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Myanmar Metals Limited (ASX: MYL) is a metals and mining company based in West Perth, Western Australia. The company has a majority stake of 51% in Bawdwin deposit located in Shan State, Myanmar. It is a high-grade polymetallic deposit having an outstanding and untested result.
On 6th May 2019, the company announced maiden reserve and pre-feasibility study (PFS) results from the Bawdwinâs Starter Pit.
PFS Results
The PFS study has clearly shown strong financials (project cash flows and valuation) for the Starter Pit and only 26% (24.7 Mt of mineralised material) of the current total mineral resource estimate for the Bawdwin deposits had been processed. Bawdwinâs Starter Pit would be the third largest lead producing mine in the world in a steady state production.
The company believes that it represents a conservative and achievable case to present to stakeholders as it combines results of work completed in conjunction with the leading consultants in a variety of disciplines.
After the PFS study, the definitive feasibility study (DFS) will be carried out to finalise the development options for Bawdwin and resolve physical and financial estimates with a higher degree of certainty.
Physical Metrics of the Project
The mine life and processing life is estimated at 13 years with a total mined material of 19.1Mt (annual estimate), having a total of 222.9Mt of material throughout the mine life. Total metal recovered to concentrate estimate for the entire mine life stood as; 1,385.9 kt of lead, 118,798.7 kOz of silver and 555.4 kt of zinc
The average processing grade for lead, silver and zinc were estimated at 6.4%, 168.1g/t and 3.2%, respectively.
Financial metrics of the project
The project revenue for the entire mine life is estimated at US$5.89 billion, with US$2.6 billion of operating cost. EBITDA is estimated at US$1.78 billion and undiscounted free cash flow at US$1.45 billion. The net present value of the mine is estimated at US$580 million or A$828 million with 8% real discount rate, having a payback period of 4 years.
The average prices of metals throughout the mine life are estimated at US$2,170/t for lead, US$17.3 Oz for silver and US$2,535/t for zinc.
Maiden ore reserve declared
In the maiden ore reserves estimates, the company declared 18.4 Mt grading 6.4% lead, 169 g/t silver and 3.4% zinc.
Probable ore reserves attributed 74% of production from the Starter Pit, and the balance is drawn from the inferred mineral resources. During the four year payback period of the project, 92% of the processed material will be from probable ore reserves and the remaining 8% from inferred mineral resources.
On 11th March 2019, the company announced drilling results of the Western Hangingwall lode.
Technical Outlook
The market capitalisation of the company is A$102.1 million. The 52-week high and low of the stock is A$0.09 and A$0.049, respectively. The stock at market close was trading at A$0.080, down by 4.762% as of 6th May 2019. On a YTD and the last one-year basis, the stock has delivered a return of 33.33%.
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