The Sierra Mojada project lies within a historical high grade silver, lead, zinc mining district discovered in 1879, located 250km North of the city of Torreon in Coahuila State, Mexico. The project is 100% owned and operated by Silver Bull Resources, Inc. and is part of a large land package consisting of 40 mining concessions totalling 21,167 hectares (52,305 acres). The main zone of mineralization found at Sierra Mojada extends over 6 kilometers in an East-West direction along the base of the Sierra Mojada Range coincident with the Sierra Mojada fault. Over 54 historical mine shafts lie along this strike, mining to depths in-excess of 200 meters. The area has not been mined with modern mining technology and processes.
- Pre-tax Net Present Value ("NPV") at a 5% discount rate of $641.1 million and an Internal Rate of Return ("IRR") of 26.9%;
- After-tax NPV at a 5% discount rate of $463.9 million and IRR of 23.1%;
- After-tax payback of 2.9 years after plant start-up;
- Pre-production capital cost ("CAPEX") of $297.2 million including a 15% contingency;
- Sustaining Capital of $79.6 million over life of mine ("LOM") including a 15% contingency;
- An 18 year mine life, mining and processing 55.9 million tonnes of ore at 8,500tpd, averaging 73.4 grams per tonne ("g/t") silver and 2.79% zinc, and producing 98.4 million ounces of silver doré, and 982,000 tonnes of a high quality zinc concentrate (64% Zinc concentrate grade);
- An overall strip on the open pit of 5.6:1, with the first 5 years of production of the phase 1 pit having a lower strip of 3.6:1;
- An average payable silver production of 5.5 million ounces of silver per year with a LOM cash cost of $6.58 per ounce of silver, net of by-product credits.
- Years 2 to 6 will produce an average of 7 million ounces a year with a peak production of 9.3 million ounces of silver in year 2;
- The JDS Study does not take into account the potential mining of an additional 37 million tonnes of "lower" grade ore which lies immediately outside of the pit and has the potential to extend the current projected mine life.
NI43-101 Resource Estimate
A summary of the mineral resource estimate for silver and zinc at various silver cutoff grades is as follows:
|Silver & Zinc Resource Inside the Lerchs-Grossman Optimized Pit|
|> 80 g/t||19,200,000||146.3||90.3||1.54||651,800,000|
|> 65 g/t||25,300,000||128.4||104.4||1.52||846,000,000|
|> 55 g/t||31,300,000||115.3||115.9||1.48||1,017,500,000|
|> 45 g/t||39,900,000||101.1||129.6||1.42||1,243,800,000|
|> 35 g/t||52,400,000||86.4||145.6||1.37||1,577,900,000|
|> 25 g/t||71,100,000||71.5||163.4||1.34||2,106,800,000|
|> 15 g/t||94,500,000||58.7||178.4||1.27||2,644,700,000|
In addition to silver and zinc in the "indicated" category, an "inferred" resource of lead and copper was also estimated based on the various silver cutoff grades. The lead and copper resource is as follows:
|Lead & Copper Resource Inside the Lerchs-Grossman Optimized Pit|
|INFERRED||Silver Cut off Grade (g/t)||Tonnes||Lead Grade (%)||Pounds Lead (lbs)||Copper Grade (%)||Pounds Copper (lbs)|
The Sierra Mojada project contains 2 distinct zones:
Shallow Silver Zone: a near surface silver oxide zone (+/- zinc & lead) hosted along the Sierra Mojada fault system. Supergene processes have re-mobilized and re-constituted an original sulphide mineralization as oxides into the current 'manto' deposit style we see today hosted in the fault system. It is a coherent ore body that is 3.8km long, up to 200m wide and 140m thick.
Zinc Zone: a well-defined zinc oxide ore body situated directly below and adjacent to the Shallow Silver Zone. Mining out the silver resource above decreases the strip ratio to mine the zinc oxide and dramatically improves the economics of extraction.
The geology is composed of a well preserved Cretaceous carbonate platform typical of a marine transgression deposited on top of Jurassic 'San Marcos' Red Bed conglomerates. The main zone of mineralization is hosted along the Sierra Mojada fault which lies at the base of the Sierra Mojada Massif and cross cuts the rock package in an east-west direction.
The mineralization at Sierra Mojada has strong analogies with a number of different deposit styles which includes; Carbonate Replacement Deposits (CRD), Irish-type deposits, and possibly Mississippi Valley Type (MVT). Although an intrusive system has yet to be found, elevated copper, molybdenum, arsenic, and mercury in the area all point to a likely intrusive source.
A second step in the forming of the main zone at Sierra Mojada has seen supergene processes re-mobilize and re-constitute the original sulphide mineralization as oxides into the current 'manto' deposit style we see today. This cyclical leaching over a long period of time has in particular mobilized the silver and zinc in the system and re-deposited them into the fracture and cavern (karst) systems developed along the Sierra Mojada fault zone. The different solubility of these metals has resulted in a crude "zoning" within the ore body, creating zones that are "silver rich", and "zinc rich".