Blackrock Silver Announces Positive Preliminary Economic Assessment for Its Tonopah West Project in Nevada; 8.6 Million Annual Production at AISC $11.96 AgEq Per Ounce; After-Tax IRR 39% After-tax NPV (5%) $326-million on an initial capex of $178-
Blackrock Silver Announces Positive
Preliminary Economic Assessment for Its
Tonopah West Project in Nevada; 8.6 Million
Annual Production at AISC $11.96 AgEq Per
Ounce; After-Tax IRR 39%
After-tax NPV (5%) $326-million on an initial capex of $178-
million with an after-tax IRR of 39% producing at $11.96 AISC
over 7.8 year mine life at head grade of 570 g/t AgEq
Vancouver, British Columbia--(Newsfile Corp. - September 4, 2024) -
Blackrock Silver Corp. (TSXV:
BRC) (OTCQX: BKRRF) (FSE: AHZ0)
("
Blackrock
" or the "
Company
") is pleased to announce the
results of a Preliminary Economic Assessment ("
PEA
") for its 100%-owned Tonopah West Project
("
Tonopah West
" or the "
Project
"), in one of the largest historic silver districts in North America,
located on private land in Nye and Esmeralda counties, Nevada, United States, approximately 1
kilometre (km) northwest of Tonopah.
The PEA was prepared by Minetech, LLC ("
Minetech
") in accordance with Canadian Institute of Mining,
Metallurgy and Petroleum ("
CIM
") Definition Standards - For Mineral Resources and Mineral Reserves
adopted May 19, 2014 (the "
CIM Definition Standards
") and in accordance with National Instrument
43-101 -
Standards of Disclosure for Mineral Projects
("
NI 43-101
") with an effective date of
September 4, 2024.
Highlights of the Tonopah West PEA
(All amounts are in United States Dollars unless otherwise indicated)
At the base case gold price of $1,900 per ounce and silver price of $23 per ounce, the Project
commands an after-tax net present value discounted at 5% ("
NPV
5%
") of $326-million on a low
initial capex of $178-million (including $22-million contingency) with a payback of 2.3 years and an
after-tax internal rate of return ("
IRR
") of 39.2%
At a gold price of $2,280 per ounce and a silver price of $27.60 per ounce (base case +20%), the
economic profile of the Project escalates to an after-tax NPV
5%
of $495-million and an after-tax
IRR of 54.0%.
All-in Sustaining Costs ("
AISC
")
1
of $11.96 per silver equivalent ounce basis.
Over the approximately 8-year life of mine ("
LOM
"), production from the mining and processing of
approximately 4.1 million diluted tonnes of material containing 75.4 million silver equivalent
("
AgEq
") ounces (silver/gold ratio of 90/1) which equates to 66.8 payable AgEq ounces. The mine
is expected to deliver 424,000 payable gold ounces and approximately 31.8 million payable silver
ounces generating $496-million after-tax LOM cash flow.
Tonopah West is situated on patented mineral claims (private land) and benefits from a stream-
lined permitting process with only State and County regulators involved.
The PEA is based on an updated Mineral Resource Estimate ("
MRE
") with an effective date of
August 23, 2024, comprising 6.35 million tonnes grading 2.82 grams per tonne ("
g/t
") gold ("
Au
")
and 237.8 g/t silver ("
Ag
") totaling 577,000 ounces of gold and 48.5 million ounces of silver. At a
AgEq grade of 492.5 g/t AgEq, the Inferred Resources in the updated MRE represent a total of
100.56 million AgEq ounces.
Recoveries of 96.1% for gold and 88.9% for silver from a 3-stage crushing circuit and processing
plant.
Significant expansion potential: PEA excludes NW step out deposit (12 million AgEq ounces) from
the mine plan. 3 drills are at site on a 20,000 metre resource expansion and conversion program
aimed at de-risking an initial 3 years of production and bridging a one kilometre mineralized strike
potential to NW step-out zone that could bring additional ounces online.
The Project incorporates local contract mining and is expected to stimulate the local economy,
benefitting the municipality of Tonopah and surrounding communities through direct and indirect
employment at the Project, local sourcing of services and supplies and community programs
funded by the Company.
Andrew Pollard, President & CEO of the Company, commented: "Four years on from our initial
discovery at Tonopah West, completion of this PEA is an important achievement for Blackrock as it
outlines the potential for it to be a key driver of domestic growth, increasing America's annual silver
production by over 12%
2
, while doing so at some of the lowest AISC in the world
3
at $11.96 per silver
equivalent ounce.
