ScoZinc reports prefeasibility study for Scotia mine

The ScoZinc mine-mill complex. Credit: ScoZinc.

ScoZinc Mining (TSXV: SZM) has released a prefeasibility study for its Scotia zinc-lead mine at Gays River, Nova Scotia. Using an 8% discount rate, the prefeasibility study gives the project an after-tax net present value of $128 million and an internal rate of return of 65%.

The pre-production capital requirement is $30.6 million for a mine with a life of 14.3 years. Payback of the investment would occur in 1.3 years. ScoZinc estimates the cumulative pre-tax free cash flow in the first three years of operation will be between $30 million and $50 million.

This study includes, for the first time, a 43-101 reserve estimate for gypsum. Total measured and indicated material is 5.2 million tonnes grading 91.8% gypsum, and the inferred portion is 790,000 tonnes at 91.2%. ScoZinc signed a gypsum offtake agreement in early November. Previous studies for the Scotia mine designated gypsum as waste rock.

Measured and indicated base metal resources are 25.5 million tonnes grading 1.89% zinc and 0.99% lead (2.84% zinc-equivalent), with inferred resources of 5 million tonnes grading 1.5% zinc and 0.66% lead (2.13% zinc-equivalent). Proven and probable reserves stand at 13.7 million tonnes grading 2.03% zinc and 1.1% lead (3.09% zinc-equivalent).

Aerial view of the Scotia mill and surface facilities. Credit: ScoZinc Mining.

The mill at the Scotia mine would have a throughput of 2,700 tonnes per day to produce a 57% zinc concentrate and 71% lead concentrate. Five-year annual production would be 35 million lb. zinc and 15 million lb. lead in concentrates. All-in sustaining costs are estimated to be US60¢ per lb. zinc-equivalent.

The mine, 62 km northeast of Halifax, has been on care and maintenance since the third quarter of 2013.

ScoZinc owns 100% of the open pit mine and mill.

The project is fully permitted, and the next step is financing. Commercial production could begin nine to 12 months after financing is arranged.

 

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