Firestone eyes quick start-up in Guatemala

VANCOUVER — There’s only five years of defined resources at Torlon Hill, but a preliminary economic assessment (PEA) of the zinc-lead-silver project in Guatemala suggests that owner Firestone Ventures (FV-V) 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 would only need US$26 million to get the project into production.

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

The near-surface carbonate deposit would be easy to mine — the PEA predicts that 75% of the rock can be free dug, with the other 25% requiring light blasting. Over its initial five-year 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 pre-concentrated using dense media separation before undergoing differential flotation to produce a zinc concentrate and a silver-rich lead concentrate. The washed and de-watered 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, and a payback of the US$26-million capital cost in 1.2 years.

Torlon Hill is located in west-central Guatemala and sits 22 km off the Pan-American Highway. The deposit is 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 Torlon Hill’s PEA, leaving Firestone’s share price unchanged at 4¢. Firestone 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 1-for-5 share rollback in August, Firestone now has just 24.4 million shares outstanding.