Discovery Silver Raises Production Outlook at Cordero
The preliminary feasibility study for Discovery Silver’s Cordero project expands production by 40% and increases construction costs compared with a previous report. In addition, the company announced that the payback period increased due to additions to the project that are expected to reduce various operations risks.
According to the preliminary feasibility study, the project will produce 33 million oz of silver equivalent over an 18-year mine life for a US$1.15 billion net value. Meanwhile, construction is expected to cost US$455 million. Previously, the company had estimated production of 26 million oz of AgEq over a 16-year mine life with a US$1.16 billion net value and a construction cost of US$368 million. The company explained that the 24% increase in construction costs is due to the new size of the plant, inflation and the shift from contractor mining to owner-operated mining.
“Despite significant industry-wide cost escalation over the last year, cost savings from a streamlined process design and improved metallurgical performance have resulted in a highly capital-efficient project with excellent margins,” said Tony Makuch, CEO, Discovery Silver.
Moreover, Discovery updated Cordero’s measured and indicated resources to “716 million t grading 20gAg/t, 0.06g gold, 0.3% lead and 0.5% zinc for contained metal of 467 million oz silver, 1.3 million oz gold, 4.5 billion lb lead and 8.5 b lb. zinc.”
Meanwhile, the project’s inferred resources are now “145 million t grading 14g silver, 0.02g gold, 0.23% lead and 0.38% zinc for contained metal of 67 million oz silver, 122,000 oz gold, 726 million lb lead and 1.2 billion lb zinc.”
According to the new study, project processing is expected to begin at 25,000t/d of higher-grade sulfide material from the Pozo de Plata zone in phase one, which lasts four years. As of the fifth year, production is expected to increase to 51,000t/d. The increase will be part of the second phase, which will process higher-grade sulfides from the South Corridor. Starting in year 13, the project will mainly process lower-grade material in storage.
The company announced that the payback period was also increased from two years to more than four years due to the replacement of a heap leach process with flotation and expansion works. While payback time has increased, risks have decreased as most of the initial ore is from the proven grade and flotation is easier to work with.
Cordero, located in the northern part of a prolific mining belt in Chihuahua, is one of the largest silver deposits in the world and is fully owned by Discovery Silver. According to the company, Cordero has the potential to be developed into a highly capital-efficient mine that offers a combination of margin, size and scalability.