Tinka Reports Updated PEA and Mineral Resource Estimate FOR the Ayawilca Polymetallic Zinc‐tin‐silver Deposit
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February 28, 2024
TINKA REPORTS UPDATED PEA AND MINERAL RESOURCE ESTIMATE FOR THE AYAWILCA POLYMETALLIC
ZINC‐TIN‐SILVER DEPOSIT
Vancouver, Canada – Tinka Resources Limited ( “Tinka” o r t h e “Company”) (T S X V & B V L : T K) (OTCQB: TKRFF) is
pleased to announce the results from an updated Preliminary Economic Assessment (“PEA”) on the Company’s 100%‐
owned polymetallic Ayawilca project (“Ayawilca” or the “Project” ) in central Peru. The updated PEA shows Ayawilca
to be an excellent base metals project with significant enhance ments from the previous PEA study. The Project now
features a smaller, more efficient zinc‐silver‐lead plant, introduces a separate tin plant for additional revenue and
commodity diversification and highlights the development path forward for Ayawilca to become a producing mine.
PEA Highlights:
Robust economics: After‐tax Net Present Value (“ NPV”) at 8% discount of US$434 million (pre‐tax NPV8% of
US$732 million) and after‐tax Internal Rate of Return (“IRR”) of 25.9% (pre‐tax IRR of 34.8%).
Payback period after‐tax of 2.9 years (pre‐tax of 2.4 years).
Initial Capital Expenditure (“Capex”) of US$382 million.
Long 21‐year life of mine (“ LOM”) for a 2.0 million tonnes per annum (Mtpa) zinc‐silver‐lead o peration with
15‐years of tin production at 0.3 Mtpa.
Average C1 cash cost of US$0.55/pound zinc and all in sustaining cost (“AISC”) of US$0.68/ pound zinc.
Average annual metal production (in concentrate) of 200 million pounds of zinc (90,000 tonnes Zn), 3.26 million
pounds of tin (1,500 tonnes Sn), 560,000 ounces of silver and 5.7 million pounds of lead (2,590 tonnes Pb).
Zinc Zone Indicated Mineral Resource tonnage increased 49% from the previous Mineral Resource estimate.
Tin Zone Indicated Mineral Resource declared for the first time.
Excellent location in a world‐class mining jurisdiction, close to a zinc smelter and port.
Compact mine footprint and planned use of filtered tailings technology provides the lowest risk and most
water‐efficient solution for tailings storage while 40% of tailings to be stored underground as backfill.
Dr. Graham Carman, Tinka’s President and CEO, stated:
“We are very pleased to release the results of the updated 2024 PEA for the Ayawilca project. We believe the results of
the PEA show Ayawilca to be an outstanding polymetallic project with several improvements from the previous study.
While zinc continues to be the primary revenue source, Ayawilca's polymetallic nature includes important contributions
from tin and silver providing valuable commodity diversificatio n. The updated PEA is marked by the incorporation of a
smaller, more efficient, zinc‐silver‐lead plant and a separate tin plant and a more compact mine footprint. Despite an
increase in the initial capex, due to efficiencies in the mine design there was no significant impact on valuation. The
strong financial metrics include an after‐tax NPV8% of US$434 million, an after‐tax IRR of 25.9%, and a post‐tax payback
period of only 2.9 years which highlight the potential for Ayawilca to become a producing mine.”
“A revised Mineral Resource estimation has significantly improv ed the level of confidence in the resource as a result of
an additional 11,000 metres of drilling completed in 2023. The Zinc Zone Indicated Mineral Resource tonnage has
increased 49% over the previous estimate while zinc content has increased by 22% and silver content by 45%. The Tin
Inferred Mineral Resource has increased in tonnage and metal content by 51% and 13%, respectively, while a Tin
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TSXV & BVL: TK OTCQB: TKRFF NEWS RELEASE
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Indicated Mineral Resource is declared for the first time. The Company has chosen to adopt the highest standard for
reporting underground mine resources to satisfy the “Reasonable Prospects for Eventual Economic Extraction (RPEEE)”
as required by CIM (2014) in the demonstration of spatial continuity of mineralization within potentially mineable
shapes (i.e., stopes). With the market increasingly moving towards RPEEE resource reporting for underground deposits,
we are adopting this method of resource reporting for the first time.”
“ T h e u s e o f f i l t e r e d t a i l i n g s i s t h e l o w e s t r i s k a n d m o s t w a t e r‐efficient solution for tailings storage at surface, and
highlights our commitment to minimize environmental risks. The storage of a substantial quantity of tailings as backfill
underground also reduces surface tailings storage, again helping to minimize the environmental impact.”
”There remains significant exploration potential for further di scoveries at Ayawilca, and several of the resource bodies
remain open at depth, with a potential feeder system remaining largely untested by drilling particularly at the Tin Zone.”
