AbraSilver Announces Updated Diablillos PFS With CAD$1,046M (USD$747M) After-Tax Base-Case NPV
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AbraSilver Announces Updated Diablillos PFS With CAD$1,046M (USD$747M) After-Tax
Base-Case NPV
Toronto – December 03, 2024: AbraSilver Resource Corp. (TSX.V:ABRA; OTCQX: ABBRF)
("AbraSilver" or the “Company”) is pleased to announce the results of its updated Pre-Feasibility Study
(“PFS” or the “Study”) for the Diablillos silver-gold project (“Diablillos” or the “Project”). The PFS
demonstrates improved economics and increased confidence in the Project’s significant upside potential.
The PFS was completed by a collaborative team that included Mining Plus Peru S.A.C, Whittle
Consulting, BMining, INSA, SGS North America, Inc., and Envis Consulting.
All dollar ($) figures are presented in US dollars unless otherwise stated. Base case metal prices used in
the PFS are $2,050 per gold (“Au”) ounce (“oz”) and $25.50 per silver (“Ag”) oz.
PFS Study Highlights:
Attractive project economics: $747 million after-tax Net Present Value discounted at 5% per
annum (“NPV5%”); 27.6% Internal Rate of Return (“IRR”) and 2.0-year payback period.
o At current spot prices 1 an after-tax NPV 5% of $1,291 million with an IRR of 39.3% and
payback of 1.5 years.
Substantial silver and gold production – 13.4 Moz silver-equivalent (“AgEq”) average annual
production over a 14-year life-of-mine (“LOM”), comprised of 7.6 Moz Ag and 72 koz Au , with
average annual production of 16.4 Moz AgEq over the first five years of full mine production,
comprised of 11.7 Moz Ag and 59 koz Au.
Low All-in Sustaining Cash Costs (“AISC”)2 – Average AISC of $12.67/oz AgEq over LOM, and
$11.23/oz AgEq over the first five years of full mine production.
Initial capital expenditures - Initial pre-production capital expenditure of $544 million (including
contingency) with a further $77 million in sustaining capital over the LOM.
Significant potential for additional economic improvements – Several additional opportunities
that may further enhance the economic returns as detailed later in this release:
o Replacement of on-site self-generation from a combined solar-diesel power plant with a
connection to the national grid under a long-term power purchase agreement from a third
party. Capturing this opportunity would provide a meaningful reduction to initial capital,
lower operating costs and, potentially, improve the carbon footprint of the Project.
o A revised mine plan based on a new Mineral Resource and Reserve estimate that
incorporates the additional Phase IV exploration drilling results at JAC and the northeast
zone of Oculto as well as higher metal price assumptions. A new mine plan may present
the opportunity to reduce strip ratio, and improve operating cashflow.
o Expansion of available water resources to the Project to remove constraints on plant
throughput resulting in increased metal production.
o Treatment of marginal material currently classified as waste through secondary
processing, such as heap leaching, resulting in increased metal production.
o Improvements to the design of the Tailings Storage Facility (“TSF”) to reduce capital and
operating cost, and also decrease the environmental footprint.
1 Spot prices: $30.70/oz Ag & $2,651/oz Au closing prices on November 29 th, 2024 (Source: https://www.lbma.org.uk/
2 Please see “Non-IFRS Financial Measures”
John Miniotis, President and CEO, commented, “The updated PFS confirms Diablillos as an economically
attractive silver-gold project, with strong economics and significant growth potential that has yet to be
fully-realized. With an after-tax NPV of over CAD $1 billion (USD$747M) and a rapid payback period,
Diablillos is poised to deliver significant returns to our shareholders. Our team remains focused on
advancing Diablillos towards production while continuing to unlock additional Mineral Resource potential
through our ongoing successful exploration program.”
PFS Update – Summary of Key Changes
This PFS supersedes and incorporates several key changes and enhancements compared to the prior
PFS in respect of the Project released on March 25, 2024 (the “Prior PFS”). These changes, combined
with updated metal prices and capital and operating costs estimates, have resulted in a more robust
study which confirms that Diablillos offers compelling future development potential due to its simplicity,
grades and size. The key changes in the PFS include:
Incentive Regime for Large Investments (“RIGI”): The PFS incorporates the incentives offered under
the new incentive regime for large investments, RIGI, which was passed by the Argentinean congress in
July, 2024 and implemented in most Argentinean provinces, including Catamarca and Salta. These
incentives include:
• a reduction of the federal corporate income tax rate from 35% to 25%;
• elimination of export duties levied on gold and silver sales respectively; and
• accelerated tax depreciation of plant and equipment.
