NEWFOUNDLAND - Buchans Minerals Corp. of Windsor, NS, is pleased with the results of the preliminary economic study of its 100%-owned Lundberg base metal project near Buchans. The PEA is based on a 5,000 t/d open pit and milling operation over a 10 year mine life. The base case forecasts a pre-tax internal rate of return of 41% and a net present value at a 6% discount rate of $192.6 million. At base case metal prices plus 10%, the IRR is 51% and the NPV at a 6% discount rate is $266.2 million.
Using a cutoff value of 1.00% Zn-Pb-Cu, the inferred resource within a conceptual open pit mine is 17.28 million tonnes grading 1.63% Zn, 0.69% Pb, 0.40% Cu and 5.96 g/t Ag.
The PEA assumes a truck and shovel operation. A fleet of 91-t haul trucks and one11-m3 hydraulic shovel could do the job. The finished pit would be 200 metres deep with a surface dimension of 800 x 900 metres.
The concentrator will produce a 24.1% copper concentrate, 73.9% lead conc and 53.0% zinc conc. Recovery grades are 89.3%, 78.7% and 66.2%, respectively. The silver is expected to report to the lead conc (grading 359.5 g/t Ag) and the copper conc (37.8 g/t Ag). Annual production of metal will be 27.1 million lb of zinc, 5.5 million lb of copper, 16.3 million lb of lead and 27,900 oz of silver.
Buchan's initial capital outlay could be $119.6 million and sustaining capital $32.4 million. Total operating costs are estimated at $26.00 per tonne milled. Project payback will be 1.5 years.
Maps, schematics and a video of the Lundberg project are available at www.BuchansMinerals.com.
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