The study concludes that the operation is capable of producing 9 million oz. silver annually at a cash cost below US$1.50 per oz. silver.
Compiled by Jacobs Engineering, The Winters Group and Knight Piesold, the study pegs preproduction capital costs at US$124 million.
“We are examining our options for the equity portion, and expect to begin negotiations for bank financing,” reports Sunshine Chairman John Simko.
Construction of the open-pit operation is expected to last two years, and, at 6,600 tons per day, production should average 9.2 million oz. silver by the beginning of the fifth year. During the first four years, higher-grade material will be mined, causing annual production to reach 11 million oz. Cash costs are expected to be less than US$2 per oz.
Sunshine is evaluating the possibility of processing silver-tin concentrates.
Proven and probable reserves stand at 23.9 million tons grading 4.9 oz. silver per ton, 0.33% tin and 0.57% zinc, equivalent to 116 million oz. silver, 156 million lbs. tin and 272 million lbs. zinc.
These figures do not take into account a halo of zinc mineralization surrounding the core silver-tin mineralization. The company expects to incorporate a resource of 11.3 million tons grading 2.23% zinc into the mine model and reserves. This addition is expected to increase the size of the open pit and reduce the stripping ratio.
Mineralization remains open at depth and on strike.
Sunshine estimates an internal rate of return of 20%, based on a silver price of US$5.50 per oz. and a tin price of US$2.80 per lb. over the life of the mine.
Situated in Jujuy province, Pirquitas is perched at an elevation of more than 14,000 ft.
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