Silvercorp (TSX:SVM) Outlines Economics and Mine Plan in Condor Project PEA

Highlights

• The Condor gold project PEA outlines a 13-year underground mining operation with multi-metal production.
• The study reports an after-tax NPV of USD 522 million at base case prices and USD 1,559 million at near spot prices.
• Initial capital costs are estimated at USD 292 million with a post-tax payback period of three years.

Silvercorp Metals Inc. (TSX:SVM) has released the results of a Preliminary Economic Assessment (PEA) for its Condor gold project in Ecuador. The assessment is based on a Mineral Resource Estimate prepared in accordance with National Instrument 43-101 standards and evaluates the technical and economic parameters of a proposed underground mining operation.

PEA Economic Overview

The PEA presents economic outcomes under two pricing scenarios. At base case metal prices of USD 2,600 per ounce of gold, USD 31.00 per ounce of silver, USD 1.27 per pound of zinc, and USD 0.91 per pound of lead, the project delivers an after-tax net present value (NPV) at a 5% discount rate of USD 522 million and an internal rate of return (IRR) of 29%.

Using near spot metal prices of USD 4,300 per ounce of gold and USD 60.00 per ounce of silver, while maintaining zinc and lead price assumptions, the after-tax NPV increases to USD 1,559 million with an IRR of 61%. The assessment outlines an initial capital requirement of USD 292 million and a post-tax payback period of approximately three years from the start of commercial production.

Mine Life and Production Profile

The Condor project is planned as a 13-year underground operation, excluding a two-year construction period. Over the life of mine, payable production is estimated at approximately 1.375 million ounces of gold, 5.27 million ounces of silver, 95.7 million pounds of zinc, and 8.45 million pounds of lead.

Mining is designed to achieve a steady-state processing rate of 1.8 million tonnes per year, equivalent to 5,000 tonnes per day. Commercial production is scheduled to commence in Year 1, with full ramp-up expected in Year 2. Total run-of-mine material over the mine life is estimated at 21.33 million tonnes.

Capital and Operating Cost Structure

The PEA contemplates a contractor-operated underground mine employing longhole open stoping methods. Initial capital costs include underground development, surface infrastructure, and mill construction. Average life-of-mine all-in sustaining costs are estimated at USD 1,258 per ounce of gold, net of by-product credits.

Total operating costs are estimated at USD 95.51 per tonne milled, inclusive of mining, processing, administration, royalties, and statutory profit-sharing arrangements. The project benefits from favourable site characteristics, including shallow access to mineralization, suitable rock mass conditions, and proximity to existing road infrastructure.

Processing Flowsheet and Metallurgy

The proposed processing plant is designed to treat 5,000 tonnes per day using a gravity concentration and carbon-in-pulp cyanidation circuit to produce gold-silver doré. Sequential flotation will recover additional silver, lead, and zinc into separate marketable concentrates. Gold recovery to doré is estimated at approximately 94% over the life of mine.

Mineral Resource Basis and Study Limitations

The PEA incorporates inferred mineral resources, which are considered geologically speculative and do not have demonstrated economic viability. As a result, there is no certainty that the economic outcomes outlined in the assessment will be achieved. The Mineral Resource Estimate was updated using revised metal price assumptions and mining parameters consistent with the PEA study.

Silvercorp noted that additional drilling at the Los Cuyes deposit has not been incorporated into the current Mineral Resource Estimate, as the new data is not expected to materially affect the overall resource model.