With a lot more drilling in front of us, our Project already demonstrates a highly positive
economic profile with an estimated after-tax NPV
5%
of $326 million, an after-tax IRR of 39% and a
payback period of 2.3 years on a low initial capex of $178-million at a base case of $23 per ounce of
silver and $1,900 per ounce of gold.
At higher metals prices, the Project exhibits an estimated after-tax
NPV
5%
of $495 million and an after-tax IRR of 54% at a price of $27.60 per ounces of silver and $2,280
per ounce of gold (base case +20%). The PEA outlines substantial silver-gold production of 66.8 million
silver equivalent ounces over an initial 7.8-year mine life, averaging 8.6 million silver equivalent ounces
annually (averaging 4.1 million ounces of silver and 54.6 thousand ounces of gold) providing for
exceptional free cash flow. This PEA represents just this moment in time, with near-mine expansion
potential identified to our NW step out deposit (12 million AgEq ounces) that was omitted from this mine
plan, and with a 20,000 metre drill program currently underway, the Company aims to link up that
mineralization while de-risking our ounces for the early years of the operation. Situated entirely on
patented mineral claims adjacent to the town of Tonopah, Nevada, right along US highway 95, Tonopah
West benefits from existing infrastructure and a stream-lined permitting process, of which findings from
this PEA will be used as a roadmap to kickstart."
A technical report prepared in accordance with NI 43-101 on the Project which includes the PEA and the
updated MRE will be filed with the applicable Canadian securities regulators within 45 days of this news
release. The technical report will be available under the Company's profile on SEDAR+
(
www.sedarplus.ca
) and on the Company's website (
www.blackrocksilver.com
). The results of the PEA
are preliminary in nature and include inferred mineral resources that are considered too speculative
geologically to have economic considerations applied to them to be classified as mineral reserves.
There is no certainty that the results of the PEA will be realized. Mineral resources that are not mineral
reserves do not have demonstrated economic viability.
Table 1: Key Economic Parameters of the PEA
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Capital Costs
The estimated capital costs to bring Tonopah West into operation are based on utilizing local and
regional personnel and select contractors. Initially, an underground development contractor will be
employed to establish the portal and initiate development.
As the mine develops, the Company will
transition to owner mining.
Contractors will be sourced to construct all surface facilities including the
process plant.
After an initial ramp up period, mineralized material will be processed at a rate of
547,500 tonnes per year in a conventional three-stage crushing and milling plant including a refinery
which will produce saleable gold and silver doré bars.
The initial capital expenditure is estimated at $177.8 million for the construction period which includes
$22.3 million in contingency costs. An additional $178 million is estimated for sustaining capital,
principally associated with underground mining development, additional underground mobile equipment
and infrastructure, delineation drilling and accrued reclamation expense over the LOM. The Company
has also included $11.7 million of expenditures for exploration access ramps to extend the current
mineralization.
Capital cost estimates are based on industry standards and were developed using quotes and
estimates provided by mining contractors and vendors.
Table 2: Capital Costs
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Operating Costs
The minable resource is accessed via a newly developed ramp system incorporating existing vertical
shafts (rehabilitated) for ventilation and secondary escapeways.
The minable resource will be extracted
utilizing two mining methods, Sublevel Extraction and Cut and Fill mining techniques.
Cemented Rock
Fill (CRF) and Hydraulic Fill are intended to be utilized as backfill.
CRF media is sourced from the
development waste rock, whereas Hydraulic Fill will be obtained from segregated tailings material.
The
minable resource will be transferred to surface via underground haul trucks.
The study considers a processing plant with a design capacity to treat 1,500 metric tonnes per day.
Extraction of gold and silver will be carried out by agitated cyanide leaching to produce a pregnant leach
solution.
The precious metal pregnant leach solution is separated from the solid material in counter-
current decantation thickeners.
Process tailings will be dewatered by pressure filtration.
Solid tailings
waste material from pressure filtration will be transported by dump truck to a lined dry-stack tailings
storage area.
For this evaluation, 20% of the tails were assumed to be used for backfill in the
underground mine.
Precious metal values will be recovered from the pregnant solution by Merrill-Crowe
zinc precipitation, followed by precipitate smelting.
