Metco one study closer to production

A prefeasiblity study for Metco Resources (MKO-V) Caber and Caber North zinc-copper deposit in Matagami, Quebec, found the project would generate a net positive cash flow of nearly $20 million with an internal rate of return of 30.34%.

But Metco president Florent Gauthier is waiting until he has a second prefeasibility study in his hands for the Orphee zinc-copper project before he makes any decisions beyond drilling. The second study is due in August.

Metco owns 100% of the Caber and Caber North project and has a 50% interest in Orphee with Breakwater Resources (BWR-T, BWLRF-O) holding the remainder.

The prefeasibility study is an earmark for production, Gauthier says. But we need a feasibility study and we need to do more drilling.

For both projects, milling would be done at Breakwaters Langlois mill in Lebel-sur-Quevillon at a rate of 1,000 tonnes per day.

Caber has a probable reserve of 589,000 tonnes grading 8.58% zinc, 0.84% copper, 8.89 grams silver per tonne and 0.13 grams gold, which was calculated based on an lower indicated resource of 494,000 tonnes grading 10.9% zinc, 1.1% copper, 11 grams silver and 0.15 gram gold per tonne.

The inferred resource for Caber is 171,000 tonnes grading 8.4% zinc, 1.3% copper 11 grams silver and 0.17 gram gold per tonne.

The project would last a total of 40.5 months 25.5 months of production and 15 months for construction.

Ore would be shipped 38 km by truck and 110 km by rail to the Langlois mill.

Gauthier says the Caber deposit will be the focus over Caber North for drilling this fall because it is shallower (1 to 300 metres) and has the indicated resource status.

Caber North needs to be drilled from underground, starting at the 350-metre level.

The company plans to drill another 4,000 metres this year.

Metco shares remained unchanged at 13 a piece after a volume of 1.3 million shares traded today.