Highlights:
- The Curipamba feasibility study covers the first 10 years of
mine life with an open-pit Mineral Reserve ("Feasibility Study").
An updated preliminary economic assessment on the separate
underground mine optionality envisioned in years 10 to 14 is also
outlined ("Underground PEA")
- US$12M Feasibility Study resulted
in an increase in the resource base, improved metallurgy leading to
high quality copper and zinc concentrates, grading 28% copper and
56% zinc respectively, and strong project definition with detailed
geotechnical and hydrogeological drilling programs completed
- Environmental, Social and Impact Assessment ("ESIA") for
open-pit mine and mill development shall be submitted to the
Ecuadorian Ministry of Environment in November 2021, which references the highest
standards with respect to tailings design, water and waste
management, and discharge quality
- Adventus Mining has initiated a comprehensive review of all
strategic development options, including concentrate off-take and
project finance packages, as well as potential options for
strategic investment or corporate transaction. Advanced discussions
are underway for up to US$240M in
non-equity financing
- Detailed engineering for Curipamba development is expected to
begin in Q1 2022
- The tailings storage facility design has sufficient capacity
for significant mineral reserve additions
- Adventus Mining will host a 2021 Feasibility Study Webinar on
Wednesday, October 27, 2021, at
11 am ET. Please register at:
https://www.amvestcapital.com/webinar-directory/adventus102721
Open Pit NI 43-101 Feasibility Study
- After-tax Feasibility Study IRR of 32% and NPV8% of
US$259 million for initial open-pit
development only
- 77% of life-of-mine revenues from payable copper and gold
- Production C1 cash cost of US$1.14/lb and AISC of US$1.26/lb copper equivalent
- Average annual production of 10,463 tpa copper and 21,390 tpa
copper equivalent over the life-of-mine
- Proven and Probable Mineral Reserves of 6.5 M tonnes at 1.93% Cu, 2.49% Zn, 2.52 g/t Au,
45.7 g/t Ag, 0.25% Pb
Underground PEA Update ([1])
- Underground mine plan based on Indicated and Inferred
Resources, independent of those resources used in the open pit
Feasibility Study
- After-tax NPV8% of US$49
million, assuming underground production starts after the
completion of the open-pit mine plan in year 10, and discounted to
the same time zero as the open-pit Feasibility Study (year -2)
- Additional Indicated and Inferred Mineral Resources of 1.9
million tonnes at 2.72% Cu, 2.38% Zn, 1.37 g/t Au, 31 g/t Ag, 0.14%
Pb and 0.8 million tonnes at 2.31% Cu, 2.68% Zn, 1.74 g/t Au, 29
g/t Ag, 0.11% Pb, respectively
- Option to upgrade underground Mineral Resources to reserves by
an infill drilling, test-work program and completion of a separate
feasibility study estimated to cost approximately US$8M over 2.5 years
TORONTO, Oct. 26, 2021 /CNW/ - Adventus Mining
Corporation ("Adventus") (TSXV: ADZN) (OTCQX: ADVZF) and
Salazar Resources Limited ("Salazar") (TSXV: SRL) (OTCQB:
SRLZF) (collectively the "Partners") are pleased to announce the
feasibility study results, the first estimate of Mineral Reserves,
and updated Mineral Resources for the El Domo volcanogenic massive
sulphide deposit, located within the 21,537-hectare Curipamba
project in central Ecuador
("Curipamba" or "El Domo"). The Feasibility Study was commissioned
by Adventus and led by DRA Americas Inc. ("DRA") to further advance
the engineering design and future construction of an open-pit mine
and facilities to produce concentrates of copper, zinc, and lead
with significant gold and silver credits. This work has been
completed as part of Adventus's option agreement with Salazar
whereby Adventus may earn a 75% ownership interest in the Curipamba
project with a preferential 95% payback of future cash flows until
its investment has been fully repaid. The Feasibility Study results
will be summarized in an independent National Instrument 43-101
Technical Report ("NI 43-101") and filed on the companies' SEDAR
profiles within 45 days. After filing of the NI 43-101 Technical
Report, Adventus will have then fulfilled the company's earn-in
requirements under the Curipamba option agreement with Salazar,
having also spent more than the required US$25M (approximately US$38.9M up to June 30,
2021 since October 2017). The
Partners will then enter into a joint venture agreement governed by
a pre-agreed shareholders agreement.
_______________________
|
1 The
preliminary economic assessment is preliminary in nature and
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 preliminary economic
assessment will be realized. Mineral resources that are not mineral
reserves do not have demonstrated economic viability.
|
President and CEO of Adventus, Christian
Kargl-Simard stated:
"The completion of the Curipamba feasibility study is a major
milestone for the Adventus Mining and Salazar partnership, with the
results highlighting the project's attractive economics,
improvements since the 2019 PEA, and benefits to many stakeholders.
Across valuation metrics and benchmarks – highlighted by its low
capital intensity, lowest quartile production costs and forecast
free cash flows – Curipamba is an exceptional copper-gold
investment proposition not only within the Americas but also
globally. The technical and economic results of the
study also reinforce the viability of the Curipamba project to
stakeholders in Ecuador as the
government seeks to support direct investment in its rapidly
growing mining sector. In addition to the formal completion of
partnership earn-in requirements, we look forward to providing
exciting news updates prior to the initiation of detailed
engineering at the start of 2022. We also see meaningful value
creation through expanding the underground resource and the
potential of accelerating its development in earlier years with an
expansion funded through future cash flows."
President and CEO of Salazar, Fredy
Salazar stated:
"We want to thank our partner Adventus Mining for its
leadership in advancing the Curipamba project, including the
best-practice engineering work completed by the international
technical team that will benefit many stakeholders in our home
country of Ecuador. Salazar has
been uniquely involved at Curipamba since the discovery of the El
Domo deposit in 2007. We are proud of today's milestone with maiden
Mineral Reserves and now look forward to the execution path towards
future construction and operations."