Qualifying projects with expenditures above $200M may apply for RIGI before the law expires in July,
2026, and must spend 40% of the investment amount within two years of approval (by no later than July
2028). Diablillos meets all of the required qualifications for RIGI. The PFS considers an execution plan
to obtain RIGI approval by no later than Q2 2026, giving the Project until Q2 2028 to spend 40% of the
investment, or approximately $200M. According to the Diablillos construction schedule, the $200M
threshold for committed capital will be achieved in approximately 12 months after the Project investment
decision. An investment decision would therefore be required no later than the end of Q2 2027 to ensure
the Project captures the RIGI benefits.
Mine Plan Optimization: A new mine plan has been incorporated resulting in an after tax NPV
improvement of $61M by improving the mine sequencing. These improvements include accelerated
production from the Shallow Gold zone due to more favorable expectations of blasting permits availability
and improves the gold grade and gold production in the first five years of the mine plan.
Updated Capital Costs: Total initial capital expenditures (including contingency) increased by $170M.
Beyond general cost inflation, the primary drivers behind this increase were changes to exchange rates
on imported capital goods and updating of indirect costs to reflect market conditions, as well as updated
manpower estimates during construction. The figure also includes capitalized waste stripping of $50M,
resulting from the change in mining sequence, which was previously allocated to operating costs.
Updated Operating Costs: Operating costs reflect updated diesel prices of $0.95/l at current market
conditions compared to the price of $0.71/l in March of this year, which included government subsidies
that have since been eliminated. Operating costs were also revised for updated exchange rates applied
to imported consumables.
Project Economics
Table 1 – Commodity Price Sensitivity Analysis
Economic Parameters Base Case
Prices
Spot Prices1 Down-Side
Prices
Silver Price ($/oz) $25.50 $30.70 $23.50
Gold Price ($/oz) $2,050 $2,651 $1,850
After-tax NPV (5%, USD$ / CAD$ million) $747 / $1,046 $1,291 / $1,808 $552 / $772
After-tax NPV (8%, USD$ / CAD$ million) $552 / $772 $994 / $1,392 $392 / $549
After-Tax IRR (%) 27.6% 39.3% 22.8%
Payback (years) 2.0 1.5 2.4
1Note: Spot Price as at close on November 29th, 2024, per https://www.lbma.org.uk/ USD:CAD F/X rate: 1.40
The PFS presents a range of metal pricing scenarios on an after-tax basis to evaluate the economics of
both upside and downside price scenarios. The economics of Diablillos are very robust and offer
significant leverage to both silver and gold prices, with an after-tax NPV5% of $1,291 Million and an IRR
of 39.3% at current spot silver and gold prices (Table 1).
Production Summary
Diablillos is designed as a conventional open-pit mining operation with mill throughput of 9,000 tonnes
per day (“tpd”) and an optimized production sequence targeting high-grade silver and gold mineralization
in the early years of the mine plan. Over the 14-year mine life, the Project is expected to average annual
production of 7.6 Moz silver and 72 koz gold, with an average of 11.7 Moz silver and 59 koz gold over
the first five years of full mine production (Table 2 and Figure 1). The robust production profile in the
initial years underlines the Project’s efficiency and strong cash-flow generation potential.
The processing plant has been designed for a nameplate capacity of 9,000 tpd, or 3.15 million tonnes
per annum (“tpa”) considering 350 days a year of operation. A conventional silver/gold processing plant
flowsheet was developed that incorporates crushing, grinding, gravity concentration, an intense
cyanidation circuit, cyanide leaching with oxygen addition, counter current decantation washing
thickeners and Merrill-Crowe precious metal recovery from solution followed by on-site smelting to doré
bars. The leached solids are detoxified, thickened, and pumped to a TSF for permanent disposal.
Metallurgical test work has been carried out in a range of different laboratories between 1996 and 2023
and all the results have been considered as part of the PFS. A geo-metallurgical model has been
developed segregating the deposit into five distinct domains, with overall LOM silver and gold recoveries
averaging 83.6% and 86.8%, respectively.
