In November 2017, Sedgman Pty Ltd (A member of the CIMIC Group) in collaboration with New Century Resources, completed a Restart Feasibility Study (RFS). The study included a detailed economic analysis on a large scale tailings reprocessing operation utilising the significant existing infrastructure located on site at the Century Zinc Mine.
The following table summarises the outcomes of the study:
|Technical Parameters||Financial Parameters2|
(dry metric tonnes)1
|507,000tpa zinc concentrate
(264,000tpa zinc metal)
|Base Case Zinc US$1.25/lb||Optimistic Zinc US$1.50/lb|
|77.3Mt at 3.1% ZnEq||IRR
|52% zinc & 187g/t silver||EBITDA
(LOM avg p.a.)
|Design Throughput1||15Mtpa||Total Free
|6.3 years||Start-up Capital
|First Production||Q3 2018||Operating Costs
C1: US$0.38/lb payable4
C3: US$0.50/lb payable5
- Throughput, Design Production and Concentrate Grade represent the average steady state values following initial operational ramp up period (approximately 15 months).
- Long term Base Case exchange rate and commodity pricing assumptions are based on Bloomberg consensus median forecasts from independent analysts for the year 2018. Long term AUD/USD FX 0.75, and long term commodity prices of US$2,755/t zinc, US$17.8/oz silver.
- Start-up Capital Costs represents pre-production capital requirements exclusive of working capital and further ramp up capital
- C1 is defined as direct cash operating costs produced, net of by-product credits, divided by the amount of payable zinc produced. Direct cash operating costs include all mining, processing, transport, treatment and refining costs and smelter recovery deductions through to refined metal.
- C3 cost includes C1 costs, plus depreciation, indirect costs and royalties.
Based on the proposed production profile, New Century estimates Century will again be one of the top 10 zinc operations in the world, with steady state production forecasted at 507,000tpa of zinc concentrate at 52% zinc (264,000tpa zinc metal) over an initial 6.3 year mine life from the Century Tailings Deposit only.
Comparison of the top 10 zinc mines as a percentage of global supply (Source: SNL Metals & Mining – 2016 data excluding Century/New Century Resources & Dugald River/MMG Limited)
The forecast start-up capital estimate is A$50 million (including A$2.8 million contingency) to first production (expected by July 2018) at an initial throughput rate of 8Mpta. Once in production, further ramp up capital of A$63 million will be invested over a 15 month period (for a total capital requirement of A$113 million) to bring the operation into full production at 15Mtpa. Ramp up capital is proposed to be funded from operational cash flow.
Based on the operating cost estimates, New Century has also forecast operations from the Century Tailings Deposit to be the one of the lowest cost primary zinc operations in the world, with Life-of-Mine C1 costs at US$0.38/lb and C3 costs at US$0.50/lb. A comparison of Total Cash Costs against other operations is provided below.
Top primary zinc operations: Total Cash Costs against payable zinc production (source: SNL Metals & Mining 2016 data excluding NCZ figures)
As a key outcome of the RFS, the Company has declared a Proven Ore Reserve of 77.3Mt at 3.1% ZnEq (3.0% zinc and 12g/t silver) for the Century Tailings Deposit. This represents a 98% conversion from the previous Measured Resource (see ASX announcement 12 September 2017).
New Century commenced the construction, refurbishment and re-commissioning phase, with the Company to be fully funded to operations including working capital, through its current cash position (A$50.7M) and conditional debt facility (A$58M).
For full details of the RFS results and details on the reserve, please download the ASX release HERE.