Apollo Silver published a preliminary economic assessment on October 29 for the Calico silver project in San Bernardino County, California. At a base case silver price of 55 dollars an ounce, the study gives an after tax net present value at a 5 percent discount rate of 737 million dollars, an after tax internal rate of return of 25 percent, and payback three years from production. Pre tax net present value is 925 million dollars.
The plan is an open pit at the Waterloo deposit feeding an 8,000 tonne per day milling and cyanidation plant, producing doré on site for about 15 years at an average of 5 million ounces of silver a year, for total recovered silver of about 74.4 million ounces. Initial capital is 633 million dollars including a 25 percent contingency, all in sustaining costs are estimated at 26.07 dollars per payable ounce, and average mill feed grade is 84.8 grams per tonne silver at 65 percent recovery, with higher grade feed averaging 100.8 grams per tonne prioritised in the first ten years.
The updated resource, effective October 1, holds measured and indicated material of 42.2 million tonnes grading 85.1 grams per tonne silver, containing 115.6 million ounces, plus inferred material of 24.1 million tonnes containing about 51.5 million ounces. The Langtry deposit’s 49.1 million inferred ounces and the Waterloo gold domain sit outside the mine plan.
The sensitivity is the discipline in the story. At 45 dollars an ounce silver, after tax net present value falls to about 348 million dollars. A PEA includes inferred material and carries no reserves, and Apollo itself cautions there is no certainty the results will be realised. The technical report is due on SEDAR+ by December 13.