Some background The overall Rasuhuilca Main and West Zones contain 321,100 tonnes @ 2.15 g/t Au, 185.2 g/t Ag (252g/t Ag Equivalent) at a 75 g/t Ag Equivalent cutoff. Additional potential to expand these resources exists to the west within the Rasuhuilca NorthWest and Rasuhuilca South areas around the 4941m Level. Within this Resource a Proven & Probable Reserve (JORC Standard) of 168,700 tonnes @ 3.05 g/t Au, 216 g/t Ag (368 g/t Ag Equivalent) has been defined in the mining plan for the Main Zone.
This mining plan based upon these reserves alone envisages the blasting of 50,300 tonnes as sub-level and stope development ore and a mere 2,500 tonnes of waste development thanks to the extent of the pre-existing development.
Metallurgically the mill is expected to return average gold recoveries of ~85% and average silver recoveries of ~65%. The lower silver recovery is believed to be due to certain soluble silver minerals not being recoverable via cyanidation and Merrill-Crowe process fixation.
Mineral processing will be by a simple Crush – Grind – Classify; Agitated CN- Leach; Solid – Liquid separation and Recovery of Au / Ag via Merrill Crowe Process. Merrill-Crowe concentrates will be sold under contract to a precious metals smelter and refinery in Nazca.
On the basis of the financial model contained within this report this is expected to require a capital spend of US$ 3,081,934 over a five month period. As a result of this study it is expected that the Rasuhuilca mine will have a net payable recoverable precious metal value per tonne of US$139.39 (at a gold price of US$ 900, silver US$ 14.50) metal prices) with total costs ~ averaging US$ 51.40 per tonne over the life of mine.
Over life of mine (as planned) the Rasuhuilca project is expected to yield ~15,000 ozs gold and ~1 million ozs of silver.
The operation is expected to generate after tax profits of US9.17 million and has an IRR of 151.4% and a NPV of US$ 4.94 at an 8% discount rate. The operation can produce silver at a net cost of US$ 5.73 per troy ounce or on a full capital depreciated cost of US$ 7.79 per troy ounce.
Now these figures were based on a Au price of $900 and Ag of $14.50. With prices at double that with the feasibility study already done, we would roughly assume a NPV of $18-20M. Not huge but that ignores any upside exploration.
