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Optimized Feasibility Study
On January 22, 2007 Yukon Zinc announced the results of the Optimized Feasibility Study (OFS) on the Wolverine Project completed by prime consultant Wardrop Engineering Inc. and the sub-consultants. Wardrop was engaged to prepare the study in accordance with the Standards of Disclosure for Mineral Projects as defined in National Instrument 43-101. Wardrop concluded that “technically and economically, the Wolverine Project is a viable project”.
Average Annual Production
| Average Annual Production |
Metal in Concentrates |
Contained Metal -- 1400 tpd Undiluted Ore
|
| Zinc |
53,450 t (117.8 M pounds) |
| Copper |
4,680 t (10.3 M pounds) |
| Lead |
5,860 t (12.9 M pounds) |
| Silver |
4,933,000 oz |
| Gold |
20,200 oz |
*Estimates based on average annual production (for first three years) in concentrates
Wolverine Project Economics
The economics of the project have been estimated using a large range of metal price scenarios to reflect historic and current prices. The Wardrop financial analysis is on a pre-tax basis that does not include corporate income tax or Yukon mining royalties. Using these price scenarios, the project economics indicate a large range of potential outcomes.
Metal Price Scenarios |
| Based on assumptions in Wardrop Jan 2007 Optimized Feasibility Study |
2-yr backward
Avg. |
3 yr backward
Avg. |
Price at
(Nov, 2006) |
| NPV 8% pre-tax |
$184.2 MM |
$104.8 MM |
$571.7 MM |
| Internal Rate of Return (pre-tax) |
26.3% |
18.9% |
56.8% |
| 3 yr Cumulative Cash flow ('09-2011) |
$217.7 MM |
$172.5 MM |
$439.3 MM |
| Payback Period yrs |
3.0 |
3.9 |
1.5 |
Wardrop Metal Price Scenarios (US dollars) |
| |
2-Yr Backward
Avg. |
3 yr backward
Avg. |
Price at
(Nov, 2006) |
| Zinc - US$/lb |
$1.07 |
$0.87 |
$1.84 |
| Silver - US$/oz |
$9.48 |
$8.54 |
$12.69 |
| Copper - US$/lb |
$1.85 |
$1.85 |
$1.85 |
| Gold - US$/oz |
$526 |
$487 |
$626 |
| Lead - US$/lb |
$0.52 |
$0.48 |
$0.76 |
| Exchange Rate |
0.855 |
0.82 |
0.847 |
Capital Costs
Estimated capital costs as at January 2007 (excluding working capital requirements) include direct and indirect costs, and aggregate $175.6M before contingency of $24.3M and $7.6M in owner’s costs. The estimated capital costs are based on all new equipment and are as follows:
| Estimated Capital Costs |
| Wardrop Direct Costs (CAD$M) |
Wardrop Indirect Costs (CAD$M) |
| Site preparation and roads |
$23.1 |
Engineering and procurement |
$8.5 |
| Mill and process |
$49.6 |
Construction management |
$8.6 |
| Power generation |
$0.9 |
Construction indirects |
$11.1 |
| Tailings & water supply and reclaim |
$9.0 |
Materials and inventory |
$3.2 |
| Service facilities and mobile |
$15.5 |
Duties and freight |
$4.5 |
| Permanent camp |
$5.7 |
Commissioning |
$0.8 |
| Mining |
$35.1 |
|
|
| Subtotal |
$139.9 |
|
$36.7 |
| Sub Total |
$175.6 |
| Contingency |
$24.3 |
| Owner’s Costs |
$7.6 |
| Total |
$207.5 |
Operating Costs
Estimated life-of-mine unit operating costs are determined on a cost per tonne mined basis and aggregate $95.58 per tonne as follows:
| Operating Costs |
Cost Centre |
CAD $/tonne mined |
Mining |
$42.18 |
Milling |
$14.49 |
Maintenance |
$8.45 |
General and Administration |
$15.25 |
Power |
$15.21 |
Total |
$95.58 |
Metallurgy
| Metallurgy |
| |
Assays |
Recoveries |
Product |
Tonnes |
Zn
% |
Cu
% |
Pb
% |
Ag
g/t |
Au g/t |
Zn
% |
Cu
% |
Pb
% |
Ag
% |
Au
% |
ROM |
5,151,459 |
9.66 |
0.91 |
1.26 |
281.8 |
1.36 |
|
|
|
|
|
Post DMS |
4,238,149 |
11.70 |
1.10 |
1.52 |
340.86 |
1.64 |
|
|
|
|
|
Cu conc |
174,397 |
3.74 |
21.30 |
2.25 |
4409 |
11.3 |
1.2 |
79.9 |
8.0 |
60.0 |
33.4 |
Pb conc |
132,958 |
12.4 |
1.97 |
22.30 |
1625 |
13.5 |
2.4 |
4.3 |
46.0 |
12.9 |
23.2 |
Zn conc |
818,274 |
54.2 |
0.36 |
0.98 |
151 |
0.74 |
89.4 |
6.7 |
17.2 |
10.2 |
10.9 |
Infrastructure and Transportation
The project area is currently accessed by a 24km mine access road that connects Wolverine to the Robert Campbell Highway and an 800 metre long gravel airstrip. Yukon Zinc plans to extend the airstrip to 1200 metres and upgrade the surface for larger aircraft required for transport of construction and mine personnel. The development plan provides for the construction of a 150 person camp at the mine site to house workers at the mine during both construction and operations. Initial construction work will be supported from the 50-man exploration camp.
Zinc, copper and lead concentrates are to be trucked approximately 860 kilometres to concentrate loading facilities in the port of Stewart, British Columbia for trans-shipment to smelters in Asia. The high content of silver and gold in the copper and lead concentrates increases their unit value and reduces the impact of high transportation costs.
> See full Optimized Feasibility Study News Release
> See pictures from Wolverine
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