T h e r e s u l t s o f t h e P E A u p d a t e w i l l b e d i s c l o s e d i n a n i n d e p e n d ent technical report in accordance with National
Instrument 43‐101 Standards of Disclosure for Mineral Projects (“NI 43‐101”) and prepared by independent consulting
firm SRK Consulting (UK) (“ SRK”) with specific subject matter expertise including Transmin Me tallurgical consultants
(“Transmin”), Envis Peru S.A.C. (“Envis”) tailings consultants and MineFill Services (“MineFill”) backfill consultants. SLR
Consulting (Canada) Ltd (“SLR”) has prepared the updated Mineral Resource estimate for the P EA update. A National
Instrument 43‐101 Technical Report (“the Technical Report”) will be filed on SEDAR within 45 days.
Note: The PEA is preliminary in n ature and includes Inferred Mi neral Resources that are c onsidered too speculative
geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral
Reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral Resources are
not Mineral Reserves and do not have demonstrated economic viability.
A summary of the key financial information for the updated PEA is provided in Table 1.
Table 1. PEA Summary
Financial Summary – Base Case Pre‐tax After‐tax
NPV (8% discount rate)
IRR
Payback period
US$731.7 million
34.8%
2.4 years
US$433.5 million
25.9%
2.9 years
Pre‐production capital expenditure (Capex)1
Sustaining Capex
Life of Mine (LOM) Capex
C1 Cash Cost / Pound of Payable Zinc
All‐in Sustaining Cost (AISC) / Pound of Payable Zinc
Closure Cost
US$382 million
US$313 million
US$695 million
US$0.55
US$0.68
US$20 million
Notes: 1 Includes contingencies of US$76 million.
A summary of the Life of Mine (LOM) operating summary for the updated PEA is provided in Table 2. The after‐tax cash
flow by year of production is presented in Figure 1.
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Table 2. LOM Operating Summary for the updated PEA with Metal Prices assumptions
Operating Summary Value
Operating days per year
Processing plant throughput Zn/Ag/Pb
Processing plant throughput Sn
Average annual zinc concentrate production
Average annual tin concentrate production
Average annual lead‐silver concentrate production
Average annual silver in lead concentrate
Total LOM zinc in concentrate
Net Smelter Return from zinc and lead concentrates
Net Smelter Return from tin concentrate
360 days/year
2.0 Mtpa
0.3 Mtpa
180,000 dmt/year
3,000 dmt/year
5,500 dmt/year
0.56 million oz/year
1.9 million tonnes
US$4,000 million
US$460 million
Mining costs (including backfill)
Processing costs Zn/Ag/Pb
Processing costs Sn
Tailings
G&A costs
LOM Average Operating Cost (Zn/Ag/Pb)
LOM Average Operating Cost (Sn)
US$16.88/t
US$11.00/t
US$23.63/t
US$0.94/t
US$6.23/t
US$35.06/t
US$47.68/t
Notes: dmt = dry metric tonne.
Numbers may not add due to rounding.
Base Case Metal Prices & Exchange Rate Assumptions Value
Zinc Price
Lead Price
Silver Price
Tin Price
NSR Cut‐off value ‐ Zinc Zone and Silver Zone
NSR Cut‐off value – Tin Zone
Exchange Rate ‐ Peruvian SOL/USD
US$1.30/lb
US$1.00/lb
US$22/oz
US$11.00/lb
US$60/t
US$80/t
3.70
Total LOM tonnage processed 45.55 million tonnes
Mine Life Zn/Ag/Pb
Mine Life Sn
21 years
15 years
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Figure 1. Ayawilca 2024 PEA – After‐Tax Cash Flow by Year of Production (in US$)
Mining
The Ayawilca Project is planned as an underground mine operation. For the purposes of the PEA, the Zinc Zone
(together with the Silver Zone) will be mined at a rate of 2.0 Mtpa, whilst the Tin Zone will be mined at a rate of 0.3
Mtpa. Mining of both zinc and tin zones commence together with each feeding separate processing plants. The LOM
is 21 years for the Zinc Zone and 15 years for the Tin Zone. Mining in the Zinc and Tin Zones will utilize a long hole open
stoping (“LHOS”) method in a transverse direction with level sp acing ranging from 15 to 20 m. The Silver Zone uses
LHOS in a longitudinal direction at a 20 m level spacing. A top‐down overhand mining sequence is applied, working on
top of paste‐fill between sill pillars which are recovered. Three declines are planned from surface, initially two declines
to access the South, Silver, and West areas and in later years the Central and East areas will be accessed by a third
decline. The Tin Zones are also accessed through these planned declines.
