capital cost expenditures (Capex) and sustaining capital to materialize the study is summarized in the following table. It is important to realize that the Zgounder project capital costs for the 500 tpd mill has already been paid with the mine revenues.
The sensitivity analysis suggests that the remaining capital cost has low impact on the economical results.
It is important to mention that operating costs are based on existing real cost adapted to up scaling scenarios. Moreover, the mill capital costs are based on real effective quotes received from Xinhai based in China. The 500 tpd mill is already on site and is being installed.
In addition to the capital cost needed of US $5,000,000 initially, there is an estimated amount of US $41,900,000 required for the sustaining capital included in the cash flow. No contingency on the Capex has been added, as it is a preliminary economic assessment with a +/ 30% precision.
The Zgounder Cash Flow after tax is positive every year from its own revenues except for year three, which will require financing, and with a payback of one year. The 500 tpd mill is uphill near the existing base camp, while the proposed new 2000 tpd mill should be installed south of the 2000m level entrance and the existing 200 tpd mill.
The Zgounder deposit assumes the processing of an average of 340 tpd for the first year (half at 187.5 tpd and half at 500 tpd), with an envisioned expansion to 500 tpd forecasted for two years and 2000 tpd for the remaining seven years of production.
The Zgounder deposit is located in competent rock and has a steep overall dip, making it easily mined using free falling methods. It is recommended to use the open long hole mining method with sub levels for the proposed new mining sites.