Updated Mineral Resource Estimate
An update to the Mineral Resource estimate (Table 1a to 1c) for
El Domo deposit at Curipamba has been completed as part of the
Feasibility Study to include all recent infill drilling completed
in 2020 and 2021. The updated Mineral Resource estimate has an
effective date of October 26, 2021
and is disclosed in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects and prepared by SLR
Consulting (Canada) Ltd. ("SLR"),
formerly Roscoe Postle Associates.
The updated Mineral Resource estimate is supported by
information provided from 391 core boreholes, totaling 74,992
metres, completed between 2007 and 2021 and possesses a similar
footprint to the previous Mineral Resource estimate (see
May 2, 2019 news release). The infill
drilling in 2020 and 2021 resulted in the upgrading of portions of
the Mineral Resource from previously classified Indicated to
Measured and Inferred to Indicated categories. Other highlights
include copper grades increasing by 9%.
Table 1a. Total Mineral Resource for El Domo, Curipamba
Project – October 26, 2021 (sum of
table 1b and 1c)
Resource
Category
|
Tonnes
(Mt)
|
Grade
|
Contained
Metal
|
Cu
(%)
|
Pb
(%)
|
Zn
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
Cu
(kt)
|
Pb
(kt)
|
Zn
(kt)
|
Au
(koz)
|
Ag
(koz)
|
Measured
|
3.2
|
2.61
|
0.24
|
2.50
|
3.03
|
45
|
84.9
|
7.7
|
81.1
|
316
|
4,704
|
Indicated
|
5.7
|
1.83
|
0.24
|
2.64
|
1.98
|
45
|
104.5
|
13.9
|
150.6
|
364
|
8,265
|
M+I
|
9.0
|
2.11
|
0.24
|
2.59
|
2.36
|
45
|
189.4
|
21.6
|
231.7
|
680
|
12,969
|
Inferred
|
1.1
|
1.72
|
0.14
|
2.18
|
1.62
|
32
|
18.5
|
1.5
|
23.6
|
57
|
1,118
|
Table 1b. Pit Constrained
Mineral Resource for El Domo, Curipamba Project – October 26, 2021
Resource
Category
|
Tonnes
(Mt)
|
Grade
|
Contained
Metal
|
Cu
(%)
|
Pb
(%)
|
Zn
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
Cu
(kt)
|
Pb
(kt)
|
Zn
(kt)
|
Au
(koz)
|
Ag
(koz)
|
Measured
|
3.2
|
2.61
|
0.24
|
2.50
|
3.03
|
45
|
84.9
|
7.7
|
81.1
|
316
|
4,704
|
Indicated
|
3.8
|
1.38
|
0.30
|
2.77
|
2.29
|
52
|
52.6
|
11.3
|
105.2
|
280
|
6,370
|
M+I
|
7.1
|
1.95
|
0.27
|
2.64
|
2.63
|
49
|
137.5
|
19.0
|
186.3
|
596
|
11,074
|
Inferred
|
0.3
|
0.34
|
0.20
|
1.01
|
1.34
|
39
|
1.2
|
0.7
|
3.5
|
15
|
430
|
Table 1c. Underground Mineral Resource for El Domo,
Curipamba Project – October 26,
2021
Resource
Category
|
Tonnes
(Mt)
|
Grade
|
Contained
Metal
|
Cu
(%)
|
Pb
(%)
|
Zn
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
Cu (kt)
|
Pb
(kt)
|
Zn (kt)
|
Au
(koz)
|
Ag
(koz)
|
Indicated
|
1.9
|
2.72
|
0.14
|
2.38
|
1.37
|
31
|
51.9
|
2.6
|
45.4
|
84
|
1,895
|
Inferred
|
0.8
|
2.31
|
0.11
|
2.68
|
1.74
|
29
|
17.3
|
0.8
|
20.1
|
42
|
688
|
Notes:
1.
CIM Definition Standards (2014) definitions were followed for
Mineral Resources.
2.
Mineral Resources are reported above a cut-off NSR value of
US$29/t for Mineral Resources amenable to open-pit mining and the
underground portion of the 2021 Mineral Resources are reported with
mining shapes which were generated using a $105/t NSR cut-off
value.
3.
The NSR value is based on estimated metallurgical recoveries,
assumed metal prices, and smelter terms, which include payable
factors treatment charges, penalties, and refining
charges.
4.
Mineral Resources are estimated using the metal price
assumptions: US$4.00/lb Cu, US$1.05/lb Pb, US$1.30/lb Zn,
US$1,800/oz Au, and US$24/oz Ag.
5.
Metallurgical recovery assumptions were based on three
mineral types defined by the metal ratio
Cu/(Pb+Zn):
a.
Zinc Mineral (Cu/(Pb+Zn) <0.33): 86% Cu, 90% Pb, 97% Zn,
68% Au and 78% Ag
b.
Mixed Cu/Zn Mineral (0.33≤ Cu/(Pb+Zn) ≤3.0): 86% Cu, 82% Pb,
95% Zn, 55% Au and 67% Ag
c.
Copper Mineral (Cu/(Pb+Zn) >3.0): 80% Cu, 37% Pb, 36% Zn,
14% Au and 29% Ag
6.
NSR factors were also based on the metal ratio
Cu/(Pb+Zn):
a.
Zinc Mineral (Cu/(Pb+Zn) <0.33): 53.41 US$/% Cu, 7.99
US$/% Pb, 13.47 US$/% Zn, 30.91 US$/g Au and 0.39 US$/g
Ag
b.
Mixed Cu/Zn Mineral (0.33≤ Cu/(Pb+Zn) ≤3.0): 58.99 US$/% Cu,
7.05 US$/% Pb ,13.41 US$/% Zn, 25.12 US$/g Au and 0.34 US$/g
Ag
c.
