Osisko Metals releases PEA for NWT zinc mine
Osisko Metals Inc. [OM-TSXV, OMZNF-OTC] on Wednesday released the results of an updated preliminary economic assessment (PEA) for its Pine Point project in the Northwest Territories, which is expected to be a producer of ultra-clean zinc concentrate.
The objective of the 2022 PEA update was to integrate updated long-term prices for zinc and lead, increased mined resources, cost escalations in CAPEX and OPEX as well as reduced life of mine water management costs that resulted from the recently completed hydrogeological model. The latter reduced the estimated dewatering volume by 30% compared to the 2020 PEA, with potential for a further forecasted reduction of 15% as the project advances to feasibility.
The new proposed mine plan, with 18% increased tonnage to the mill, could again make Pine Point a top ten global zinc-lead producer with an annual average production of 329 million pounds of zinc, and 141 million pounds of lead over a 12-year min- life.
“On a zinc-only basis, Pine Point could potentially become a low-cost zinc-lead producer ranking fourth largest in the Americas,” said Osisko Metals Executive Chairman and CEO Robert Wares.
Wares said the PEA update still shows a very robust zinc project with viable economic metrics, including an after-tax IRR of 25%, and after tax NPV of $602 million as well as significantly increased resources. The new PEA pegs the pre-production capital expenditure at $653 million.
On Wednesday, Osisko Metals shares eased 6.1% or $0.02 to 31 cents and currently trade in a 52-week range of 69 cents and 31 cents.
Osisko Metals, which is affiliated with Osisko Gold Royalties Ltd. (OR-TSX, OR-NYSE), is a Canadian exploration and development company with a focus on zinc. Its asset portfolio includes Pine Point and the Bathurst Mining Camp properties in northern New Brunswick.
An earlier PEA was based on a life of mine plan consisting of simultaneous exploitation of open pit deposits in the East Mill, Central, North and N204 zones, concurrent with underground operations in the West and Central Zones.
In the 2022 PEA update, the Pine Point project life of mine plan would still consist of simultaneously mining open pit deposits in the East Mill, Central North and N204 Zones, concurrent with underground operations in the West and Central Zones as in the 2020 PEA.
The company said the general strategy is the same, with an average life of mine production rate of 11,250 tonnes per day mined. The open pit life of mine plan is still proposing to mine 47 open pits and nine underground deposits over a strike length of 50 kilometres, mainly located above 125 metres depth from surface.