Tailings from the process plant will be stored in a multi-phase, fully lined, cross valley TSF. The facility
will be raised using the downstream method with the initial starter impoundment, constructed from borrow
material and open pit pre-strip waste, providing storage for the first three years of production.
Table 2 – Grade and Production Profile
Units
Avg.
First 5 Years
Full Production
Avg. LOM
(Year 1 – 14)
Silver Grades (g/t) 143 g/t 91 g/t
Gold Grades (g/t) 0.71 g/t 0.81 g/t
Silver-Equivalent Grades (g/t) 201 g/t 159 g/t
Silver Production (M oz) 11.7 7.6
Gold Production (k oz) 59 72
AgEq Production (M oz) 16.4 13.4
Note: AgEq is calculated using base case prices for silver and gold (Au/Ag price ratio of 80.39)
Figure 1 – Annual Silver Equivalent Production and Grade Profile
Operating Costs
The operating cost estimates are based on an owner-operated truck and shovel mining operation,
conventional processing plant, and TSF with power provided from an on-site combined solar-diesel power
plant.
The PFS operating cost estimates are shown on a per tonne milled basis in Table 3. The PFS estimates
that the AISC averages $11.23/oz AgEq the first five years of production, and $12.67/oz AgEq over the
LOM. This AISC is believed to be at the low end of the primary silver production cost curve2.
2 www.silverinstitute.org/wp-content/uploads/2023/11/SilverMarket2023_interim-report.pdf
0
50
100
150
200
250
300
0
5
10
15
20
25
-Year 2 -Year 1 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13
AgEq (g/t)
Ag Eq Production (Moz)
AgEq Production Moz AgEq grade g/t
Table 3 – Mine Operating Cost Estimates
Operating Costs Basis Avg. LOM ($)
Mining (ore and waste) per tonne milled 14.50
Processing Plant, Utilities and Maintenance per tonne milled 22.71
Camp and Service Hub per tonne milled 4.29
G&A and Logistics per tonne milled 3.91
Total Operating Cost per tonne milled 45.42
Project Capital Costs
The initial pre-production capital expenditures for the Project are summarized in Table 4. Capital
expenditures to be incurred after the start-up of operations are assigned to sustaining capital and are
projected to be covered by operating cash flows. Initial capital costs are estimated at $544 million
including contingency and total sustaining capital costs are estimated at $77 million. Approximately 80%
of the costs are based on quoted prices and this has resulted in a lower estimated contingency cost of
$26 million. Over 60% of equipment, supplies, construction, and service procurement packages will be
sourced from local companies, complying with local regulations.
Table 4 – Summary of Capital Cost Estimates
Description Updated PFS
Study
Prior PFS
(Mar. 25, 2024)
Change
Updated PFS vs. Prior PFS
$ millions $ millions % Change $ Change
Surface Mining 128.6 39.3 227% 89.3
Processing 111.7 96.9 15% 14.8
Site Infrastructure 166.7 152.0 10% 14.7
Owner and Indirect Costs 110.2 64.9 70% 45.3
Initial Capital Costs (excl. contingency) 517.2 353.2 46% 164
Contingency & Other Provisions 26.3 20.3 30% 6
Initial Capital Costs 543.5 373.5 46% 170
Sustaining Capital 76.5 65.0 18% 11.5
Closure 26.4 11.1 138% 15.3
Total Capital Costs 646.4 449.6 44% 196.8
Taxes and Royalties
The PFS incorporates the impact of Argentina’s recently enacted RIGI legislation designed to stimulate
new large-scale investments. Under this framework, the Company expects a competitive fiscal regime,
with key rates as follows:
Argentina corporate income tax: 25%
Municipal taxes: 1.2%
Stamp Tax 1.6%
Provincial mining royalty: 3%
Export duties: 0%
In total, the updated taxes, royalties and export duties total $536 million in the PFS, compared to $965
million under the Prior PFS. Additionally, the RIGI program provides benefits such as the removal of all
foreign exchange restrictions, value-added tax (VAT) reimbursement on capital expenditures, and tax
stability for the life of mine.
A 1% NSR royalty is payable to EMX Royalty Corporation.
