Blackrock Silver lifts Tonopah West value by a third to $437M in Nevada’s top tier

An updated preliminary economic assessment (PEA) for Blackrock Silver’s (TSXV: BRC; US-OTC: BKRRF) Tonopah West project in Nevada lifts its value by one-third while more than doubling contained silver. Shares rose.

The assessment raises the post-tax net present value (at a 5% discount) to $437 million, a 34% rise over the NPV in the initial PEA from 2024, in price cases of $31 per oz. silver and $2,700 per oz. gold, Blackrock reported Tuesday. Mine life increases by almost 3.5 years to 11.2 years in the new PEA, compared to eight years previously. The project is located on private land near the town of Tonopah, about 300 km northwest of Las Vegas.

“This updated PEA marks a significant milestone in the systematic de-risking of the Tonopah West Project,” Blackrock CEO Andrew Pollard said in a release.

The mine plan’s anchoring to conservative precious metal prices ensures that “Tonopah West is built for high-margin resilience across all price cycles,” Pollard added.

Nevada’s top silver tier

The project’s higher value, capex under $200 million and mine life longer than 11 years potentially positions Tonopah West among the top tier for Nevada’s silver development projects, as it sits in the historic Tonopah silver district. That area produced 174 million oz. silver and 1.8 million oz. gold from 1900 to 1930.

Blackrock shares gained 15% to $1.33 apiece on Tuesday morning in Toronto, valuing the company at $470.1 million. The stock has traded in a 12-month range of 27¢ to $2.41.

Contained silver doubles

The new assessment also updates the resource for Tonopah West over last year’s update. Total indicated resources more than double to 2.75 million tonnes grading 2.25 grams gold per tonne and 216.8 grams silver, lifting contained gold by 86% to 199,000 ounces. Contained silver rises 103% to 19.1 million ounces.

Inferred resources booked more modest changes, with tonnage rising about 8% to 5.53 million tonnes grading 2.62 grams gold and 188.5 grams silver for 467,000 oz. gold and 33.5 million contained silver.  

While the new PEA improves some economics, it estimates that capital costs rise about 8% to $190 million, with a payback period of 3.5 years. The internal rate of return (IRR) is down 11 points to 28%.

In higher metal price cases of $66.90 per oz. silver and $4,554 per oz. gold, the NPV rises to $1.5 billion, the IRR to 79% and the payback period decreases to 1.4 years.

Payable metal production also rises in the update, with silver up 14% to 36.4 million oz. and gold up 17% to 496,000 ounces. That amounts to a $778 million after-tax life-of-mine cash flow.