en.Wedoany.com Reported - Kootenay Silver Inc. (TSXV: KTN) (OTCQX: KOOYF) has announced the results of a Preliminary Economic Assessment (PEA) for its 100%-owned La Cigarra silver project in Chihuahua, Mexico, demonstrating positive potential economic viability. The project is located in the historic Parral Mining District, which hosts neighboring operating mines such as the Santa Barbara mine and the San Francisco Del Oro mine, producing 440 million ounces of silver from 1650 to 1988 and continuing production to this day. Information disclosed from neighboring mines does not necessarily indicate mineralization at this project.
According to the PEA, at consensus metal prices and a 5% discount rate, the project has an after-tax net present value (NPV) of $763 million and an after-tax internal rate of return (IRR) of 41%. At spot metal prices, the after-tax NPV reaches $1.295 billion with an IRR of 64%. The project's initial capital cost is $332 million, sustaining capital costs are $80 million, and the after-tax payback period is 1.9 years. The study assumes a mine life (LOM) of 14 years, a processing capacity of 6,000 tonnes per day, and an average silver recovery rate of 89.3%. In terms of production, average annual silver production is 6.22 million ounces in Years 1 to 5, average annual payable silver production over the LOM is 4.55 million ounces, total payable silver production is 63.6 million ounces, and the average all-in sustaining cost is $18.73 per ounce of silver. Average annual after-tax revenue is $107 million.
James McDonald, President and CEO of Kootenay Silver, stated that the PEA is an important milestone in advancing La Cigarra toward development, and the project's long-term operational potential, strong annual production, and IRR indicate its attractiveness in one of Mexico's premier mining districts—a district that has been producing for nearly 500 years. Chairman Ken Berry noted that the study validates the company's strategy of advancing its silver asset portfolio, and the company is evaluating next steps to unlock additional value through resource expansion, engineering optimization, and advancing permitting and feasibility engineering.
The project's mineral resource estimate (MRE) forms the basis of the PEA. Indicated mineral resources are estimated at 23.02 million tonnes grading 81 g/t silver, 0.06 g/t gold, 0.14% lead, and 0.19% zinc, with a silver equivalent grade of 93 g/t, containing 60.02 million ounces of silver, 45,200 ounces of gold, 71.3 million pounds of lead, and 97 million pounds of zinc. Inferred mineral resources are 6.78 million tonnes grading 79 g/t silver, 0.05 g/t gold, 0.15% lead, and 0.17% zinc, with a silver equivalent grade of 90 g/t, containing 17.25 million ounces of silver, 11,900 ounces of gold, 22.7 million pounds of lead, and 25.5 million pounds of zinc. In addition to silver, the deposit contains by-product metals such as gold, lead, and zinc. The project is located approximately 20-30 kilometers south of La Cigarra, along the same mineralized trend, and is being mined to depths of up to 2,000 meters.
The PEA envisions a conventional open-pit mining operation, crushing and grinding circuits, flotation and leaching plants, and tailings and waste rock management facilities. The project area still has expansion potential along strike and at depth, with mineralization distributed along a broader 9-kilometer trend, providing potential for further exploration. The company has identified multiple value enhancement opportunities, including resource expansion drilling, resource category upgrades, metallurgical optimization, and mine plan optimization. Next steps include initiating additional drilling, advancing environmental baseline studies, conducting geotechnical and hydrogeological investigations, and evaluating feasibility study opportunities.
The complete NI 43-101 technical report supporting the PEA will be filed within 45 days of this news release. The PEA was authored by multiple independent consultants, including Shervin Teymouri (P.Eng.), Marinus André de Ruijter (P.Eng.), Allan Armitage (PhD. P.Geo.), Antonio Loschiavo (P.Eng.), Stacy Freudigmann (P.Eng. F.AusIMM.), and Craig Hall (P.Eng.), from Sacré-Davey Engineering Inc., SGS Canada Inc. Geological Services, AKF Mining Services Inc., Canenco Consulting Corp., and Knight Piésold Ltd. Mr. Dale Brittliffe, Vice President of Exploration for the company, has reviewed and approved the scientific and technical content of this news release.
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