AbraSilver confirms world-class economics for Argentina silver project
TSX-listed AbraSilver Resources Corporation confirms in a definitive feasibility study (DFS) on the Diablillos silver/gold project, in Argentina, its status as a world-class undeveloped deposit based on a standalone 9000 t a day processing operation.
The DFS finds robust economics and high early production levels, as well as low operating costs, for the project over its 25-year lifetime, plus further value creation potential through expansion efforts.
At a silver price of $50/oz and a gold price of $3650/oz, the Diablillos project has an after-tax net present value (NPV) of $3-billion, or C$4.2-billion, an internal rate of return of 41.9% and a 1.7-year payback period.
At spot prices, the after-tax NPV increases to $4.8-billion, or C$6.7-billion, the IRR widens to 56.5% and the payback period reduces to 1.4 years.
The DFS outlines a 20-million ounce silver equivalent production a year operation during the first five years and an average life-of-mine production rate 5.9-million ounces of silver and 62 000 oz of gold every year.
Initial capital expenditure is estimated at $722-million with subsequent sustaining capital totalling $530-million. The project has a low all-in sustaining cost potential of $20/oz of silver equivalent over its lifetime - positioning Diablillos among the lowest-cost primary silver projects globally.
AbraSilver is targeting first production before the end of 2029, subject to a final investment decision anticipated in the second quarter of 2027.
Some of the opportunities for enhanced project value beyond the DFS include a Phase 2 heap leach expansion to process lower grade mineralised material that would provide incremental gold and silver production, potential future plant throughput expansion to increase yearly production and continued exploration success across the broader Diablillos district.
AbraSilver expects to publish a preliminary economic assessment on the heap leach expansion before the end of June.
AbraSilver CEO and president John Miniotis says the DFS results are the culmination of years of disciplined technical work and confirm that Diablillos is exactly what the company believed to be - a high margin silver and gold project of significant scale with a clear path to construction.
"Importantly, the DFS represents our Phase 1 base case, not our ceiling. A heap leach addition, plant capacity growth and ongoing exploration across our land package give us multiple levers to build on these results. Our focus now is to continue moving quickly towards a final investment decision," Miniotis concludes.
