BMC Minerals has confirmed the world class quality of the ABM Mine at its 100% owned Kudz Ze Kayah Project in the Finlayson District, in Canada’s SE Yukon.
A new study has concluded that the project is on target to become Canada’s number 1 producer of zinc and silver as well as a top 10 copper producer.
The updated economic assessment also confirmed the robust financial nature of its development with the project providing a pre-tax NPV7% of C$1.3 billion, pre-tax IRR of 47% and pre-tax free cash flow of C$380 million per annum at current commodity prices and “steady state” production.
BMC President and CEO, Scott Donaldson, said the completion of the Updated Economic Review and its confirmation of the robust economics of the proposed ABM Mine reinforces the company’s view that the Kudz Ze Kayah Project stands unique amongst projects of its type in the world.
“Future value adding and de-risking is expected as we progress through the final regulatory processes, project financing, and demonstrate the potential resource growth through exploration, which will (I believe) only elevate the projects attractiveness.
“The Finlayson district within which our project is located is truly remarkable. We believe this district is something special and this project will be a sustainable mining project that can continue to operate and provide transformational opportunities and benefits for all Yukoners for at least the next generation.”
DFS study update
The Kudz Ze Kayah Project ABM Mine Economic Review was based on the technical and production schedule data from a 2020 Definitive Feasibility Study (DFS).
It incorporated updates to economic impacts of conditions imposed by the positive Federal and Yukon Government Decision Document in 2022 for development of the project, impacts of Canada’s Greenhouse Gas Pollution Pricing Act, all capital and operating costs using updated labour rates and refreshed quotes provided by suppliers and contractors,
No changes to the Mineral Resource Estimate, Mine Plan or Mineral Reserve were required as a result of the review.
The updated Economic Review highlights equivalent average annual production during steady state operations of 606 Mlbs (ZnEq), or 32.2 Moz (AgEq) or 191 Mlbs (CuEq). By individual metal this equates to 235 Mlbs Zn (106.8 ktonnes) and 7.8 Moz Ag and 32 Mlbs Cu (14.3 ktonnes) and 56,500 oz Au, and 56 Mlbs Pb (25.3 ktonnes) per annum.
The initial pre-production Capital costs total US$492M, translating to an attractive initial capital intensity of US$0.11/lb ZnEq (US$240/t), or US$ 0.34/lb CuEq (US$761/t) or US$2.05/oz AgEq.
Robust capital cost
Improved robustness of capital cost estimate has been achieved by increasing the Cost Contingency allowance from US$36M to US$54.9M and Owners & Indirect Cost allowance increased from US$94M to US$125.3M.
The proposed ABM Mine at BMC’s 100% Kudz Ze Kayah Project is located within Kaska traditional territory in the Finlayson District in South-East Yukon, approximately 350 km by road from the BC-Yukon border.
The 2020 DFS outlined a project designed to be mined by both underground (11%) and open pit (89%) methods. Ore is expected to be processed via a conventional single stage crushing circuit with a semi autogenous grinding (SAG) mill and ball mill design.
Grinding will be followed by simple froth flotation with approximately 50% of the copper and zinc to be floated via the use of a pre-float system. The project will produce three concentrates, a copper concentrate, a zinc concentrate, and a high precious metals (“HPM”) concentrate.
Approximately 90% of the first five years of concentrate production have been pre-sold with the remainder reserved until the project is in production. The copper concentrate will be delivered to smelters in Canada while the remainder will be exported.
The ABM deposit includes multiple lodes and multiple zones and styles of mineralisation including massive sulphides and stockwork mineralisation which is typical of volcanogenic-hosted massive sulphide (“VHMS”) deposits. The massive sulphide and stockwork mineralisation can be zinc rich, copper rich or both and is typically between 15-25 m in true width.
Significant upside
BMC’s examination of the project area has shown that demonstrated potential exists for production and mine life increases as the company looks to follow up on reconnaissance holes already drilled into massive and stringer sulphide targets to delineate additional near mine (< 1km from the current Mineral Reserve) deposits.
The ABM deposit remains open at depth and massive sulphide mineralisation has been drilled along strike, while immediate exploration focus is on near-mine targets to drive more immediate value to shareholders and lower development hurdles.
Historical exploration activity by BMC and previous owners confirms multiple high grade exploration targets within one km of the existing Mineral Reserve.
Existing drill intercepts to be followed up within this area include:
- 6.4m @ 5.2% Cu, 5.6% Zn (K97-181) and 2.1m @ 3.4% Cu, 11.5% Zn (K97-183) from the copper rich ABM “feeder zone” target; and
- 3.8m @ 5.1% Zn, 128g/t Ag (K18-484) and 0.5m @ 9.0% Zn, 26g/t Ag (K16-415) located approximately 1km along strike west of the ABM deposit.
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