BMC Minerals has released an updated feasibility study for its Kudz Ze Kayah polymetallic project in Yukon that lifts the project’s after tax net present value to 1.7 billion dollars, with an after tax internal rate of return of 54 percent and a payback period of 1.4 years. The pre tax internal rate of return is 65.7 percent, life of mine EBITDA is put at 4.58 billion dollars, and average annual after tax cash flow during operations is 392 million dollars, rising to 451 million dollars in the first two years. The figures include the effect of the precious metals purchase arrangement with Wheaton Precious Metals.
Nothing physical changed. The probable ore reserve is unchanged at 15.7 million tonnes grading 138 grams per tonne silver, 1.3 grams per tonne gold, 5.8 percent zinc, 0.9 percent copper and 1.7 percent lead, and the mine plan and production profile are the same as before, with 89 percent of mining from open pit and steady state output of 22 million ounces of silver equivalent a year at an average feed grade of 323 grams per tonne silver equivalent. More than half of gross revenue comes from silver and gold.
What changed is the price deck and the cost base. Long term consensus prices have risen materially since the technical assessment in BMC’s IPO prospectus, with the long term silver assumption up from 22.60 dollars an ounce to 50.80 dollars. Capital and operating costs were also restated to a June quarter basis from 2023 estimates to reflect current labour, equipment and consumables pricing. The company said the revenue gain outweighs the cost increase, which is why the economics improved without any change to the reserve or mine plan.
Managing director and chief executive Michael McClelland said the results confirm Kudz Ze Kayah as one of the standout undeveloped silver projects globally, and that the improvement was achieved without touching the underlying reserve. The project, about 260 kilometres east of Whitehorse, has already received positive federal and Yukon decision documents and moved into the permitting phase for its remaining licences, including a 25 year Type B water licence.
The honest reading of the study is that it cuts both ways. A feasibility case whose value roughly doubles because the consensus silver deck more than doubles is a leveraged claim on the silver price holding near current levels, at a moment when silver futures are down 7.12 percent on the week even after Friday’s higher settlement. BMC expects to rank among the top 25 silver and top 25 zinc mines globally once in production; financing the build, targeted around a final investment decision in late 2027 on earlier guidance, is where that claim gets priced.