Precipitate smelting will produce gold and silver doré
bars.
Table 3: Operating Costs
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A summary of the key operating and financial metrics over the approximately 8-year LOM of the Project
according to the PEA is as follows:
Table 4: LOM Operating and Financial Data
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Table 5: Sensitivity to Metal Price, Opex and Capex Variations
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Mineral Resources
The updated MRE was prepared in accordance with the CIM Definition Standards and NI 43-101. The
effective date of the updated MRE prepared by RESPEC is August 23, 2024.
Table 6: Tonopah West Inferred Mineral Resource - Effective date August 23, 2024
Cut-off
Grade (AgEq g/t)
(1)
Tonnes
(kt)
Grade
Contained Metal
Classification
(4)
Au (g/t)
Ag (g/t)
AuEq
(g/t)
(2)
Au
(koz)
Ag (koz)
AuEq
(koz)
(3)
190
6,351
2.82
237.8
492.5
577
48,550
100,560
Inferred
1
AgEq cutoff grade is based on total mining, processing and G&A costs of $128.6/tonne and a silver price of $25/ounce.
2 Silver Equivalent grade ratio used is 90:1 based on silver and gold prices of $23/ounce and $1,900/ounce, respectively, and
recoveries for silver and gold of 87% and 95%, respectively.
AgEq Factor= (Ag Price / Au Price) x (Ag Rec / Au Rec); g AgEq/t = g Ag/t
+ (g Au/t / AgEq Factor).
3
Rounding as required by reporting guidelines may result in apparent discrepancies between tonnes, grade, and contained metal
content.
4
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or
any part of the mineral resources estimated will be converted into mineral reserves.
The quantity and grade of reported inferred
mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred
mineral resources as indicated mineral resources.
It is uncertain if further exploration will result in upgrading them to the
Indicated mineral resources category.
The MRE encompasses the spatial areas known as Victor, DP, Bermuda and the Northwest Step Out
areas.
The Victor area is approximately 500-metres by 250-metres while the DPB area is 800-metres
by 800-metres. The Bermuda area is a high-grade vein within the DPB area, and the NW step out
represents a new extension of the vein zones to west-northwest. The spatial areas are not considered to
be significantly different geologically but have been separated for logistical purposes in future mining
scenarios. Table 7 presents the mineral resources subdivided by spatial area.
Table 7: Tonopah West Inferred Mineral Resources by Area
Area
AgEq cutoff
g/t
(1)
Tonnes
Silver g/t
Gold g/t
AgEq
g/t
(2)
Ounces of Silver
Ounces of Gold
Ounces of
Silver
Equivalent
(3)
Classification
(4)
Victor
190
2,255,000
258
3.05
532.8
18,698,000
221,000
38,621,000
Inferred
DP
190
1,652,000
191.5
2.57
423
10,167,000
136,000
22,462,000
Inferred
Bermuda
190
1,409,000
292
3.44
602.7
13,233,000
156,000
27,310,000
Inferred
NW Step Out
190
1,035,000
193.8
1.9
365.5
6,452,000
63,000
12,168,000
Inferred
TOTAL
6,351,000
237.8
2.82
492.5
48,550,000
577,000
100,560,000
Inferred
1
AgEq cutoff grade is based on total mining, processing and G&A costs of $129.3/tonne and a silver price of $25/ounce.
2
Silver Equivalent grade ratio is 90:1 is based on silver and gold prices of $23/ounce and $1,900/ounce, respectively, and
recoveries for silver and gold of 87% and 95%, respectively.
AgEq Factor= (Ag Price / Au Price) x (Ag Rec / Au Rec); g AgEq/t = g Ag/t
+ (g Au/t / AgEq Factor).
3
Rounding as required by reporting guidelines may result in apparent discrepancies between tonnes, grade, and contained metal
content.
4
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or
any part of the mineral resources estimated will be converted into mineral reserves.
The quantity and grade of reported Inferred
mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred
mineral resources as Indicated mineral resources.
It is uncertain if further exploration will result in upgrading them to the
Indicated mineral resources category.
The NW step out area contains resources of over 12 million ounces of AgEq which are excluded from
the PEA. There is significant exploration potential to expand this zone such that it could become big
enough to be included in future mining studies.
