Rockcliff Metals (CSE: RCLF) has released the results from a preliminary economic assessment (PEA) for its 100%-owned Tower and Rail projects in the Flin Flon-Snow Lake greenstone belt in central Manitoba.
The study envisions the development of the Tower high-grade copper deposit in parallel with the refurbishment of Bucko mill, followed by the Rail copper deposit development. Tower is about 460 km northwest of Winnipeg and 130 km southwest of the mill, and Rail is 38 km southwest of Snow Lake and 185 km to the west of the mill.
The Bucko mill was initially designed for processing nickel. Metallurgical testing earlier this year showed that it could be adapted to create copper and zinc concentrates from both Tower and Rail and the company’s Bur property, 22 km from Hudbay Mineral’s (TSX: HBM; NYSE: HBM) copper-zinc concentrator in the Snow Lake camp.
The PEA outlines a combined underground mine with a life of seven years, producing 18,600 tonnes of copper equivalent per annum at an average all-in sustaining costs (AISCs) of US$1.91 per pound.
Initial capex was pegged at $95.4 million, and the study estimates an after-tax payback period of just over two years. The PEA, which used a base case copper price of US$3.15 per lb., US$1.10 per lb. of zinc, US$1,500 per oz. of gold, and US$17.50 per oz. of silver, forecast an after-tax net present value of $71 million, at an 8% discount rate, with an after-tax internal rate of return of 30%.
“We’re very pleased with the results of the PEA,” Alistair Ross, Rockcliff’s president and CEO, said in an interview. “We’ve been able to show that these narrow veined, deeply dipping deposits are economically viable, and now our focus is on how we finance one of them.”
The Tower deposit contains 1.03 million tonnes of indicated resources grading 4.69% copper, 1.32% zinc, 0.85 gram gold per tonne, and 23.7 grams silver per tonne (5.74% copper equivalent) for 106 million lb. contained copper, 29.8 million lb. of zinc, 28,100 oz. of gold, and 783,000 oz. of silver (129.8 million lb. of copper equivalent). Inferred resources add 367,000 tonnes grading 3.53% copper, 1.05% zinc, 0.57 gram gold, and 18 grams silver (4.29% copper equivalent) for 28.6 million lb. of copper, 8.5 million lb. of zinc, 6,800 oz. of gold, and 212,000 oz. of silver (34.7 million lb. of copper equivalent).
Rail has indicated resources of 1.17 million tonnes grading 2.73% copper, 0.86% zinc, 0.8 gram gold, and 8.9 grams silver (3.52% copper equivalent) for 70.2 million lb. of copper, 22 million lb. of zinc, 30,000 oz. of gold, and 334,300 oz. of silver (90.7 million lb. of copper equivalent) and 0.7 million tonnes in the inferred category grading 3.11% copper, 0.7% zinc, 1.11 grams gold, and 8.5 grams silver (4.09% copper equivalent) for 50 million lb. of copper, 11.6 million lb. of zinc, 25,900 oz. of gold, and 199,700 oz. of silver (65.6 million lb. of copper equivalent).
“We are currently seeking approvals from the board on how we spend the balance of our money to advance us towards a production decision,” Ross said. “Meanwhile, we will continue drilling at the deposits to increase resources and, depending on the results, progress to a prefeasibility study or short circuit straight to a feasibility study.”