ScoZinc touts 65% IRR in improved PFS
Transparency at centre of corporate climate policy
SPONSOREDpolyus
PolarX finds extra copper potential in Alaska
SPONSOREDpolarx
Corazon Mining: developing a large-scale nickel sulphide project
SPONSOREDcorazon mining
Azure eyes province potential ahead of Andover resource
SPONSOREDazure minerals
The next step was securing finance and becoming a producer in Nova Scotia within a year of gaining funding, the company said.
ScoZinc said the updated PFS - which also included updated commodity prices, treatment charges and exchange rates - put initial capex at C$30.6 million, after-tax NPV8 at $128 million and IRR at 65% for a 14.3-year mine producing a five-year annual average of 35 million pounds of zinc and 15Mlb of lead.
Transparency at centre of corporate climate policy
SPONSOREDpolyus
PolarX finds extra copper potential in Alaska
SPONSOREDpolarx
Corazon Mining: developing a large-scale nickel sulphide project
SPONSOREDcorazon mining
Azure eyes province potential ahead of Andover resource
SPONSOREDazure minerals
It estimated gypsum reserves mined of 5.18 million tonnes over the life of mine.
ScoZinc had announced a non-binding offtake agreement for Scotia's life of mine gypsum supply on November 1.
The PFS released in July 2020 had outlined initial capex of $30.8 million, an after-tax NPV8 of $115 million and an IRR of 49%, for a 14-year mine at the same zinc and lead production rates.
President and CEO Mark Haywood described the updated PFS economics as 12% more robust than in the 2020 study.
"Importantly, the PFS shows that commercial zinc and lead concentrate and gypsum production can be achieved within 9 to 12 months of project financing of approximately $30 million, with a resulting average annual cash flow of $18 million," he said.
"The extensive facilities already in place on site, combined with the short pre-stripping period, enable the Scotia mine to potentially demonstrate a free cash flow of $19 million in the first year of commercial production."
The study's base case used both short-term price assumptions of US$1.40/lb zinc, $0.94/lb lead and $8.60/t gypsum, plus long-term assumptions of $1.20/lb, $1.05/lb and $8.60/t respectively.
ScoZinc had a working capital deficiency of almost C$600,000 at June 30.
It had been planning a business combination with Fancamp Exploration but this idea was scrapped in September, with Fancamp instead last month investing $1.3 million and converting a $250,000 debt to shares to become a cornerstone investor.
ScoZinc shares (TSXV: SZM) have spanned 45-80c over the past year and closed down 4% to 72c yesterday, valuing it at $12.8 million (US$10.1 million).