#Canada #Vancouver #Silvercorp #Condor Gold #PEA

Silvercorp Metals Reports Positive Preliminary Economic Assessment for Condor Gold Project in Ecuador

Silvercorp Metals Inc., a Canadian mining company, has unveiled the results of its Preliminary Economic Assessment (PEA) for the Condor Gold Project located in Ecuador. This assessment indicates strong economic potential, driven by a substantial mineral resource estimate and favorable metal prices. The PEA evaluates the economic viability of the project based on updated geological block models and operational assumptions, culminating in promising forecasts for production and profitability.

Key Highlights of the PEA

The assessment outlines several key highlights:

• - Net Present Value (NPV): The project boasts an after-tax NPV at a 5% discount rate of approximately $522 million based on a base case with gold priced at $2,600 per ounce. In a more favorable scenario with near-spot prices of $4,300 per ounce for gold, the NPV skyrockets to around $1,559 million.
• - Internal Rate of Return (IRR): The project forecasts an impressive IRR of 29% at base case prices, and an exceptional 61% at higher, more optimistic price levels.
• - Mine Life and Production: The estimated mine life spans 13 years, with projected production of 1,375 thousand ounces of payable gold and 5,266 thousand ounces of payable silver, alongside notable quantities of zinc and lead.
• - Capital Costs: The initial capital investment required for the project is pegged at $292 million, with a payback period of three years post-commercial production.
• - Sustaining Costs: The average all-in sustaining cost is projected to be $1,258 per ounce of gold, benefiting from by-products such as silver and zinc.

Economic Analysis

The economic analysis suggests a robust financial outlook, with total estimated revenue reaching $3.623 billion over the life of the mine. The breakdown shows that gold will contribute around 93.4% of the net revenue, accentuating its significance in the overall mining operations. Furthermore, the assessments indicate that mining and processing costs, as well as taxes and royalties, have all been factored into the financial projections, providing a realistic view of the profitability.

The PEA recognizes that while the economic indicators are promising, the estimates are preliminary. Some inferred mineral resources are considered too speculative to classify as mineral reserves currently. Therefore, the realization of the projected outcomes remains uncertain, and further exploration and definitive feasibility studies will be essential.

Project Implementation Strategy

Silvercorp plans to conduct underground operations at the Condor project, utilizing contract mining to access the gold-rich deposits effectively. The ore will be processed through a carbon-in-pulp circuit integrated with gravity concentrators. The project strategy includes:

• - Utilizing a contract mining approach to leverage existing local expertise and resources.
• - Implementing a combined processing method of cyanidation and flotation to optimize recovery rates.
• - Ensuring efficient underground development by designing mining operations that align with the existing geological structure and minimizing costs.

Future Directions and Sustainability

In light of the PEA results, Silvercorp is moving forward with securing environmental permits necessary for mining operations. The environmental impact assessment has already been initiated, engaging with local communities to ensure sustainable practices and adherence to environmental safety standards. The company’s commitment to responsible mining is reflected in its ongoing efforts to uphold social and environmental governance (ESG) principles while maintaining profitability.

Conclusion

The Preliminary Economic Assessment for the Condor Gold Project showcases significant potential for Silvercorp Metals, with optimistic forecasts underscoring the project’s viability. As the company progresses with further explorations and prepares for the next stages of mining development, stakeholders remain hopeful for substantial returns on investment and sustainable resource management in Ecuador's promising mining landscape.