JV Article: AbraPlata Pursues Strategic Partner Following Positive PEA in Argentina

AbraPlata Resource Corp. (TSXV: ABRA) has tabled a positive preliminary economic assessment (PEA) on its 80 sq. km Diablillos silver-gold project in Argentina’s Salta Province, 150 km southwest from the city of Salta.

The PEA features strong economics, with an after-tax net present value (NPV) of US$197 million at a 7.5% discount rate, an after-tax internal rate of return of 30.2%, and a 3-year pay-back. The project could produce 9.8 million oz. of silver equivalent each year at an all-in sustaining cost of US$7.52 per oz. silver equivalent.

AbraPlata bought the project in 2016 from SSR Mining (TSX: SSRM), and AbraPlata President and CEO Willem Fuchter says the acquisition was “fortuitous because we were able to get it when market valuations were low.”

He says SSR had done “considerable work” on the property already, spending over US$30 million on engineering, metallurgical testing and geotechnical work. It provided AbraPlata with a solid technical foundation on which to build its recent PEA.

As of an August 2017 resource estimate, Diablillos contains 27.1 million indicated tonnes grading 93.1 grams silver per tonne and 0.84 gram gold for 80.9 million oz. silver and 732,000 oz. gold (or 139 million oz. silver-equivalent). The deposit’s epithermal mineralization is mostly found in the centre of the system at the Oculto deposit. The company says 95% of its resource comes from Oculto, however it still has several satellite deposits it’s in the process of drilling.

Drilling pad and platforms at the Oculto zone at AbraPlata Resource Corp.’s Diablillos silver-gold project in Argentina’s Salta Province. Credit: AbraPlata Resource Corp.

Drilling pad and platforms at the Oculto zone at AbraPlata Resource Corp.’s Diablillos silver-gold project in Argentina’s Salta Province. Credit: AbraPlata Resource Corp.

One such deposit is Fantasma, which lies 800 metres west of Oculto. It remains open for expansion to the east, and AbraPlata believes, based on its current understanding of the geology, that Fantasma may extend into Oculto.

AbraPlata says satellite deposits might expand the resource by 10%, while in-pit drilling could add another 20-30%.

However, the company says the most exciting expansion potential lies in the high grade zone below its current pit shell.

AbraPlata devised its mine plan to optimize the project’s NPV and the plan only accounts for 60% of the resources outlined at Oculto. If the company can expand its in-pit resources, additional resources located beneath the pit shell could become economic.

“Some of our drill holes have intercepted grades of up to 17 grams per tonne over 10 metres down there,” explains Fuchter.

He describes Oculto as containing feeder zones below the pit shell that have the potential for narrower but higher grade gold mineralization that AbraPlata could exploit later in the pit’s eight year life through underground mining.

AbraPlata intends to deliver a fully permitted project with a feasibility study by the end of 2019.

Click here to continue reading...

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

Part of the Stock Digest family of websites

Small Cap Stock Digest



Name Last Change
DOW 25745.70 0
S&P 500 2824.23 0.30%
NASDAQ 7728.97 0.06%
TSX 16167.56 0.13%
TSX-V 637.97 0.00%

Resource Commodities

Name Last Change
Gold 1315.81 0.05%
Silver 15.54 0.39%
Copper 2.92 0.000
Platinum 869.61 0.09%
Oil 59.83 1.34%
Natural Gas 2.82 1.91%
Uranium 26.50 2.32%
Zinc 1.29 0.00%