Copper Mineral (Cu/(Pb+Zn) >3.0): 57.83 US$/% Cu, 6.84
US$/g Au and 0.19 US$/g Ag
7.
Bulk density interpolated on a block per block basis using
assayed value, the correlation between measured density values and
iron content, and base metal grade. The bulk densities range
between 2.1 t/m3 and 4.6
t/m3
8.
Mineral Resources are inclusive of Mineral
Reserves.
9.
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
10. The
underground portion of the Mineral Resources are reported within
underground reporting shapes and include low grade blocks falling
within the shapes.
11. QP is not
aware of any environmental, permitting, legal, title, taxation,
socio-economic, marketing, political, or other relevant factors
that could materially affect the Mineral Resource
estimate
12. Numbers may
not add due to rounding.
|
Feasibility Study Mineral Reserves
The basis of the Curipamba Feasibility Study is on the maiden
open-pit Mineral Reserves that were estimated from the updated
open-pit Mineral Resources and on the mine design by DRA (Table
2).
Table 2: Open-Pit Mineral Reserves Statement
Classification
|
|
Grade
|
Contained
Metal
|
Tonnage
(kt)
|
Cu
(%)
|
Pb
(%)
|
Zn
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
Cu
(kt)
|
Pb
(kt)
|
Zn
(kt)
|
Au
(koz)
|
Ag
(koz)
|
Proven
Reserves
|
3,136
|
2.50
|
0.2
|
2.30
|
2.83
|
41
|
78.4
|
6.7
|
72.0
|
285
|
4175
|
Probable
Reserves
|
3,343
|
1.39
|
0.3
|
2.67
|
2.23
|
50
|
46.4
|
9.4
|
89.4
|
240
|
5342
|
Proven +
Probable
|
6,478
|
1.93
|
0.2
|
2.49
|
2.52
|
46
|
124.9
|
16.2
|
161.4
|
525
|
9517
|
Notes:
1.
Waste: Ore Strip Ratio 6.02 : 1 not including pre-strip waste
and 8.59 : 1 including pre-strip waste
2.
The effective date of the Mineral Reserve Estimate is October
22, 2021.
3.
Mineral Reserves are reported in accordance with CIM
Definition Standards (2014) and best practice guidelines
(2019).
4.
An NSR cut-off grade of US$32.99 was used for all
material.
5.
Mineral reserves were estimated at a gold price of $1,630/oz,
a silver price of $21.00/oz, a lead price of $0.92/lb, a zinc price
of $1.16/lb, and a copper price of $3.31/lb; they include modifying
factors related to mining cost, dilution, mine recovery, process
recoveries and costs, G&A, royalties, and rehabilitation
costs.
6.
Figures have been rounded to an appropriate level of
precision for the reporting of Mineral Reserves.
7.
Due to rounding, some columns or rows may not compute exactly
as shown.
8.
The Mineral Reserves are stated as dry tonnes processed at
the crusher.
9.
Tonnages are presented in metric tonnes
|
Open-Pit Feasibility Study
The Feasibility Study is based only on open-pit Mineral
Reserves, whereas the 2019 preliminary economic assessment included
both the open pit and potential underground Mineral Resources
("2019 PEA"). Table 3 and Figure 1 provide a summary of the key
Feasibility Study results and cash flows respectively, with
sensitivity scenarios for higher and lower metal prices also
shown.
Table 3: Open Pit Feasibility Study Results
Open Pit
Feasibility Study Results
|
Feasibility
Study Base
Case
|
-15% Price
Deck
|
Spot Prices as
of
October 19, 2021
|
After-Tax NPV (US$
million, 8% discount rate) (1)
|
$259
|
$159
|
$423
|
After-Tax IRR (%)
(2)
|
32%
|
23%
|
44%
|
Cumulative First 6
Years of After-Tax Cashflow
(US$
million undiscounted)
|
$495
|
$391
|
$664
|
Initial Capital
Cost (US$ M, incl. refundable VAT) (3)
|
$248
|
Total Life of Mine
Capital Cost including Closure (US$ M)
(4)
|
$316
|
AISC (US$/lb CuEq
Basis) (5)
|
$1.26
|
$1.23
|
$1.41
|
Payback Period
(years)
|
2.6
|
3.2
|
2.1
|
Nominal processing
capacity (tpd)
|
1,850
|
Average annual
payable production (Years 1 - 9) (6)
|
Cu = 11 kt
|
Au = 26
koz
|
Zn = 12 kt
|
Ag = 488
koz
|
Pb = 0.5
kt
|
CuEq= 23
kt
|
CuEq= 22
kt
|
CuEq= 21
kt
|
Metal prices
assumed
|
$1,700/oz
Au
|
$1,445/oz
Au
|
$1,766/oz
Au
|
$23.00 /oz
Ag
|
$19.55 /oz
Ag
|
$23.29 /oz
Ag
|
$3.50 /lb
Cu
|
$2.98 /lb
Cu
|
$4.72 /lb
Cu
|
$0.95 /lb
Pb
|
$0.81 /lb
Pb
|
$1.10 /lb
Pb
|
$1.20 /lb
Zn
|
$0.98 /lb
Zn
|
$1.70 /lb
Zn
|
Notes:
1)
Unless otherwise noted in this news release, all currencies are
reported in US dollars on a 100% project basis
2)
Assumes an 18-month construction period as the basis for the
internal rate of return ("IRR") and net present value ("NPV")
calculations
3)
Capital cost estimates are to AACE class 3, are based primarily
on contractor quotes and vendor equipment pricing, and includes 12%
VAT (~$25M total) on the applicable work/materials, as well
as an approximate 10% contingency. A developmental capital package
(~$25M) for the progression of early works and project design
is assumed to be sunk and not included in the capital cost
shown here. It is envisioned to be spent prior to a construction
decision.