Summary of Economic Results
Table 5 summarizes the key economic results and parameters of the PFS.
Table 5 – Summary of Project Economics
Metrics Units Results
Life of mine years 14
Total mineralized material mined M tonnes 42.3
Total contained silver M oz 123.4
Total contained gold k oz 1,108.2
Strip ratio (excludes pre-stripping) Waste:ore 6.2
Throughput tpd 9,000
Head grade – silver (first 5 years / LOM) g/t 143 / 91
Head grade – gold (first 5 years / LOM) g/t 0.71 / 0.81
Recoveries – silver (first 5 years / LOM) % 83.5 / 83.6
Recoveries – gold (first 5 years / LOM) % 85.2 / 86.8
Average Production – silver (first 5 years / LOM) M oz 11.7 / 7.6
Average Production – gold (first 5 years / LOM) k oz 58.7 / 71.9
AISC (LOM) – silver equivalent (first 5 years / LOM) $/oz AgEq 11.23 / 12.67
Initial Capital Costs (including contingency) $ M 544
Sustaining Capital Costs $ M 77
Pre-Tax NPV5% $ M 1,114
After-Tax NPV5% $ M 747
Next Steps – Definitive Feasibility Study
AbraSilver plans to advance the Project towards the completion of a Definitive Feasibility Study (“DFS”),
which is expected to be finalized in H1/2026. The DFS will build upon the PFS by assessing all of the
opportunities identified, will incorporate all the exploration results from the ongoing Phase IV, 20,000-
metre drill program and provide a more detailed and comprehensive evaluation of the Project’s
economics, engineering and environmental aspects.
The DFS will be led by a team of experienced engineers and consultants, with support from the
Company’s technical team. It will be competitively tendered to qualifying Engineering, Procurement,
Construction and Management firms and is expected to be awarded by no later than Q2 2025. The
Company will provide regular updates on the progress of the DFS and looks forward to sharing the
results, which are expected to further demonstrate the Company’s potential to become a significant low-
cost silver-gold producer.
Mineral Reserve Estimate – Effective as of March 7, 2024
Table 6 shows the Proven and Probable Mineral Reserves at Diablillos by deposit. The Mineral Reserves
were estimated in March, 2024 using a silver price of $22.50/oz and a gold price of $1,750/oz.
Table 6 – Diablillos Mineral Reserve Estimate
Mineral Reserve
(all domains)
Tonnage
(000 t)
Au
(g/t)
Ag
(g/t)
AgEq
(g/t)
Contained Ag
(koz)
Contained Au
(koz)
Contained AgEq
(koz)
Proven 12,364 0.86 118 185 46,796 341 73,352
Probable 29,930 0.80 80 142 76,684 766 136,267
Total Proven and
Probable 42,294 0.81 91 154 123,480 1,107 209,619
Notes for Mineral Reserve Estimate:
1. Mineral reserves have an effective date of March 7, 2024. Please refer to the Prior PFS.
2. The Qualified Person for the Mineral Reserve Estimate is Mr. Miguel Fuentealba, P.Eng.
3. The mineral reserves were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), Definition Standards for Mineral
Resources and Reserves, as prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
4. The mineral reserves were based on a pit design which in turn aligned with an ultimate pit shell selected from a WhittleTM pit optimization
exercise. Key inputs for that process are:
• Metal prices of U$S 1,750/oz Au; U$S 22.50/oz Ag
• Variable Mining cost by bench and material type. Average costs are U$S 1.94/t for all lithologies except for “cover” Cover mining cost
of U$U 1.73/t, respectively.
• Processing costs for all zone, U$S 22.97/t.
• Infrastructure and G&A cost of U$S 3.32/t.
• Pit average slope angles varying from 37° to 60°
• The average recovery is estimated to be 82.6% for silver and 86.5% for gold.
5. The Mineral Reserve Estimate has been categorized in accordance with the CIM Definition Standards (CIM, 2014).
6. A Net Value per block (“NVB”) cut-off was used to constrain the Mineral Reserve with the reserve pitshell. The NVB was based on "Benefits =
Revenue-Cost" being positive, where, Revenue = [(Au Selling Price (US$/oz) - Au Selling Cost (US$/oz)) x (Au grade (g/t)/31.1035)) x Au Recovery
(%)] + [(Ag Selling Price (US$/oz) - Ag Selling Cost (US$/oz)) x (Ag grade (g/t)/31.1035)) x Ag Recovery (%)] and Cost = Mining Cost (US$/t) +
Process Cost (US$/t) + Transport Cost (US$/t) + G&A Cost (US$/t) + [Royalty Cost (%) x Revenue]. The NVB method resulted in an average
equivalent cut-off grade of approximately 46g/t AgEq.
