Firestone charts cheap, quick path to production in Guatemala

VANCOUVER – There’s only five years of defined ore at Torlon Hill but a preliminary economic assessment (PEA) of the zinc-lead-silver project in Guatemala suggests owner Firestone Ventures (FV-F) could build a mine at the site that would generate a 97% after-tax internal rate of return (IRR).

Even better is the news that Firestone should only need US$26 million to get the project into production.

The study planned an open-pit operation at Torlon Hill that would mine 1,700 tonnes of ore daily. The PEA only considered Torlon Hill’s oxidized mineralization, which represents the majority of the project’s defined resource.

The near-surface carbonate deposit should be easy to mine – the PEA predicts that 75% of the rock can be free-dug, while the other 25% will require light blasting. Over its initial five-year mine life the operation would bear a strip ratio of 2.57 tonnes of waste to 1 tonne of ore.

The oxidized mineralization would be crushed, screened, and preconcentrated via dense media separation before being subjected to differential flotation to produce both a zinc concentrate and a silver-rich lead concentrate. The washed and dewatered concentrates would then be shipped directly to market.

Using base-case metal prices of US$1 per lb. zinc, US$1 per lb. lead, and US$30 per oz. silver and applying a 5% discount rate, Torlon Hill carries an after-tax and after-royalty net present value of $45.4 million. The mine as envisioned is expected to generate a 97% after-tax IRR, which would enable payback of the US$26-million capital cost in 1.2 years.

Torlon Hill is in west-central Guatemala and is road-accessible, sitting just 22 km off the Pan-American highway. The deposit remains open for expansion to the west and the south and the PEA recommends further drilling to expand and upgrade the resource.

The market took no notice of the Torlon Hill PEA, leaving Firestone’s share price unchanged at 4¢. FV shares are languishing near the bottom end of their 52-week range, which stretches from 3.5¢ to a high of 35¢ from almost a year ago.

After completing a one-for-five share rollback in August, Firestone now has just 24.4 million shares outstanding.