4)
Includes credit for $10M salvage at end of mine
life
5)
All-in sustaining cost per pound copper, cash cost per pound and
cash cost per pound are not measures recognized under IFRS and are
referred to as non-GAAP measures. These measures have no
standardized meaning under IFRS and may not be comparable to
similar measures presented by other companies. Refer to the
"Non-GAAP Financial Measures" section of the Management's
Discussion and Analysis for the three and twelve months ended
December 31, 2021 for more information about non-GAAP measures.
All-in sustaining cost per pound copper represents mining,
processing, site general and administrative costs, royalties,
refining, penalties, concentrate transport, and sustaining capital
dividend by payable copper equivalent pounds.
Copper Equivalent
Calculation:(Payable Metals NSR Ag,Zn,Pb,Au, Ag)/(Payable Metals
NSR Cu)* (Payable Copper t)
6)
Year 10 excluded from the average as it is a partial year of
production.
|
Major changes in the 2021 Feasibility Study vs. the 2019
PEA
- Open-pit only – Due to the underground resource having
significant inferred material, and insufficient geotechnical
drilling, the Partners decided to base the Feasibility Study on the
open-pit only, and completed a separate updated PEA on the
underground resources, whereas the 2019 PEA was on a combined
open-pit and underground scenario
- Infill drilling – 44-hole infill and step-out drill
program was completed and allowed for significant conversion to
Measured category of Mineral Resource, bringing the total number of
core boreholes drilled to 391
- Process optimization – Addition of a lead concentrate
circuit provides a third saleable product and allows for the
production of higher value copper and zinc concentrates with
minimal lead penalties. Process optimization work introduced new
chemical reagents, a 125-micron primary grind size, and allowed
improvement on concentrate grades and recoveries
- Mine optimization and mill throughput – Nameplate mill
throughput was increased from 1,750 to 1,850 tpd, supported by an
optimized mine plan that minimizes stockpiling. Significantly more
rock waste was moved forward into preproduction from later in the
mine life to provide sufficient materials to start the tailings
storage facility construction ("TSF")
- Site investigations – A LIDAR survey as well as
geotechnical and hydrogeological drilling programs were completed
which provide more accurate definition of surface and subsurface
conditions, which were considered in the Feasibility Study
designs
- Commodity prices – Notably much higher at present than
they were in 2019, which provides a positive economic benefit to
the project financials, but using the same long-term consensus
price methodology
- Water usage – The project is now completely
self-sufficient with respect to water requirements through the
collection and use of rainfall/surface water on site. Water pumping
from external river sources is no longer required
Open-Pit Mining
The open-pit will be mined using a traditional truck and shovel
operation with a contractor mining fleet consisting of drills,
shovels, front end loaders, and 40-ton haul trucks. The open-pit
will be developed in four phases and operate for approximately 10
years of production, with total material movement of 61.8 Mt (6.5
Mt ore and 55.3 Mt waste) at a strip ratio of 8.6 (including
pre-stripping) and 6.02 without pre-stripping included. The
open-pit mine design consists of a single pit with a mining
sequence to maximize grade, but also provides suitable construction
material for the project infrastructure and waste management
facilities during construction. Mining of ore is expected to begin
within 18 months of the start of pre-production waste movement.
Open-Pit
Processing
Previously conducted metallurgical test-work programs in 2014
and 2019 were supplemented with further comminution, flotation,
locked cycle, solid/liquid separation test-work programs and
associated minerology and assays during 2020 and 2021. Samples
consisted of remaining material from the 2019 test-work campaign
and new composite samples taken from representative drill cores in
2020 and 2021. Results corresponded well with previously completed
test-work with improvements in recoveries and grades incorporated
in the Feasibility Study.
Net recoveries to copper, zinc, and lead concentrates total
87.5% for copper, 84.7% for zinc, 51.8% for gold, 63.6% for silver,
and 30.3% for lead. The net recoveries only include metals
that are payable in their respective concentrates.
The process plant is expected to ramp-up production over a
three-month period following completion of construction to a steady
state throughput rate of 666,000 tonnes/year (1,850 tpd). The
processing plant design includes a comminution circuit consisting
of a two-stage crushing circuit followed by ball milling, and
sequential flotation circuits producing copper, zinc, and lead
concentrates.
Site
Infrastructure
The major infrastructure items considered and costed in the
Feasibility Study support a mining and milling operation that is
expected to operate 24-hours per day, seven-days per week. The
design of project infrastructure has prioritized environmental
protection, workforce safety, and operating efficiency while
minimizing community impacts. The project site will consist of the
open-pit mine and mining related workshops, a processing plant,
waste rock and conventional tailings facility, and support service
infrastructure such as warehousing, offices and workshops.
The project site is water positive for which water capture,
treatment and discharge infrastructure has been allowed for and
designed. The project will draw water from within the property and
contain chemical process water and tailings within the TSF. Water
management and treatment has been allowed for to treat both
open-pit dewatering and surface facilities run-off to required
environmental discharge standards.
The site will be supported by electrical grid power which
requires the construction of a 7.1 km 69kV power line. The power
grid of Ecuador is supplied mostly
by hydro-electric generation, which may offer future credits to the
project. The mine and process operations are supported by
functional maintenance and administration infrastructure located on
site as well as off-site locations for non-critical administrative
functions. Select local access roads will be upgraded and
maintained throughout the mine life.
The proposed tailings storage is of conventional design
containing both tailings and process water. Waste rock and over
burden will be split by type and placed in suitably designed
facilities that will ensure stability and containment and run-off
treatment of any potentially acid generating waste rock. All
facilities are located near the open-pit mine to maximize
efficiencies and minimize impact. The TSF is suitably designed to
international standards for earthquake events, storms and
floods.
Initial Capital Costs and
Sustaining Costs
The initial capital expenditures for the project as estimated by
DRA are summarized in Table 4. Capital expenditures to be incurred
after the start-up of operations are assigned to sustaining capital
and are projected to be covered by operating cash flows. Project
contingencies have been added where applicable, excluding
capitalized operating costs, which results in an overall
contingency of $21.9M or 10%
(excluding VAT).