Production is assumed to commenc e following 18 months of constr uction and commissioning. The mine plan for the
Zinc and Silver Zones is based on mining a total of 41.2 million tonnes grading 5.02% Zn, 17.3 g/t silver and 0.19% lead
over a 21‐year LOM using an NSR cut‐off of US$60/t. The Tin Zo ne is based on mining a total of 4.32 million tonnes
grading 0.92% tin over a 15‐year LOM using an NSR cut‐off of US $80. The mill feed will be trucked to the surface via
multiple ramp systems connecting the three mine portals to the underground infrastructure and accessing production
areas starting at the South and West areas of the Zinc Zone, the Silver Zone, and the high recovery area of the Tin Zone
(see Figures 2 and 3).
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Figure 2. Mining Schedule for Zinc‐Silver‐Lead Plant (left) and Tin Plant (right) showing Average Grades by Year
Figure 3. Oblique view of Ayawilca mine design and stopes showing LOM Schedule
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Metallurgy and Processing
Processing of the zinc‐rich mineralization will be through a conventional crushing and grinding circuit followed by froth
flotation, concentrate thickening and filtration. Metallurgica l test work indicates a zinc concentrate grading 50% zinc
can be produced from Zinc and Silver Zones with 92% of the zinc in the Zinc Zone recovered to the zinc concentrate
(see news release of June 5, 2019), and 87% of the zinc in the Silver Zone recovered to the zinc concentrate. The lead
concentrate is expected to contain 47% lead and average 3,140 g/ t s i l v e r o v e r t h e L O M . B a s e d o n p r e l i m i n a r y
metallurgical test work, 45% of the silver in the Zinc Zone is expected to report to the lead concentrate and be payable,
while 40% of the silver is expected to report to the zinc concentrate and not be payable. In the Silver Zone, 85% of the
silver (and 85% of the lead) is expected to report as a credit to a commercial lead concentrate. The zinc concentrate is
expected to be a marketable concentrate with no deleterious elements other than an iron penalty. Concentrate grade
assumptions and recoveries for the principal metals in the Zinc and Silver Zones are summarized in Table 3 below.
Table 3. LOM Head Grades and Metallurgical Recoveries for the Zinc‐Silver‐Lead Circuit
Product Zinc/Silver‐Lead Concentrates Average Grade LOM Metallurgical R ecoveries (%)1
Zinc (%) Lead (%) Silver (g/t) Av. NSR (US$/t) Zinc Lead Silver
Feed grade
Zinc Concentrate
Lead Concentrate
5.02
50.0
4.0
0.19
0 to 0.1
47
17.3
0‐100
3,1402
99 92/87
0
0
70/85
40/0
45/85
1 First number relates to recovery in Zinc Zone and second number to Silver Zone
2 Silver concentrate grades were calculated for the PEA and range from 897 to 5,849 g/t
The first 200,000 wmt/a of zinc concentrates are assumed to be delivered directly to a local refinery (around 90% of
LOM production); the balance is assumed to be sold to refinerie s in east Asia. The zinc concentrate also contains high
indium (around 650 ppm In) and receives a US$20/dmt credit in conc e nt r at e sh i p p e d t o Asi a. A l l of th e si l ve r ‐ l e ad
concentrates are assumed to be sold overseas. Off‐site charges include transport costs, treatment charges, refining
charges, and iron penalties at refinery are summarized below in Table 4.
Table 4. LOM Head Grade and Metallurgical Recovery for the Tin Circuit
Product Average Grade LOM Metallurgical Recoveries (%)
Tin (%) Av. NSR (US$/t) Tin – Coarse Tin – Fine
Feed grade
Tin Concentrate
0.92
50.0
106 90 50
Initial metallurgical testwork indicates that a tin concentrate grading 50% with 90% recovery can be produced from the
high recovery (i.e., coarse tin) part of the Tin Zone, and a tin concentrate grading 50% with 50% recovery can be
produced from the lower recovery (i.e., fine tin) part of the T in Zone. The coarse tin represents 19% of the overall tin
feed. The tin concentrates are anticipated to have markets in Asia and therefore all of the tin concentrate produced is
assumed to be shipped overseas. Off‐site charges include transport, treatment charges, refining charges, and penalties
at refinery and summarized below in Table 5.
