An updated feasibility study of the Langlois base metal mine in northwestern Quebec has
The study takes into account the recently blocked-out 419,600 tonnes grading 8.1% zinc and 1.7% copper, plus 46.9 grams silver and 0.1 gram gold per tonne. The new reserves are found in the 97 zone, one of three mineralized portions of the deposit. The new reserves, based on a 28-hole, 11,500-metre program of infill drilling, have added a year to the mine’s life.
The project’s net pretax cash flow is now pegged at $70.1 million, up from $60.9 million under a 2001 study by SRK Consulting. Similarly, the internal rate of return (IRR) and net present value (NPV), at an 8% discount, have climbed to 25.3% and $30.9 million, respectively, from 24% and $26.4 million.
The new study employs an exchange rate of US70 per Canadian dollar, up from US66 in the previous report. The study assumes metal prices of US50 per lb. zinc, US80 per lb. copper, US$5 per oz. silver, and US$343 per oz. gold.
The operating cost per pound of payable zinc, including smelting, shipping and byproduct copper and precious metal credits, is US38.
Faced with zinc prices at near 16-year lows (currently around US36 per lb.), Breakwater also tested the project’s economic viability based on a long-term zinc price of US45 per lb. In that case, the total net pretax cash flow is projected to be $41.5 million, the IRR is 15.2%, and the NPV is $12.6 million. Operating costs are estimated at US36 per lb. of payable zinc.
Breakwater figures it would cost $16.4 million to return the mine to production; another $21.8 million of capital is required to keep it running over its lifetime. Most of the capital would be applied to the underground mine.
Under the new plan, 3.3 million tonnes of reserves running 10.8% zinc, 0.8% copper, 0.1 gram gold, and 52 grams silver per tonne would be milled over eight years.
The reserves are part of a larger, 5-million tonne resource grading 11.2% zinc, 0.8% copper, 0.1 gram gold, and 54 grams silver. There are also 1.25 million tonnes of inferred material grading 9.7% zinc, 0.5% copper, 0.1 gram gold, and 40 grams silver.
Life-of-mine metal-in-concentrate production is pegged at 335,000 tonnes zinc, 22,700 tonnes copper, 2,600 oz. gold, and 2 million oz. silver.
The study incorporates several operating improvements, including the elimination of ore passes for Zone 97, a steel-lined storage bin, pre-development of several sub-levels in Zone 97 to allow for continuous high-grade ore production on the resumption of mining, and improvements to underground equipment.
Langlois was closed in 2001 when problems associated with the main ore pass combined with low metal prices to render the operation uneconomic. Breakwater is looking for zinc prices to improve before resuming mining. The company also needs to secure financing.
Meanwhile, the company has completed the sale of its 60% stake in the nearby Lapa high-grade gold project to
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