Maya Gold & Silver Reports Positive NI 43-101 Preliminary
Economic Assessment
Results at the Zgounder Silver Mine in Morocco
BLAINVILLE, QUEBEC--(Marketwired - Mar 5, 2014) - Maya Gold
& Silver Inc. ("Maya" or the "Corporation") (TSX-VENTURE:MYA)
is pleased to announce the results of independent NI 43-101
Preliminary Economic Assessment Study ("PEA") on the Zgounder
Silver Mine in Morocco. The PEA Study was prepared by SGS Geostat
Blainville (SGS) with the contributions of Goldminds Geoservices
Inc. Québec City (GMG) and is effective as of January 10th, 2014.
Full details of the Study in the form of a NI 43-101 technical
report will be on SEDAR and Maya's website within the next 45
days.
The Zgounder project aims to resume production at the
underground mine, previously a past-producer from 1982 to 1990; the
production was then suspended following low silver prices. The mine
and concentrator have been well maintained and at the beginning of
2013, Maya decided to rehabilitate the whole mine plant. The
concentrator and infrastructures were refurbished and the
underground mine was secured. Most of the access developments were
made available to drilling crews and geologists in order to
complete a NI 43-101 compliant mineral resource estimation.
Highlights of the
Zgounder Silver Mine PEA Study include:
- A mining life of 10 years with the current resources;
- First year silver production of 647,000 ounces, followed by a
regular production of 1,027,000 ounces per year;
- Very high mill feed grade estimated at 360 g/t Ag;
- Total operating cost of USD113.46 per tonne (averaged over the
expected mine's life);
- Additional capex requirements of USD3.8 million, including the
concentrator expansion;
- Internal rate of return of 174 per cent;
- Net present value of USD65.9 million (discounted at 6.5 per
cent) at silver price of USD22 per ounce;
- The Zgounder PEA was prepared as a strictly underground mine
related solely to the mineral resources reported on February 19,
2014.
Cautionary
Statements
The PEA is preliminary in nature and includes the use of
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. Thus,
there is no certainty that the results stated in the PEA will be
realized. Actual results may vary, perhaps materially. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.
Mineral Resource used
in PEA
The NI 43-101 compliant PEA Study was based on the undiluted
mineral resource estimate prepared by GMG reported by Maya's press
release on February 19, 2014. The table below summarizes the GMG
mineral resource estimate combining twenty-three (23) block models
and sixty-seven (67) panels of variable thickness. No cut-off grade
was applied to individual blocks, but a cut-off grade of 125 g/t
was applied to mineralized bodies and panels.
Zgounder silver deposit Base Case (is >125 g/t) Resource
Estimate (Blocks + panels).
Measured |
Indicated |
Inferred |
Measured + Indicated |
Tonnes |
Ag g/t |
Ounces |
Tonnes |
Ag g/t |
Ounces |
Tonnes |
Ag g/t |
Ounces |
Tonnes |
Ag g/t |
Ounces |
142,100 |
304 |
1,391,000 |
397,000 |
357 |
4,560,000 |
352,800 |
463 |
5,254,000 |
538,700 |
343 |
5,948,000 |
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
*Note: rounded numbers, base case mineralized body (corps) is
>125 g/t
Claude Duplessis, Senior Engineer of GMG, comments that most of
the resources consist of block models, no panels have contributed
to the measured resources. Grades are comparable to historical
production numbers.
An overall mining dilution of 10% at a grade of 50g/t Ag was
estimated, returning a mill feed grade of 360g/t Ag, similar to the
historical mill feed grade of 330g/t Ag.
Noureddine Mokaddem, President of Maya, stated: "
The results of the Preliminary Economic Assessment is an
important milestone reached at the Zgounder silver mine. We are
very excited to see such high NPV. The financial results outlined
in the PEA are highly encouraging, indicating the economic
viability of the known resources. These results support our belief
that Zgounder has the potential to develop into a major silver
producer.
Guy Goulet, CEO of Maya, added : "There is significant
upside from that PEA since the mineralization at the Zgounder mine
is still open at depth and laterally and there is a great potential
to increase its existing resources and improve the project
economics." We are expecting the Pre-Feasibility Study (PFS) by the
end of March. "
As per the press release dated February 19, 2014, GMG
recognizes in addition to the above-mentioned Measured, Indicated
and Inferred Resources that there are areas within recognized
structures and depth extensions which will require additional
drilling. These recognized structure and depth extensions can offer
additional Mineral Potential between 1.5 to 2.0 million tonnes
grading 300 to 400 g/t Ag.
The potential quantity and grade is conceptual in nature, there
has been insufficient exploration to define a mineral resource, and
it is uncertain if further exploration will result in discovery of
a mineral resource.