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Table 5. Off‐Site Charges
Description Zinc Concentrate Silver‐Lead
Concentrate
Tin Concentrate
Transport to Port/Local refinery
Port Charges
Shipping to overseas smelter (FOB)
Local refinery Treatment Charge (TC)
Overseas Treatment Charge (TC)
Ag Refining Charge (RC)
Indium Credit (Overseas only)
Sulphur Penalty
Iron Penalty
US$40/wmt
US$25/wmt
US$45/wmt
US$220/dmt
US$220/dmt
‐
US$20.00/dmt
US$7.50/dmt
US$40/wmt
US$50/wmt
US$15/wmt
‐
US$50/dmt
US$0.80/oz
‐
US$40/wmt
US$50/wmt
US$15/wmt
‐
US$750/dmt
‐
‐
US$75/dmt
0.7 units
Notes: wmt = wet metric tonne. dmt = dry metric tonne
For silver‐lead concentrates grading less than 2,500 g/t Ag, treatment charge is $150/dmt and refining charge is $1.00/oz Ag.
Approximately 60% of the tailings will be thickened and filtered for dry stack tailings disposal. The remaining 40% will
be prepared as pastefill and reticulated to the underground mine to be used as structural backfill.
Infrastructure
Access
There is a good existing road network from the Project to the c oast of Peru. The Project lies approximately 250 km
from the Port of Callao and a zinc refinery. The road leaving the Project is an all‐weather gravel road that crosses the
high central Andes for about 60 km before joining a bitumen roa d to the coast and then to the Port of Callao via the
Pan‐American highway. The Cajamarquilla zinc refinery is situa ted on the eastern outskirts of the city of Lima with
good access from the highway.
Tailings and Mine Waste Management
The tailings and mine waste concept for the Ayawilca PEA is bas ed on a commitment to implementing best available
practices and best available technologies, as described in the International Council of Mining and Metals (“ICMM”)
Global Industry Standard for Tailings Management. The location of the TSF has been selected to minimize any potential
risks for downstream areas. It is envisaged that:
100% of mine waste rock and 40% of tailings production will be re‐used as underground mine backfill;
On‐surface tailings will be processed as filtered tailings and stacked at a secure and prepared facility. This
method will reduce the environmental footprint and the risk of failure and the attendant environmental
impacts, while also minimizing water consumption.
The filtered tailings facility has been located adjacent to the process plant area, minimi zing the haul distance
for the tailings and reducing environmental and social impacts.
Power
A new electricity substation is currently under construction 4.7 km from Ayawilca by a 3rd party mining company. The
P r o j e c t w i l l i n c l u d e c o n s t r u c t i o n o f a t r a n s m i s s i o n l i n e f r o m this substation to a substation at Ayawilca. Tinka has
recently received approval of a pre‐operation environmental stu dy (“EPO”) to access 220kV / 23 MW power supply
through a substation at Ayawilca. Ayawilca is now planned to become connected to the national electrical grid.
Capital and Operating Costs
The major components of the initial capital expenditure of US$$382 million include US$89.4 million for the zinc‐silver‐
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lead processing plant, US$29.0 million for the tin processing p lant, US$34.0 million for on‐site infrastructure, US$56.6
million for mine equipment and underground pre‐production development, US$17.8 million for site preparation of the
filtered tailings storage facilit y and related mobile equipment , $15.5 million for the pastefill plant, $52.4 million for
other surface facilities, and US$45.0 million other costs including indirects and owners costs. Contingency in the initial
capital totals US$76.2million. T otal sustaining capital is $31 3.1 million over the 21‐year mine life. The major
components of sustaining capital are US$176.3 million for minin g equipment (including major components and
rebuilds) and materials handling, $49.8 million for mine develo pment, ventilation and water management, US$46.0
million for tailings management. Contingency in sustaining capital totals US$40.8 million.
The estimated capital costs, over the life of the Project, are as follows in Table 6.
Table 6. Capital Costs Summary
Capital Cost Item Initial (US$ M) Sustaining (US$ M) LOM Total (US$ M)
Mining & mine development
Process plant – Zn/Ag/Pb
Process plant ‐ Sn
Pastefill plant
Tailings
Other surface facilities
Subtotal
Other indirects
Owner’s costs
Contingency
56.6
89.4
29.0
15.5
17.8
52.4
261.7
34.7
10.3
76.2
226.3
‐
‐
‐
46.0
‐
272.2
‐
‐
40.8
282.9
89.4
29.0
15.5
63.7
52.4
534.0
34.7
10.3
117.0
TOTAL PROJECT (US$ M) 381.8 313.1 694.9
CLOSURE COSTS (US$ M) 19.5
Numbers may not add due to rounding
The estimated operating costs, over the life of the Project, are as follows in Table 7.
Table 7. Operating Costs per Mining Method for the Zinc and Tin Plants
US$/t Processed
Operating Cost Item Zinc Plant Tin Plant Weighted Average
Zinc + Tin
Mining
Backfill
Sub‐total
Processing
Tailings
G&A
13.15
3.73
16.88
11.00
0.94
6.23
13.15
3.73
16.88
23.63
0.94
6.23
13.15
3.72
16.88
12.20
0.94
6.23
TOTAL PROJECT 35.06 47.68 36.25