Zinc exploration and development company, Superior Lake Resources Limited, has announced the results of a Bankable Feasibility Study (BFS) for the Superior Lake Project, located approximately 200 kilometres east of Thunder Bay in the province of Ontario, Canada.
The project spans an area of 175 square kilometres and consists of two deposits – Winston Lake and Pick Lake. It is owned by Ophiolite Holdings Pty Ltd, an Australian incorporated entity. Superior Lake owns 70 per cent of Ophiolite and recently announced transactions to acquire an additional interest of 15 per cent in Ophiolite.
Since acquiring an interest in the project, Superior Lake has updated the historic resource to JORC (2012) compliance, completed a Restart Study which demonstrated strong economics and attractive capital payback and commenced an exploration program that has added to the resource and identified a number of targets for the future.
The BFS was broadly based on the results of the Restart Study with the exception being the mine access via a new decline from surface instead of rehabilitating the old Winston shaft.
CEO of Superior Lake, David Woodall, said the purpose of this BFS was to validate Superior Lake becoming a viable zinc operation.
“This was clearly achieved, as the Study demonstrates the Project will generate strong cash flow throughout the nine-year mine life,” he said.
“The driving factor for the result was the low AISC (LOM – US$0.47 / lb), which, if brought into production, would rank the Project in the lowest quartile of producers globally.”
Mr Woodall further commented that the development of the project has been completed with the future in mind, as the decline will be in close proximity to each of the major geophysical anomalies that were identified in the 2019 exploration program, all of which are expected to be tested in the near future.
“A discovery at any of these anomalies would significantly change the parameters of the project both in terms of mine life as well as production profile. In the coming months, the company will focus on finalising off-take, equity and debt financing as well as completing an Optimisation Study whereupon a decision to mine will be made,” he stated.
Furthermore, in accordance with JORC Code (2012) and the results of the BFS, the company has announced its Maiden Ore Reserve estimate for the project.
This is 1.96 million tonnes of ore, comprising 13.9 per cent zinc, 0.6 per cent copper, 0.2 per cent gold and 26.2 per cent silver.
Key Feasibility Study results include:
- Earnings before interest, tax, depreciation and amortisation (EBITDA) at full production – US$59M pa
- Life of Mine average EBITDA of US$36M (A$50M) per annum
- Initial capital expenditure of US$86M (A$106M) excluding owners and pre-production
- Life of Mine of 9 years (forecast to commence from 2021)
- Annual production (after ramp-up) of 38ktpa contained Zinc and 1.4ktpa contained Copper
Key production figures:
- Plant throughput 325,000 tonnes per annum
- Total 2.2 million tonnes treated
- Average grade: 13.7 per cent Zn
- Average zinc recovery: 96 per cent
More information on the results of the BFS can be found here.
More information on the Maiden Ore Reserve declaration can be found here.