Production
Preliminary Economic Assessment provides robust economics
In June, 2009 ACA Howe carried out a Preliminary Economic Assessment on the economic viability of contract mining and toll milling on three of the seven currently demarcated resource blocks on the San José property. The conclusion stated that to enter a period of contract mining, is an achievable and realistic strategy, based on US$14 Ag/oz.
Highlights of the study include
• Mining and milling of approximately 500,000 tonnes of resources estimated to exploit approximately 2.15 million oz of silver, 1,800 tonnes of lead and 3,100 tonnes of zinc
• Assuming US$14/oz Ag
• NPV -- Undiscounted: US$17 million, assuming US$14/oz Ag
• NPV -- 8% Discount Rate US$ 13.4 and US$14 per ounce Silver price
• Payback period less than one year
• Pre-Tax Internal Rate of Return (IRR) estimated at 160%.
• Up to four years of contracted mechanized mining, with concurrent exploration and development on the rest of the property (sublevel open stoping)
Excellent infrastructure in place:
• Power (upgradeable 3-Ph off main Grid with step-down transformer)
• Transportation
• Access to water
• Access to mining and milling equipment
• Access to workers
• A pro-mining region.
