Economic Assessment for La Preciosa Project
VANCOUVER, BC - Pan American Silver Corp. and Orko Silver Corp. reported positive results of a Preliminary Economic Assessment (the "PEA" or the "Assessment") for the La Preciosa Project located in the State of Durango, Mexico. Pan American and Orko are advancing the Project under a joint venture agreement by virtue of which Pan American can earn a 55% direct interest in the Project by bringing La Preciosa into production.
The PEA is preliminary in nature, in that it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the PEA will be realized.
Highlights (all estimates are for 100% of the Project): Conventional surface and underground mining of 18 variably-oriented distinct vein structures; Estimated average annual production of 6.8 million ounces of silver and 11,800 ounces of gold at a cash cost of $11.84 per ounce of silver, net of by-product credits; Mine life of 12 years; Pre-production capital and development costs of approximately $270 million; After-tax net present value at a 5% discount rate of $315 million (assuming prices of $25.00/oz silver and $1,250/oz gold); The Project generates a 24.3% IRR assuming the above metal prices; 5,000-tonnes-per-day conventional cyanide leaching plant producing a silver-gold dore
Geoff Burns, President and CEO of Pan American, said, "La Preciosa is a very interesting Project, with a solid silver production profile, long mine life and it's located in a good mining jurisdiction, less than an hour's drive from our existing Mexican administration offices. At the PEA's long-term silver price the economics are very compelling; at current silver prices the Project is extremely robust. We will be moving forward aggressively to complete a full Feasibility Study and to position ourselves for a construction decision in the first half of 2012." The company's address is 625 Howe Street, Suite 1500, Vancouver, BCV6C 2T6, (604) 684-1175, fax: (604) 684-0147, email: [email protected].