Superior Lake Resources (ASX: SUP) of Australia has completed a bankable feasibility study for its project of the same name 200 km east of Thunder Bay, Ontario. The project encompasses two deposits – the large Pick Lake and smaller Winston Lake.
Both deposits have historic production. The Winston Lake mine and 1,000-t/d mill was operated by Inmet Mining from the late 1980s to the late 1990s. Ore from Pick Lake was also fed to the mill beginning in 1995. Historical zinc concentrate graded 52% to 53.5% zinc, and copper concentrate contained 22% to 25% copper.
The new feasibility study outlines an economic project. The net present value (8% discount) is C$157 million and the internal rate of return is 31% (both numbers before tax). The all-in sustaining cost per pound of zinc will be C$0.74 over the life of the project.
The initial capex is C$86 million, excluding owners and pre-production expenses for a project with a mine life of nine years. At full production, the Superior Lake project will have an annual output of 38,000 tonnes zinc and 1.4 tonne of contained zinc. The mill will have a throughput of 325,000 tonnes per year treating ore with an average grade of 13.7% zinc at an average recovery of 96%.
Superior Lake says most of the ore for a reopened mill will come from the Pick Lake deposit. Together, the two deposits have an indicated resource of 2.1 million tonnes grading 18.0% zinc, 0.9% copper 0.4 g/t gold and 34 g/t silver. Within the indicated resource, there are 2 million tonnes of probable reserves at 13.9% zinc, 0.6% copper, 0.2 g/t gold, and 26.2 g/t silver. The inferred resource is 280,000 tonnes averaging 16.2% zinc, 1.0% copper, 0.3 g/t gold, and 37 g/t silver.
(This article first appeared in the Canadian Mining Journal)