Silver recoveries are expected to rise to 77% from 69%; zinc production would not be affected by the additional cell, though lead recoveries would jump to 89% from 75%.
As a result of the increased recoveries, average annual production in the first five years of mining is now projected to reach 27 million oz. silver and 570 million lbs. zinc. Also, cash operating costs should fall more than 20%, to US$1.23 per oz. silver and US23 per lb. zinc. Life-of-mine costs should average US$1.83 per oz. silver and US27 per lb. zinc. The capital cost of installing the fourth column cell is pegged at US$9 million.
According to a feasibility study, construction costs at the project are expected to be US$413 million. However, the company states that if higher oil prices persist, fuel costs could add as much as US$5 million to the construction cost.
Apex is considering using contract mining for the life of the operation.
Reserves stand at 240 million tonnes grading 62 grams silver per tonne, 1.67% zinc and 0.58% lead, equivalent to 470 million oz. silver, 8.8 million lbs. zinc and 3.1 billion lbs. lead.
A condition of the project financing is that most of the lead and zinc concentrates be placed under long-term contracts. Toward that end, Apex has signed letters of intent with smelters throughout the world for 90% of the mine’s concentrates.
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