The Curipamba project will benefit from established
infrastructure in Ecuador, noting
that the project is only 150 km by road to the major port city of
Guayaquil. Local infrastructure owned by the Partners in the town
of Las Naves will further support the project development. The
estimated initial capital cost of $248M is inclusive of applicable VAT, with
approximately $25 million expected to
be refunded against VAT charged upon the commencement of
concentrate sales.
DRA estimates the life-of-mine sustaining capital for Curipamba
to be $53M, which consists of
$29M during mine operations and
$34M in closure costs, offset by an
estimated $10M in salvage value upon
mine closure. Sustaining capital will be funded by operating cash
flows.
Open Pit Operating
Costs
The estimated operating costs for the Curipamba open-pit mine is
$56.21/t of mill feed – see Table 5.
DRA has estimated the operating cost based on in-country contractor
and supplier quotations, industry benchmarking, proprietary
information, and its professional experience.
Table 5: On Site Operating Cost for the
Open-Pit
Metric
|
Unit
|
2021
Feasibility
Study
|
2019
PEA
|
Open pit mining
cost (excl. pre-prod)
|
US$/t
mined
|
3.35
|
3.15
|
Processing
cost
|
US$/t
milled
|
22.74
|
21.80
|
G&A
|
US$/t
milled
|
8.95
|
4.74
|
Projected Treatment Charges ("TCs") and transport charges for
the copper, zinc and lead concentrates were developed by a global
major off-taker based on their extensive mining projects experience
in Latin America. Table 6
summarizes the key terms used in the Feasibility Study.
Table 6: Off Site Costs – Copper, Zinc and Lead
concentrates
Item
|
Copper
Concentrate
|
Zinc
Concentrate
|
Lead
Concentrate
|
Treatment
Charge
|
$80 / dmt
|
US$220 /
dmt
|
US$180 /
dmt
|
Refining
Charge
|
|
|
|
Primary
Metal
|
$0.08 / lb
Cu
|
-
|
-
|
Gold
|
$5.00 / oz
|
-
|
$15.00 /
oz
|
Silver
|
$0.50 / oz
|
-
|
$1.50 / oz
|
Payability
|
|
|
|
Copper
|
96.5%
|
-
|
-
|
Zinc
|
-
|
85%
|
-
|
Gold
|
95%
|
75%
|
95%
|
Silver
|
90%
|
75%
|
95%
|
Lead
|
-
|
-
|
95%
|
Moisture
%
|
10%
|
Transportation
|
$71.74 /
wmt
|
The concentrates are of good quality, with strong precious
metals credits. A minor penalty for the combined zinc and lead
grade in the copper concentrate was applied, at a rate of
US$3.00 / dmt for every 1% over 4%.
Life-of-mine penalties for the copper concentrates were calculated
to be approximately US$4.7M, which
could be decreased further with future blending strategies.
Concentrates will be trucked approximately 275 km to the deep-water
port at Posorja, southwest of Guayaquil, primarily on the Pan
American highway, and shipped internationally.
Taxes and
Royalties
Taxes and royalties that are presented in the Feasibility Study
were based on Ecuadorian legislated tax rates and reviewed by an
independent tax consultant. Improvements may be possible based on
final terms agreed upon with the Ecuadorian government within the
exploitation agreement. Based on long-term prices assumed in the
Feasibility Study, life-of-mine royalties to the government are
estimated to be $59M, value
added taxes ("VAT") are estimated to be $65M, while additional state taxes of
$105M and income taxes of
$147M – for an estimated total of $376M in taxes and royalties to the
government of Ecuador over the 10
year mine life. An additional 2% NSR royalty is also payable to
Altius Minerals Corporation. The VAT portion of the taxes are
assumed to be refundable against exported concentrate
revenues.
Environmental and Community
Matters
Environmental and social baseline studies for the Curipamba
project have been ongoing since November
2019, and preparation of the Environmental and Social Impact
Assessment ("ESIA") started in June
2021 for the open pit mine and associated infrastructure.
The ESIA is expected to be submitted to the government of
Ecuador in November 2021, with approval expected by
October 2022 after an established
review and consultation process. The permitting and approval
processes for the main access road and the power line to connect
Curipamba to the national grid have also been initiated. Community
consultations for the Curipamba project, feasibility study and ESIA
started in May 2021 and will continue
through 2022. More details on the ESIA will be included in a
subsequent news release.
Underground Mine PEA
The updated PEA for the underground mine expansion assumes the
same metallurgy, treatment charges, refining charges, penalty
assumptions, transport charges, tax structure, royalties, and
surface infrastructure as the open-pit Feasibility Study. In
particular, the process plant will be used for the underground
operation, and the tailings storage facility has sufficient excess
capacity to support the underground operation. As a result, this
section will only summarize the underground PEA highlights,
including the updated Mineral Resources amenable to underground
mining, capital and operating costs estimates, and financial
metrics.
The underground mine plan consists of 2.0 million tonnes at
2.48% Cu, 2.18% Zn, 1.25 g/t Au, 28.1 g/t Ag, 0.13% Pb of diluted
Indicated Resources, and 0.8 million tonnes at 2.13% Cu, 2.46% Zn,
1.60 g/t Au, 26.4 g/t Ag, 0.09% Pb, of diluted Inferred
Resources.
For consistency, the years of operation for the Underground PEA
use the same starting point as the open-pit Feasibility Study,
however the underground PEA is considered a separate mine plan on
mineral resources exclusive of those used in the open-pit mine plan
and will not potentially commence until the open-pit reserves are
exhausted in year 10. Development capital for the Underground PEA
is anticipated to be spent starting in year 9, to allow for the
start of underground operations in year 10. NPV and IRR
calculations for the Underground PEA have been significantly
discounted back to year -2.
The preliminary economic assessment is preliminary in nature and
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 preliminary economic
assessment will be realized. Mineral resources that are not mineral
reserves do not have demonstrated economic viability.
