ScoZinc poised for production in Nova Scotia

ScoZinc Mining Ltd. [SZM-TSXV; SWNLF-OTC] said Monday December 24 that it is poised to be one of Canada’s next base metal producers after releasing a project update and improved economic study for its wholly-owned ScoZinc zinc-lead mine in Nova Scotia.

The forecast came after the company said it has completed additional technical and economic optimization studies to update the February 2018 Preliminary Economic Assessment for the mine. “Project returns remain very robust as increased throughput, lower Canadian dollar assumption, and lower initial capital largely offset lower metal price assumptions,” the company said in a press release.

On Monday, ScoZinc shares eased 1.75% or $0.01 to 56 cents. The stock is trading in a 52-week range of $1.53 and 56 cents.

ScoZinc is an established zinc and lead exploration and development company that owns the ScoZinc Mine near Halifax. The mine last operated from mid-2007 through early 2009 before it was shut down following a dramatic decline in zinc and lead prices during the 2008-2009 financial collapse.

The updated PEA envisages the sequential development of two open pit operations on the Main deposit, followed by the development of the Northeast deposit.

Both pits are located in close proximity to the mill. A small underground operation ranging from 250 to 500 tonnes per day will be mined in year five to provide high-grade mineralization for blending with the open pit feed.

Highlights of the updated PEA include a revised mill process plan to incorporate a recently purchased SAG mill, which allows for higher throughput, as well as updated and refined capital and operating costs.

Additionally, changes in market conditions and outlook in late 2018 warranted revisions to some of the base case assumptions incorporated into the revised PEA, particularly a downward revision to metal prices and the Canadian dollar to U.S. dollar exchange rate.

Project economics are based on a US$1.15 per pound zinc price, US95 cents per pound for lead and an exchange rate of 0.77 (CAD to USD).

“We are encouraged by the results of the updated PEA, which supports the near-term restart of an historic zinc-lead mine in Nova Scotia,” said ScoZinc President and CEO Joseph Ringwald. “The incorporation of our recently acquired SAG mill into this economic study, coupled with our refined mine plan based on a 3,000 tonne-per-day throughput, greatly improves the economic returns of an already robust operation,” he said.

“With restart capital in the order of $26 million (including working capital), the involvement of MRI Trading AG with $15 million offtake debt and equity financing for the restart, ScoZinc is well-positioned to be one of Canada’s next base metal producers.”

ScoZinc says combined global mineral resources for the Main, Northeast and Getty deposits stand at 12.2 million tonnes (measured and indicated), grading 2.75% zinc, 1.60% lead, and 4.68% zinc equivalent. On top of that is an inferred resource of 4.6 million tonnes, grading 2.22% zinc, 1.53% lead and 4.05% zinc equivalent.

The mineral resource estimate for the Main and Northeast deposits have an effective date of August 24, 2012. The mineral resource estimate for the Getty deposit has an effective date of March 28, 2011.