To generate the MRE, RESPEC was supplied with three-dimensional vein shapes by Blackrock. These
vein shapes were used as geological controls to construct three-dimensional grade domains to
constrain the estimate. Silver and gold mineral resources were modelled and estimated as follows:
evaluate the drill data statistically;
create tightly constrained low-, medium- and high-grade mineral-domain polygons for both silver
and gold on sets of cross sections spaced at 50-metre intervals;
use the mineral-domain polygons as a basis to create three-dimensional wireframes;
code a block model to the silver and gold domains using the mineral-domain wireframes;
analyze the modelled mineralization geostatistically to aid in the establishment of estimation and
classification parameters; and
interpolate grades into models comprised of 1.5(east-west) x 1.5(north-south) x 1.5(vertical)-metre
blocks using the silver and gold mineral domains to explicitly constrain the grade estimations.
Drillhole assay samples were composited within the mineralized domains into 1.5-metre length
composites. High-grade capping was completed on composite data and established using a statistical
analysis for silver and gold.
Silver was capped at 1,800 g/t, and gold was capped at 20 g/t.
Specific gravity test work was completed for 92 core samples.
Results indicate an average density of
2.49 grams/cm for vein material and 2.36 grams/cm for wall rock.
RESPEC utilized Inverse Distance Cubed (ID) interpolation for the estimation to obtain a localizing effect
in the mid- and high-grade domains, and an Inverse Distance Squared (ID) in the low-grade domains
where mineralization is more diffuse.
All estimates are based on a block dimension of 1.5-metre by 1.5-
metre by 1.5-metre blocks.
The original deposit has been depleted by historical mining in the Victor area.
Approximately 200,000
tonnes of material were removed from the Victor resource estimate.
In the DPB area, no historical
mining records were documented.
A cut off for the reported resource of 190 g/t AgEq was selected based an assumed mining costs for
underground methods along with processing and G&A costs. At a 190 g/t AgEq cut off, the average
grade of the inferred resource is 492.5 g/t AgEq.
The MRE was prepared under the supervision of Mr. Jeffrey Bickel, CPG, an employee of RESPEC,
and he has reviewed and approved the technical contents relating to the MRE in this news release.
Mr. Bickel has reviewed the sampling, assaying, and security procedures used at Tonopah West and it
is his opinion that they follow industry standard procedures and are adequate for the estimation of the
current MRE.
Mr. Bickel completed audits of the database, performed a site visit, and reviewed quality assurance and
quality control data.
After performing their review, he considers the assay data to be adequate for the
estimation of the current MRE.
Qualified Persons
The "Qualified Persons" (as defined by NI 43-101) who were responsible for the PEA and who have
verified and approved the contents of this news release are Robert H. Todd, P.E., of Minetech, Jeffery
Bickel, C.P.G (AIPG) of RESPEC Company, LLC, Travis Manning, P.E., QP of Kappes, Cassiday &
Associates, Thomas H. Bagan, P.E., MBA, SME-RM, an independent consulting mining engineer and
Richard DeLong, QP of Westland Engineering and Environmental Inc.
Blackrock's exploration activities at Tonopah West are conducted and supervised by Mr. William
Howald, Executive Chairman of Blackrock. Mr. William Howald, AIPG Certified Professional Geologist
#11041, is a Qualified Person as defined under NI 43-101 standards. He has reviewed and approved
the contents of this news release.
The Qualified Persons referenced in this news release are not aware of any environmental, permitting,
legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially
affect the PEA.
About Blackrock Silver Corp.
Backed by gold and silver ounces in the ground, Blackrock is a junior precious metal focused exploration
and development company driven to add shareholder value. Anchored by a seasoned Board of
Directors, the Company is focused on its 100% controlled Nevada portfolio of properties consisting of
low-sulphidation, epithermal gold and silver mineralization located along the established Northern
Nevada Rift in north-central Nevada and the Walker Lane trend in western Nevada.
Additional information on Blackrock Silver Corp. can be found on its website at
www.blackrocksilver.com
and by reviewing its profile on SEDAR at
www.sedarplus.ca
.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements and Information
This news release contains "forward-looking statements" and "forward-looking information" (collectively,
"
forward-looking statements
") within the meaning of Canadian and United States securities
legislation, including the United States Private Securities Litigation Reform Act of 1995. All statements,
other than statements of historical fact, are forward-looking statements. Forward-Looking statements in
this news release relate to, among other things: the Company's strategic plans; the results of the PEA;