Table 7: Curipamba Underground Mine PEA Results
|
Underground
PEA
Base
Case
|
-15% Price
Deck
|
Spot
Prices
as at Oct. 19,
2021
|
After-Tax NPV ($M,
8% discount rate) (1)(2)
|
$49
|
$27
|
$93
|
Total development
capital for underground ($M) (3)
|
$42
|
Nominal processing
capacity (tpd)
|
1,850
|
Average annual
payable production (Years 11 - 14)
|
Cu = 14 kt
|
CuEq = 20
kt
|
CuEq = 20
kt
|
CuEq = 20
kt
|
Metal prices
assumed
|
$1,700/oz
Au
|
$1,445/oz
Au
|
$1,766/oz
Au
|
$23.00 /oz
Ag
|
$19.55 /oz
Ag
|
$23.29 /oz
Ag
|
$3.50 /lb
Cu
|
$2.98 /lb
Cu
|
$4.72 /lb
Cu
|
$0.95 /lb
Pb
|
$0.81 /lb
Pb
|
$1.10 /lb
Pb
|
$1.20 /lb
Zn
|
$0.98 /lb
Zn
|
$1.70 /lb
Zn
|
Notes:
1)
Unless otherwise noted in this news release, all currencies are
reported in US dollars on a 100% project basis. Metals prices used
are the same as the Feasibility Study
2)
Underground PEA net present value ("NPV") calculations are
discounted back to Y-2 of the open pit LOM for
consistency
3)
Capital cost estimate is based on DRA in-house estimates and
benchmarking, inclusive of 12% VAT (~$4.5M)
4)
CuEq is calculated as follows: (Payable Metals NSR Ag,Zn,Pb,Au,
Ag)/(Payable Metals NSR Cu)* (Payable Copper t)
|
DRA has selected a drift and fill mining method for the
Underground PEA to maximize mine recovery. The 2019 PEA assumed a
room and pillar operation which had a lower overall mine recovery
due to resource material left behind in the pillars despite having
a similar development and operating cost.
The El Domo underground deposit is amenable to a drift and fill
operation and can supply the mill with 1,850 tpd throughput. A
20-metre pillar composed primarily of waste rock will separate the
exhausted open-pit from the underground mine. Development cost is
estimated at US$5,239/m for drift and
fill.
Underground Mine Operating
Costs
The estimated operating cost for the Curipamba underground mine
is $75.58/t of mill feed exclusive of
processing and G&A costs. DRA has estimated the operating cost
based on in-country contractor and supplier quotations, industry
benchmarking, proprietary information, and its professional
experience.
Table 8: On-Site Operating Cost Estimate for the
Curipamba Underground Mine
Metric
|
Unit
|
2021
PEA
|
2019
PEA
|
Underground mining
cost
|
US$/t
mined
|
70
|
71.50
|
Cemented rock
fill
|
US$/t
mined
|
5
|
-
|
Stockpile
rehandling
|
US$/t of
stockpile
|
0.33
|
-
|
Mine
dewatering
|
US$/t
mined
|
0.25
|
-
|
Processing
cost
|
US$/t
milled
|
22.74
|
21.80
|
G&A
|
US$/t
milled
|
8.95
|
4.74
|
Next Steps for Curipamba
A comprehensive Adventus board and management review of all
strategic development options is underway, including concentrate
off-take and project finance packages, as well as potential options
for strategic investment or a corporate transaction. Commercial
discussions are at an advanced stage for up to US$240M of non-equity financing. It is expected a
final decision will be made on the strategic development options by
the end of Q1 2022, at which point the detailed engineering phase
is expected to have begun.
Following the completion of the Feasibility Study, Adventus will
progress the following workstreams prior to construction decision
approval and ramp-up to full scale construction:
- Complete detailed engineering
- Additional geotechnical drilling and test work to support the
detailed design
- Additional geochemistry test work
- Upgrade existing and construct a new access road to the project
site
- Power line detailed engineering, permitting and preparatory
work
- Commence site preparatory infrastructure work (fencing, on-site
roads, clear & grub, etc.)
- Install the previously purchased construction camp (see
July 14, 2021 news release)
- Purchase engineering / vendor data for long lead equipment to
support the detailed design (ball mill, flotation cells etc.)
- Prepare request-for-proposal documentation and tender the major
construction contracts (mining, earthworks, concrete, steel,
mechanical/piping, electrical and instrumentation), in preparation
for award
- Complete final land acquisition
- Receive ESIA approval, and sign-off on investment and likely
exploitation agreement
These activities are expected to cost approximately US$25M to complete and are being funded through
existing treasury cash and capital options as part of the current
strategic review. These costs are not included in the Feasibility
Study capital cost estimate or financial results, as they are
required to be completed prior to a final construction decision
expected by the end of 2022.
The estimated cost to further advance the underground mine to a
Feasibility Study design is approximately US$8M, requiring an estimated 2.5 years to
complete. This is envisioned as a program once initial production
from the open-pit is achieved and shall be financed through cash
flows from the open-pit mine operations.
All currency units presented in this news release are in U.S.
dollars unless otherwise stated.
Technical Information and Quality Control & Quality
Assurance ("QAQC")
The Curipamba project resource-related work program is being
managed and reviewed by Vice President Exploration, Jason Dunning, M.Sc., P.Geo., a non-Independent
Qualified Person within the meaning of NI 43-101. Salazar staff
collect and process samples that are securely sealed and shipped to
Bureau Veritas ("BV") in Quito for
sample preparation that includes crushing and milling to prepare
pulps that are then split for shipment to their facility in
Lima, Peru for analysis.
