Pacifico Minerals - Developing an Open Pit Lead-Silver Project in Western Australia
Pacifico Minerals (ASX:PMY) has released a great looking new investor deck covering all the recent updates to their project.
We highly recommend giving the deck a full read (linked below) but here are our initial takes on the most interesting points.
Key points of interest
Australia’s largest undeveloped, near surface Lead-Silver-Zinc deposit.
Granted mining leases, EPA approved, 150km from Wyndham Port in Western Australia.
Impressive Project Economics
Pre-Tax NPV A$303m, Pre-Tax IRR 46%, ~1.6-year payback from start of production.
Rare ASX exposure to Silver markets.
1.5 Million ounces per annum of Silver production. Both Lead and Silver critical to the transition to a low carbon economy.
Low Risk Operation located in a Tier 1 Mining Jurisdiction
Initial 10-year Open cut mine plan underpinned by 92% Reserves and low cash operating cost.
Fully Funded through to a Decision to Mine
A$15.5m cash on hand to fund Resource expansion and Definitive Feasibility Study (“DFS”).
Near term opportunities to add significant value
Mine Life upside supported by a demonstrated ability to increase Resource size and confidence.
The PFS highlights the low-risk nature of the Sorby Hills Project with a well-defined large-scale Mineral Resource, conventional crush-mill-float processing circuit, high metal recoveries and key approvals received
75%/25% Joint Venture Partnership with China’s largest Lead smelter and Silver producer, Henan Yuguang Gold and Lead Co. Ltd.
- Granted pre-native title mining tenements.
- Large shallow Resource with significant growth potential.
- Open Pit Reserves of 494kt Lead and 17.6Moz Silver1 and growing.
- Located close to existing infrastructure:
- ~50km north-east of Kununurra;
- ~150km by existing sealed road to Wyndham Port; and
- Opportunity to access hydro grid power.
Large shallow Resource comprising gently dipping Lead-Silver deposits with well defined geology
Lead and Silver in the clean energy economy
Lead batteries are a key in the transition to a low carbon economy, applications include:
• Electric Vehicles 12V lead batteries power the EV battery management and safety systems. ‘Stop-start’ technology requires batteries with 25% more lead; • E-bikes - Roughly 15 million are sold each year in China alone; and • 5G network base stations - high lead consuming application with a Chinese production. increase of 134% in 20181.
- Predicted growth in lead demand - CAGR of 6.74% between 2018 and 2022.
- Silver’s industrial applications, particularly in emerging green industries, provides a supply-demand overlay to the traditional storage of wealth thematic.
- Silver is the best-known conductor of electricity.
- Solar Photovoltaics (PV) cells – Silver’s use in photovoltaics grew by 7% in 20194.
- Silver demand edged higher in 2019 to 991.8 Moz, up 0.4% whist production declined by 1.3%
The Assay Group Mining Magazine (https://www.theassay.com/articles/lead-5-things-to-look-for-in-2019) , ASX: G1A Feb 2019 Origin: Wood Mackenzie, Business Wire (www.businesswire.com/news/home/20180803005303/en/Global-Lead-Market-Analysis-Trends-Forecasts-2018-2022), The Silver Institute www.silverinstitute.org
Pacifico has engaged with the Northern Australia Infrastructure Facility (“NAIF”) in regard to financing for the Project. NAIF is an Australian Federal Government organisation with an aggregate of A$5 billion of debt finance which may be lent on concessional terms to support infrastructure development that generates public benefit for northern Australia.
Development timeline providing significant newsflow
PFS capital and operating costs
All in all a very robust presentation which does an excellent job of pointing out the very unique attributes of the project.
The full presentation is linked below, and if you'd like to discuss, you can book time to speak with an analyst about the story!