Vancouver-based Tinka Resources said its Ayawilca zinc project in Peru will have an after-tax NPV of US$433 million and an Investment Rate of Return of 32% at zinc priced $1.20 per pound. 

If zinc prices rise to $1.50/lb, the after-tax NPV will increase to US$785 million and IRR grows to 45.7%. 

Production is expected to begin in 2025 after 18 months of construction and commissioning. 

Initial capital expenditure for the mine will come to US$264 million with an after-tax IRR of 31.9%, the company said. Sustaining Capex is US$186.8 million, with closing costs estimated to be US$15.2 million. 

Average annual production will amount to approximately 155,00 t/y of zinc concentrate, which would make Ayawilca the top zinc producer on the continent.  

The PEA envisions a mine-life of 14.4 years with 43.5 million tonnes grading 5.56% zinc, 14.5 g/t silver and 0.20% lead, producing a total 4.45 million tonnes of zinc. 

The mine will process 8,500 t/day, with an annual zinc concentrate production of 309,000 dmt/year. Processing costs are anticipated at US$7.10/t, with mining costs at US$32.79/t, for overall operating costs of US$44.16/t. 

Indicated resources are 19.0 million tonnes at 7.15% zinc for 2.9 million pounds, 16.8 g/t silver for 10.3 million ounces, and 0.21% lead for 87 million pounds. Inferred resources are 47.9 million pounds, with 5.36% zinc for 5.7 million pounds, 20 g/t silver for 30.7 million ounces, and 0.35% lead for 370 million pounds. 

Three mine portals to the underground mine will lead to production areas at West and South Ayawilca, transported by truck. 

Mill feed will be processed using standard crushing and grinding circuits, with a recovery rate for zinc at 92% and for silver-lead concentrate at 45%. 

Sixty percent of on-surface tailings thickened and filtered to become dry stack. The remaining 40% of tailings will be mixed with cement to be used as backfill. All mine waste rock will also be used as backfill. 

Further exploration will also be undertaken, chief executive Graham Carman said. "Several targets at Ayawilca remain to be drill-permitted, and we have filed for an extended permit to cover those areas," he said.  

The Zinc Zone has not been fully delineated, and remains open to the northeast, south, and southwest.  

Exploration is also underway at the neighboring Silvia copper-gold project, he said. 

Ayawilca is fully permitted for a Prefeasibility Study. The project is wholly owned by Tinka, as is the Silvia project.