All assay data have undergone internal validation of QAQC;
noting there is an established sampling control program with blind
insertion of assay blanks, certified industry standards and sample
duplicates for the Curipamba project. A QAQC program is also in
place at BV and includes insertion of blanks, standards, and
duplicate reanalysis of selected samples. BV's quality system
complies with the requirements for the International Standards ISO
9001:2000 and ISO 17025: 1999. At BV, gold is analyzed by classical
fire assay techniques with an ICP-AES finish, and both silver and
base metals are analyzed by a 44-element aqua regia ICP-AES
technique. Overlimit protocols are in place for gold, silver,
copper, lead, and zinc.
The engineering and technical content of the Feasibility Study
and Underground PEA has been reviewed and approved by Mr.
Dustin Small, P.Eng., Vice President
of Projects for Adventus, a non-Independent Qualified Person, as
defined by NI 43-101.
Qualified Persons
The Mineral Resources disclosed in this press release have been
estimated by Ms. Dorota El Rassi,
P.Eng., SLR Consultant Engineer, independent of Adventus. By
virtue of the education and relevant experience, Ms. El Rassi is
"Qualified Person" for the purpose of National Instrument 43-101.
Ms. El Rassi has read and approved the contents of this press
release as it pertains to the disclosed Mineral Resource
estimates.
Philip De Weerdt, Pr.Eng., MBA,
Project Manager for DRA Americas Inc. is the Independent Qualified
Person for the infrastructure, cost estimates, and financial
results contained in this news release. Mr. De Weerdt, Pr.Eng.,
MBA, has been directly involved in the planning, implementation,
and reporting of all related results.
Daniel Gagnon, P.Eng., Principal
Mining Engineer for DRA Americas Inc. is the Independent Qualified
Person for the open-pit mine design and mineral reserves contained
in this news release. Mr. Gagnon, P.Eng., has been directly
involved in the planning, implementation, and reporting of all
mining related results.
Andre-Francois Gravel, Senior
Mining Engineer for DRA Americas Inc. is the Independent Qualified
Person for the underground PEA contained in this news release. Mr.
Gravel, P.Eng., has been directly involved in the planning,
implementation, and reporting of all results for the underground
PEA.
Volodymyr Liskovych, PhD, P.Eng., Principal Process Engineer for
DRA Americas Inc. is the Independent Qualified Person for the
mineral processing information contained in this news release. Mr.
Liskovych, PhD, P.Eng., has been directly involved in the planning,
implementation, laboratory work, and reporting of all process
related results.
Brett Stephens, RPEQ, CPEng,
P.Eng, P.E., Principal, Senior Geotechnical Engineer for Klohn
Crippen Berger is the Independent Qualified Person for the Tailings
and Waste Rock Facility information contained in this news release.
Mr. Stephens, RPEQ, CPEng, P.Eng, P.E., has been directly involved
in the planning, implementation, and reporting of all results.
Ken Embree, P.Eng., President of
Knight Piésold is the Independent Qualified Person for the
environmental and community information contained in this news
release. Mr. Embree, P.Eng., participated in the planning,
implementation, and reporting of all results.
Each of the individuals above are IQPs for the purposes of NI
43-101. All scientific and technical information in this press
release in respect of El Domo and or the Feasibility is based on
information prepared by or under the supervision of those
individuals.
The Mineral Resource estimate and Mineral Reserves statement in
this news release has been classified in accordance with CIM
Definition Standards – For Mineral Resources and Mineral Reserves
(May 14, 2014). An NI 43-101
Technical Report will be filed on SEDAR within 45 days of the
disclosure of this news release.
About Adventus
Adventus Mining Corporation is an Ecuador focused copper-gold exploration and
development company. Its strategic shareholders include Altius
Minerals Corporation, Greenstone Resources LP, Wheaton Precious
Metals Corp., and the Nobis Group of Ecuador. Adventus is advancing the Curipamba
copper-gold project through a feasibility study, while continuing
to explore the broader 215 square kilometre district. In addition,
Adventus is engaged in a country-wide exploration alliance with its
partners in Ecuador, which has
incorporated the Pijili and Santiago copper-gold porphyry projects to
date. Adventus also controls an exploration project portfolio in
Ireland with South32 Limited as
funding partner as well as an investment portfolio of equities in
several exploration companies. Adventus is based in Toronto, Canada, and is listed on the TSX
Venture Exchange under the symbol ADZN and trades on the OTCQX
under the symbol ADVZF.
About Salazar
Salazar Resources Limited is focused on creating value and
positive change through discovery, exploration, and development in
Ecuador. The team has an
unrivalled understanding of the geology in-country and has played
an integral role in the discovery of many of the major projects in
Ecuador, including the two newest
operating gold and copper mines. Salazar Resources has a wholly
owned pipeline of copper-gold exploration projects across
Ecuador with a strategy to make
another commercial discovery and farm-out non-core assets. The
Company actively engages with Ecuadorian communities and together
with the Salazar family it co-founded The Salazar Foundation, an
independent non-profit organization dedicated to sustainable
progress through economic development. The Company already
has carried interests in three projects. At its maiden discovery,
Curipamba, Salazar Resources has a 25% stake fully carried through
to production. At two copper-gold porphyry projects, Pijili
and Santiago, the Company has a
20% stake fully carried through to a construction decision.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
About DRA
DRA Global Limited (ASX: DRA | JSE: DRA) is a diversified global
engineering, project delivery and operations management group.
Founded in 1984, its impressive track record spans over three
decades. With expertise in the areas of project development,
mining, mineral processing, plant optimisation, operations &
maintenance and related water, energy, and infrastructure
requirements, the company successfully delivers comprehensive
solutions to the resources sector. DRA has detailed design and
construction at its core but also supports major innovations to
drive cost savings at the Preliminary Economic Assessment and
Feasibility Study level while focused on guiding these projects
through to construction. DRA has offices
in Africa, Australia, Canada, Peru, China, and the
United States.
This press release contains "forward -looking information"
within the meaning of applicable Canadian securities laws.
