Sotkamo Silver has completed the latest Technical Report of the Silver Mine project including updated feasibility study. Based on the economic analysis in this feasibility study, the Silver Mine project is, with current assumptions and knowledge, notably profitable. The Mineral Resources and Ore Reserves in the Technical Report has been prepared and classified in accordance JORC Code, 2012 Edition.
Based on positive results of the updated Technical Report the Board of Sotkamo Silver has decided to move the Blaiken concentrating plant equipment to Silver Mine in Sotkamo as next step in the construction work.
Summary of the Technical Report’s economic result:
- Payback: less than 2 years from start of production
- 41 % IRR, € 57 million NPV (@ 5 %)
- Lom Capex 33 M€, of which 27,4 M€ is initial investment
- Revenue (6 years): 228 M€
- EBIT 8 (6 years): 101 M€
- Cash Cost range 7 – 11 $/Oz
- All-In Cash Cost LOM average is 8,8 $/oz.
Used silver price range from 18.6-19.1 $/Oz Ag during production years and the exchange rate USD/€ is 0.88.
This Technical Report has been prepared at the request of financiers in order to provide updated technical and economic information on the project. Sotkamo Silver has decided to publish this Technical Report also to inform investors, market and shareholders about the current situation and economics of the Silver Mine project.
The scope of the report has been to compile a comprehensive updated Technical Report based on updated Mine Plan, updated Mineral Resource and Ore Reserve estimates. Basic engineering design based on pilot-plant results and updated process flowsheet has been prepared. Planned process equipment is a combination of new and suitable equipment from the purchased Blaiken concentrating plant.
The Technical Report is available on the company’s website at www.silver.fi
Since August 2016 the following investments, construction and infrastructure development works have been completed to prepare the construction start:
- Topsoil removal works from tailings dam area and Open pit area as started by hauling the topsoil to the sound barrier in the north end of Open Pit
- A new access road to the area has been constructed, which will also serve as an access road to the open pit area, and construction of a new road to the tailings management facility area has also commenced. These roads ensure access to the entire area at the site for mine construction.
- Revamp of the decline including scaling, water management (drainage canalization, new pumping arrangements and improvement of pipeline placing) and road surface improvements.
- Pre-drainage of tailings dam area.
- New Electrical 20 kV network with optical fibre & control cable works for the electrification of the Underground Mine.
- Process engineering started in beginning of April, basic engineering has been completed
- Updated water balance model
- Planning of the ventilation, heating, electrification and pumping arrangements of the UG mine completed; updating the quotes from vendors.
- Tailings Management Facility area engineering work for dams and bottom structure has been finalized and the material has been submitted to Dam Safety.
- An Environmental Impact Assesment (EIA) process concerning the updated production plan for the Silver Mine has progressed and the EIA-program to the Coordinating Authority, Kainuu ELY-centre, has already been submitted.
- Updating of the mine plans.
- Assessment of the potential vendors for the mining works.
Process plant concrete structure engineering started (foundation for building and mills).
- Process plant area civil works engineering was started
- Supporting of the decline by rebar bolting and steel nets in places.
- Strengthening of the organization and continuous improvement of operations.
- Completing the operational organization, interviewing potential candidates for the different support positions and optimising of the operational structure (i.e. In-house vs. Contractors for certain key activities like ore mining.
- Recruitment tests of the planned management
Key positions filled during the period are:
- General Manager of The Silver Mine
- Chief Geologist
- Chief Financial Officer
- Mine Supervisor
- Health and Safety
- Final Technical Report of the Silver Mine (Feasibility Study) for the financing purposes and investment purposes. The investment estimate update of this Silver Mine Technical Report 2017 is based on the firm and commercially compliant tenders and budget quotations, quotations received from pre-qualified tenderers referenced against the technical design and calculated quantities of the Project.
- Infill drilling campaign of some 1 500 meters to fill the gaps and update the mineral resource/ ore reserve estimates (reporting according to JORC) for later stage production from the mine from year 6.
- Optimisation of the life of mine plans ongoing.
- Assessment of the exploration potential of the vicinity, i.e. depth continuation of the Silver Mine and surrounding greenstone belt to increase LOM beyond Year 10.
- The process plant building engineering has commenced.
- Preparation for transfer of the Blaiken plant equipment to Silver Mine in Sotkamo.
- Ongoing financing negotiations.
“I am very proud of Sotkamo Silver’s own specialists and staff who together who with Greg Paholsky from Opcerto Asset Operations, and Pekka Veisto from CTS Engtec have done this excellent work meticulously. I am confident that our shareholders find this Technical Report very encouraging for the future success of the project. Sotkamo Silver is continuing the financing discussions with several potential financiers in positive atmosphere,” says Dr Timo Lindborg, CEO Sotkamo Silver.
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