7. In-situ bulk density was read from the block model, assigned previously to each model domain during the process of mineral resource
estimation, according to samples averages of each lithology domain, separated by alteration zones and subset by oxidation.
8. All tonnages reported are dry metric tonnes and ounces of contained gold are troy ounces.
9. Mining recovery and dilution factors have not been applied to the Mineral Resource estimates.
Technical Disclosure and Qualified Persons
The PFS supersedes the prior study reported in “Amended and Restated NI 43-101 Technical Report,
Pre-Feasibility Study for the Diablillos Ag-Au Project” filed on SEDAR+ by AbraSilver on May 29, 2024.
A Technical Report in respect of the PFS (the “Technical Report”) will be completed in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and will be filed
and available on the Company’s profile on SEDAR+ within 45 days of this news release. The Technical
Report will be authored and certified by the Qualified Persons listed in Table 7.
Jeremy Weyland, P.Eng., Senior Vice President, Projects and Development, is a Qualified Person as
defined by NI 43-101 and has reviewed and approved the scientific and technical information in this news
release.
Table 7 – NI 43-101 Technical Report Summary
Qualified Person(s) Company
Luis Rodrigo Peralta, FAusIMM CP (Geo) INSA Consultora
Joseph M. Keane, P.Eng. (Met) Consultant to SGS North America Inc.
Miguel Fuentealba, MAusIMM P. Eng. Bmining Chile
William Van Breugel, P. Eng. SGS Geological Services
Shaida Miranda, MAusIMM CP (Mining) Mining Plus Peru S.A.C.
About AbraSilver
AbraSilver is an advanced-stage exploration company focused on rapidly advancing its 100%-owned Diablillos
silver-gold project in the mining-friendly Salta and Catamarca provinces of Argentina. The current Proven and
Probable Mineral Reserve estimate for Diablillos, consists of 42.3 Mt grading 91 g/t Ag and 0.81 g/t Au, containing
approximately 123.5 Moz silver and 1.1 Moz gold, with significant further exploration upside potential. In addition,
the Company has entered into an earn-in option and joint venture agreement with Teck on the La Coipita project,
located in the San Juan province of Argentina. AbraSilver is listed on the TSX-V under the symbol “ABRA” and in
the U.S. on the OTCQX under the symbol “ABBRF.”
For further information please visit the AbraSilver website at www.abrasilver.com, our LinkedIn page at AbraSilver
Resource Corp., and follow us on Twitter at www.twitter.com/abrasilver
Alternatively, please contact:
John Miniotis, President and CEO
Tel: +1 416-306-8334
Non-IFRS Financial Measures
This news release contains certain non-IFRS measures, including AISC. AISC includes operating costs,
royalties, sustaining capital, closure costs, and corporate G&A and is calculated based on guidance
provided by the World Gold Council (“WGC”). WGC is not a regulatory industry organization and does
not have the authority to develop accounting standards for disclosure requirements. The Company
believes that these measures, together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying performance of the Company and the results
of the PFS. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and
therefore they may not be comparable to similar measures employed by other companies. The data is
intended to provide additional information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
Forward-Looking Statements
This news release contains “forward-looking statements” and/or “forward-looking information”
(collectively, “forward-looking statements”) within the meaning of applicable securities legislation. All
statements, other than statements of historical fact, are forward-looking statements. Generally, forward-
looking statements can be identified by the use of forward-looking terminology such as “plans”, “expect”,
“is expected”, “in order to”, “is focused on” (a future event), “estimates”, “intends”, “anticipates”, “believes”
or variations of such words and phrases or statements that certain actions, events or results “may”,
“could”, “would”, or the negative connotation thereof. In particular, statements regarding the Company’s
future operations, future exploration and development activities or other development plans constitute
forward-looking statements. By their nature, statements referring to mineral reserves or mineral