Project
Economics
A summary of the base case parameters and assumptions are shown
below:
Project Base Case Economic Parameters and Assumptions
Items |
Units |
Values |
|
|
|
Net silver price |
USD/oz |
22.00 |
Processed tonnage over LoM |
metric tonne |
951,250 |
Silver metal production |
ounces |
9,866,100 |
Royalty on sales |
% |
3.0 |
NPI* |
% |
5.0 |
Taxes for the first 5 years on gross revenues |
% |
0.5 |
Taxes after the first 5 years on profits |
% |
17.5 |
*Net
Profit Interest on gross profits (sales less milling and mining
costs) |
The project cash
flow summary of the base case is shown in the following table:
Project Cash Flow
Summary
Items |
Value |
|
USD |
Total revenue of silver sales |
217,054,400 |
Total operating costs |
107,925,500 |
After-tax undiscounted cash flow |
93,341,000 |
After-tax discounted (6.5%) NPV |
65,919,000 |
Project Sensitivities are shown in the following table:
Sensitivity Analysis
Parameters |
Units |
-30% |
-20% |
-10% |
0% |
+10% |
+20% |
+30% |
Capex |
Million USD |
2.6 |
3.0 |
3.4 |
3.8 |
4.2 |
4.6 |
4.9 |
NPV @ 6.5% |
Million USD |
67.1 |
66.7 |
66.3 |
65.9 |
65.5 |
65.1 |
64.8 |
Silver Price |
$/oz |
15.4 |
17.6 |
19.8 |
22.0 |
24.2 |
26.4 |
28.6 |
NPV @ 6.5% |
Million USD |
26.7 |
39.8 |
52.8 |
65.9 |
78.9 |
92.0 |
105.1 |
Opex |
Million USD |
75.5 |
86.3 |
97.1 |
107.9 |
118.7 |
129.5 |
140.3 |
NPV @ 6.5% |
Million USD |
87.2 |
80.1 |
73.0 |
65.9 |
58.8 |
51.7 |
44.6 |
Operating
Costs
The operating costs, also called operating expenditures (Opex),
are expressed in USD per tonne processed, and are summarized below.
This next Table outlines the costs of the total project.
Operating Costs
Items |
Cost |
Cost |
|
USD |
USD/t milled |
Waste development cost |
11,369,439 |
11.96 |
Ore production cost |
31,195,306 |
32.79 |
Ore process |
44,213,479 |
46.48 |
General and Administration |
8,121,880 |
8.54 |
Royalty & NPI |
13,025,438 |
13.69 |
Total |
107,925,542 |
113.46 |
Capital
Costs
The breakdown of the surface, concentrator, and underground
remaining capital cost expenditures (Capex) to be completed before
the resumption of production is summarized in the following table.
It is important to realize that the major portion of the Zgounder
project capital costs has already been expended by refurbishing the
concentrator and purchasing new equipment and infrastructure. The
sensitivity analysis suggests that the remaining capital cost has a
negligible impact on the economical results.
Capex Summary
Description |
Cost - USD |
Surface and General |
453,100 |
Concentrator |
1,886,765 |
Underground Mine |
1,447,590 |
Total |
3,787,455 |
In addition to the capital cost needed before resuming operation
and production, there is an estimated amount of USD 1,000,000
required for the sustaining and working capital included in the
cash flow.
Mining
The Zgounder deposit assumes the processing of 200 tpd for the
first year with an envisaged expansion to 300 tpd forecasted for
the remaining 9 years of production.
The Zgounder deposit is located in generally competent rock and
has a steep overall dip, making it readily mined using free falling
methods. It is recommended to use the open long-hole mining method
with sub-levels for the proposed new mining sites.
It is proposed to excavate a main ramp to connect all existing
levels below the 2,100 m level; this will facilitate the
developments and also the transportation of backfill. Above 2,100 m
elevation, the levels are accessible by adits. As the mine has
previously been in production, few new developments are required.
The total estimated additional development required is estimated of
an average of around 3.0 linear meters per working day, including
the ramp, for a total of 7,700 meters, or 232,000 tonnes for the
life of mine (LOM).
The current processing plant was built to process 200 metric
tons per day and by assuming 350 working days per year, amounting
to 70,000 tonnes per year. With the present total mineral resources
being on the order of 900,000 tonnes, the mine life would be 14
years. However, the existing mill circuit can be modified to
process approximately 300 tonnes per day while retaining most of
the existing infrastructure. Therefore, the first year is planned
at 200 tpd and the following years at 300 tpd, which represents a
total LOM of 10 years.
