VANCOUVER — Soho Resources (SOH-V) has released the numbers from a preliminary economic assessment (PEA) on its Tahuehueto polymetallic project in Durango, Mexico.
The study looked at open-pit mining of the El Creston zone and underground mining at the Cinco de Mayo, El Creston and El Rey zones, producing copper, lead and zinc concentrates.
An early 2009 resource, on which the study was based, estimated 7.4 million measured and indicated tonnes grading 2.1 grams gold per tonne, 34.97 grams silver per tonne, 0.28% copper, 1.06% lead and 2.01% zinc. The project hosts a further 4.9 million inferred tonnes grading 1.06 grams gold, 31.77 grams silver, 0.23% copper, 1.23% lead and 2.26% zinc.
The economic assessment, meanwhile, estimated the potential mill feed over the 11-year mine life to be 9 million tonnes, with average grades of 1.64 grams gold, 28 grams silver, 0.18% copper, 0.87% lead and 1.64% zinc. The max processing rate was estimated at a million tonnes a year, or roughly 2,700 tonnes a day.
As to financials, the study set the net present value at US$109.6 million using a 5% discount rate, and the internal rate of return at 31%. Capital and start-up costs were pegged at US$89.1 million, with a payback period of just over two years. Net cash flow was estimated at US$184.2 million.
Mineralization at the project is described as consisting of epithermal, low-sulphidation, polymetallic gold-silver veins and breccias with copper, lead and zinc. Further exploration potential exists at the more than 90-sq.-km project, both along strike and downdip, along with other targets on the property. The company has identified at least 12 polymetallic zones on the site.
Metallurgical test results on a composite sample from the Cinco de Mayo, El Creston, El Perdido and El Catorce zones were released in April. The early testing showed recoveries of 85.6% for gold, 90.1% for silver, 87.9% for copper, 86.7% for lead and 88.1% for zinc.
For the base-metal concentrates, 77% of the lead was recovered into a flotation concentrate grading 53.9% lead, 96 grams gold, 1,007 grams sil- ver, 7.86% copper and 8.1% zinc. Initial testing on a copper concentrate returned 10% copper, 50 grams gold, 1,154 grams silver, 4.6% lead and 22% zinc. Roughly 63% of the zinc was recovered into a cleaner stage concentrate grading 55.3% zinc.
The company’s shares dropped 4¢ to 10.5¢ on the PEA news after gaining 8.5¢ over the four days preceding the study’s release. The company has 154 million shares outstanding, or 181 million fully diluted.
Soho recently completed a $500,000-convertible debenture private placement. Share conversion is conditional on the company completing a share consolidation, to be approved by shareholders at its annual meeting on Oct. 21.
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