Mineral Resource estimate
Zancudo Project – Technical Report and Preliminary Economic Assessment, December 14, 2023
The following table summarizes the current Mineral Resource Estimate for the Zancudo Project effective as at October 24, 2023:
| Category | Tonnes (kt) | Grade | Material Content | ||||
| Au (g/t) | Ag (g/t) | AuEq (g/t) | Au (koz) | Ag (koz) | AuEq (koz) | ||
| Inferred | 4,100 | 6.53 | 107 | 8.1 | 860 | 14,090 | 1,060 |
(1) Refer to NI 43-101 Technical Report dated December 14, 2023 with an effective date of October 24, 2023 on SEDAR+ and Company website for additional information.
(2) Mineral Resources are classified as Inferred Mineral Resources and are based on the 2014 CIM Definition Standards.
(3) Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources estimated will be converted into mineral reserves.
(4) Mineral Resources are estimated using a gold selling price of US$1,850/ounce and a silver selling price of US$23/ounce.
(5) Cutoff grade of 4 g/t AuEq is based on underground mining costs (US$105/tonne), mill processing and concentrating (US$42/tonne), G&A (US$21/t) and royalties of 3.2%.
(6) The quantity and grade classified as Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as Indicated or Measured Mineral Resources.
(7) Gold Equivalent is calculated with the formula AuEq = (Au *Au Recovery (75%) * AuPrice + Ag *Ag Recovery (80%) * AgPrice)) / (Au Recovery (75%) *Au Price).
(8) Scott E. Wilson, CPG, President of Resource Development Associates Inc. is the Qualified Person. The qualified person knows of no environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors that may materially affect the Mineral Resource estimate.
Preliminary Economic Assessment
Zancudo Project – Technical Report and Preliminary Economic Assessment, December 14, 2023
The Zancudo Project PEA is based on the Mineral Resource Estimate outlined above and incorporates local contract mining. Over the approximately 10.3-year mine life, production from the mining and processing of approximately 3.5 million tonnes of material containing 899,000 gold equivalent ounces is expected to recover 683,000 payable gold equivalent ounces through the sale of approximately 636,000 tonnes of high-grade gold-silver concentrates. Recoveries to concentrates are expected to be 85% for gold and 87% for silver from a 3-stage crushing circuit. Initial CAPEX costs are estimated at US$14.8 million including a US$2.0 million contingency. All-in sustaining costs are forecast to be US$1,059 per ounce of payable gold on a by-product credit basis.
At long-term gold and silver prices of US$1,800 per ounce and US$22 per ounce, respectively, total Life-of-Mine (“LOM”) undiscounted after-tax Project cash flow from mining operations amounts to US$266.4 million. At a 5% discount rate, the net present value of the total LOM after-tax Project cash flow amounts to US$206.3 million. The Project has an after-tax internal rate of return of 287% and payback in 2025.
Key Economic Parameters of the PEA
| Assumption / Results | 2023 PEA |
|---|---|
| Total tonnes processed over the LOM | 3,463,000 |
| Total waste mined over the LOM | 346,000 |
| Gold grade mined – LOM average (g/t) | 6.77 |
| Silver grade mined – LOM average (g/t) | 106.13 |
| Gold recovery – LOM average | 85% |
| Silver recovery – LOM average | 87% |
| Expected long-term gold price (US$/oz) | $1,800 |
| Expected long-term silver price (US$/oz) | $22 |
| Total gold production (payable ounces) | 575,514 |
| Total silver production (payable ounces) | 8,809,108 |
| LOM net revenue, after refining and treatment charges (US$ millions) | $1,021.3 |
| Initial capital costs (US$ millions) (Table 2) | $14.8 |
| Sustaining capital costs (US$ millions) | $5.2 |
| LOM operating costs and royalties (US$ millions) (Table 3) | $589.7 |
| LOM cash cost per ounce of gold (US$) (Table 3) | $1,050 |
| LOM AISC per ounce of gold (US$) (Table 3) | $1059 |
| Mine Life | 10.3 Years |
| Average LOM process rate (tpd) | 925 |
| After-tax undiscounted LOM Project Cash Flow (US$ millions) | $266.4 |
| After-Tax NPV (5% discount) (US$ millions) | $206.3 |
| After-Tax IRR | 287% |
| Payback Period | 1.2 Years |