According to historical mine production, the mining dilution was
10% and the mining recovery 97%. These values are applied in the
PEA Study. Considering a dilution grade of 50 g/t Ag, the mill feed
grade will be approximately 92% of the mineralized resource grade
in place.
The Zgounder mine is accessible from adits on each main level,
offering the advantage of straightforward dewatering and good
natural air circulation.
Metallurgy and
Processing
At the start-up of the mill operation, the feed rate is expected
to be 200 tonnes per day, the feed grade approximately 360 g/t Ag,
and the silver recovery will be at least in the same range as it
was when the mill was in operation in the 80's, +/- 85%.
One of the limitations of the Zgounder mill is the grinding
circuit. To achieve an optimized silver recovery with the actual
cyanide leaching time, the rock has to be ground to approximately
80% minus 75 microns. To obtain this fineness the feed rate to the
ball mill cannot exceed 8 tonnes per hour or 200 tonnes per day.
Shortly after the mill start up and commissioning, as previously
discussed, the mill feed rate is planned to increase to 300 tpd. In
this scenario, ball mills will be changed sequentially for larger
autonomous units to avoid ceasing the milling operation. Presently
the ball mills are each approximately 1.70 meters in diameter by
3.0 meters in length. Since the actual ball mills are too small to
draw all of the amperage of their motors, both mills will be
replaced for larger ones (2.13 m x 2.29 m or any size mills) to
maximize the power of the motors (132 kW or 175 HP).
A further limitation is the cyanide leaching time. At 200 tpd
the leaching time is approximately 33 hours. SGS is of the opinion
that 33 hours is not long enough to obtain +90% recoveries. Thus,
in parallel with the increase of the feed rate, the mill upgrade
scenario includes two additional, and larger, leach tanks to the
existing four tanks. The rest of the circuit (counter current
decantation tanks and the Merrill Crowe circuit) will remain the
same.
The new leaching time should be on the order of 48 hours and SGS
is confident that the silver dissolution will be in the +90% range.
This new approach should permit an increase in the annual silver
production from 647,000 ounces to 1,028,000 ounces.
Waste material will undergo cyanide destruction before
deposition into the tailings pond. SGS is of the opinion that the
most recent tailings pond has the capacity to store approximately
1,000,000 tonnes of new tailings or the equivalent of all tailings
that will be produced during the next ten years of operation.
Supernatant from the tailings ponds will flow by gravity to a
small polishing pond, where it will be treated if necessary, and
approximately 80% will be pumped back to the mill. The other 20%,
free of any cyanide, will be discharged in the valley connecting to
the small Zgounder River.
Infrastructure
The processing plant is already totally refurbished and has been
partially field tested (mainly the two crushers, screens, and
conveyors units). All electric motors, speed reducers, pumps,
tanks, etc, were inspected and repaired. The laboratory was
equipped with proper instrumentation, and the tailings lines were
replaced. In conclusion the concentrator is only missing the
chemical reagents, the cyanide destruction circuit and the grinding
mediums before being operable. The mine site power generating
system was completely replaced by three new units of 1,000 kVA, and
3 new air compressors capable of delivering 1,130 l/sec.
The offices and campsite infrastructure left in place after the
closure of the mine in 1990 have been refurbished and modified. The
mine owners have decided to transport manpower daily to the village
of Askouan, located 5 km away. The road between the mine and
Askouan was completely rebuilt; including new concrete bridges and
adequate drainage.
Qualified Persons
The technical content of this news release has been reviewed by
Gaston Gagnon, Eng. and Gilbert Rousseau, Eng. from SGS Canada Inc.
and by Claude Duplessis Eng. Sr. Geological Engineer from GoldMinds
Geoservices Inc.: all independent Qualified Persons under NI 43-101
standards.
ABOUT MAYA
Maya Gold & Silver Inc. is a Canadian listed mining
corporation focused on the exploration and development of gold and
silver deposits in Morocco. Maya recently initiated mining at its
Zgounder Mine. The Corporation's shares trade on the TSX Venture
Exchange under the symbol "MYA".
For further information on Maya, visit
www.mayagoldsilver.com.
Neither 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 release.
Forward-looking statements
This release may contain forward-looking statements including
management's assessments of future plans and operations, and
expectations of future production. These statements are based on
current expectations that involve a number of risks and
uncertainties, which could cause actual results to differ
materially from those anticipated. These risks include, but are not
limited to, the risks associated with the mining and exploration
industry (e.g. operational risks in development, exploration and
production; delays or changes in plans with respect to exploration
or development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production and the uncertainty of the availability of
capital). The assumptions used in the preparation of such
statements, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements.
Maya Gold & Silver Inc.Guy GouletChief Executive
Officer450-435-0700 ext. 204ggoulet@mayagoldsilver.com
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