Forward-looking statements are based on the beliefs, expectations,
and opinions of the management of the Partners as of the date the
statement is published, and the Partners assumes no obligation to
update any forward-looking statement, except as required by law. In
certain cases, forward–looking statements can be identified by the
use of words such as "plans", "expects", "outlook", "guidance",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "believes", or variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "would", "might", "will be taken", "occur" or "be
achieved" or the negative of these terms or comparable
terminology.
Forward-looking statements relate to future events or future
performance and reflect management's expectations or beliefs
regarding future events including, but not limited to, statements
and information related to the results of the Feasibility Study
and updated Mineral Reserves for El Domo, including the forecasted
economics of the Curipamba project, expected gold, silver,
copper and zinc production (and the grade of such gold, silver,
copper and zinc production) from the Curipamba project and
projected operating and capital costs associated with the
Company's planned operations at the Curipamba project, the Proven
and Probable reserves of gold, silver, copper and zinc, the
capacity of tailings facility with regard to significant reserve
additions, process optimization resulting from the addition of a
lead concentrate circuit providing a third saleable product and
allowing for the production of clean copper and zinc concentrates
with minimal Pb penalties, and the self-sufficiency of water
requirements through the use of rainfall/surface water on site;
statements and information related to the results of the PEA,
including the forecasted economics of the Underground PEA, the
commencement of the Underground PEA upon the exhaustion of the
open-pit reserves in year 10, the development capital being
deployed with respect to the Underground PEA in year 9, the
additional indicated and inferred gold, silver, copper and zinc
resources, the plan to upgrade underground resources to a reserve
by means of additional drilling and test-work supporting a separate
feasibility study costing approximately US$8M over 2.5 years; statements and information
relating to the mining process; the projected taxes and LOM
royalties to the Ecuadorian government within the exploitation
agreement; the 2% NSR royalty payable to Altius Mining Corporation;
statements and information relating to the ESIA, including the
expectation the ESIA will be submitted to the Ecuadorian
government in November, 2021, expectation approval will be
received by October 2022, and the
permitting and approval process for the main access road and power
lines having been initiated and the community consultations for
the El Domo project; statements and information relating to the
discussions regarding the up to US$240M non-equity financing; the progression of
various workstreams which are anticipate to cost US$25M to complete; filing the Technical Report
summarizing the results of the Feasibility Study by the Partners
with 45 days of the disclosure of this news release; the
estimated mine life of the Curipamba project; gold, silver,
copper and nickel price assumptions; exchange rate
assumptions; the merits of the Curipamba project; and
other statements regarding future plans, expectations, guidance,
projections, objectives, estimates and forecasts, as well as
statements as to management's expectations with respect to such
matters.
Forward-looking statements are necessarily based upon estimates
and assumptions, which are inherently subject to significant
business, economic and competitive uncertainties and contingencies,
many of which are beyond the Partners' control and many of which,
regarding future business decisions, are subject to change.
Assumptions underlying the Partners' expectations regarding
forward-looking statements or information contained in this press
release include, but are not limited to, the Partners will be able
to accomplish its plans and objectives with respect to the
Feasibility Study, PEA, ESIA and the Curipamba project on the
expected timeline; market fundamentals will accord with the
estimates and assumptions contained in the Feasibility Study and
PEA; the receipt of any necessary approvals and consents in
connection with the development of the Curipamba project in a
timely manner; that the cost estimates presented in the
Feasibility Study and PEA are representative of the actual costs
associated with the development, operation and closure of the
Curipamba project; sustained commodity prices such that the Project
remains economically viable; and that the geology of the
Curipamba project accords with the expectations and projections
presented in the Feasibility Study and PEA and that the Partners
will be able to mine at the Curipamba project in accordance
with the specifications set out in the Feasibility Study and
PEA.
By their very nature, forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Partners to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include, among others, risks related to
the ability of the Partners to accomplish its plans and objectives
with respect to the Feasibility Study, PEA and the Project within
the expected timing or at all, including the ability of the
Partners to improve the economics and finance-ability and de-risk
the Curipamba project; the timing and receipt of certain approvals
and the risk that certain necessary approvals may never be
received; changes in commodity and power prices; changes in
interest and currency exchange rates; that the cost estimates
presented in the Feasibility Study and PEA may not be
representatives of the actual development, construction,
operational and closure costs associated with the Curipamba
project; risks inherent in exploration estimates and results; the
timing and success of the development of the Curipamba project
is not guaranteed and the Partners may not construct and operate
the Curipamba project on the timelines or in the manner presented
in the Feasibility Study or PEA, or at all; that the Partners may
be unable to conclude the US$240M
non-equity financing and may be required to pursue other methods
of financing the Curipamba project, or may be unsuccessful in
financing the Curipamba project; inaccurate geological, mining,
and metallurgical assumptions (including with respect to size,
grade and recoverability estimates, estimates of mineral reserves
and resources and mine life estimates); changes in development or
mining plans due to changes in logistical, technical or other
factors; unanticipated operational difficulties (including
failure of plant, equipment or processes to operate in accordance
with specifications, cost escalation, unavailability of materials,
equipment and third party contractors, delays in the receipt of
government approvals, industrial disturbances or other job action,
and unanticipated events related to health, safety and
environmental matters); that the Partners may not be able to
increase expected mine life or expected gold production through
resource conversion, project extension and exploration; political
risk; social unrest; changes in general economic conditions or
conditions in the financial markets; and other risks and
uncertainties that are more fully described in the Partners'
respective most recent annual information form, interim and
annual consolidated financial statements and management's
discussion and analysis of those statements, all of which are
filed and available for review under the Partners' respective
profiles on SEDAR at www.sedar.com . Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements. In addition,
there can be no assurance regarding the achievement or timing of
the Partners' exploration, development, construction or commercial
production objectives.
Although the Partners has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results not to be as anticipated, estimated or intended. The
Partners provides no assurance that forward-looking statements
will prove to be accurate, as actual results and future events may
differ from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements.
SOURCE Adventus Mining Corporation