Bunker Hill Mining Corp. (BNKR:CSE; BHLL:OTCMKTS) released the findings of a preliminary economic assessment (PEA) of restarting the Bunker Hill mine in Idaho.
"Our PEA confirms that by maximizing the use of existing resources, partnerships and infrastructure, the Bunker Hill mine has the potential to be restarted rapidly as a low cost, long life, sustainable operation," CEO Sam Ash said in the release.
The report outlined an operation that will produce 550 million pounds (550 Mlb) of zinc, 290 Mlb of lead and 7 million ounces of silver over 10 years of mine life. In other words, it will produce 912 Mlb of zinc equivalent at a grade of 9.3%.
The company called the project economics robust, with the mine generating an average of $20 million per year of free cash flow and EBITDA of $30 million over the 10 years, payback in 2.5 years, a net present value of $101 million and an internal rate of return of 46%.
To restart the mine, initial capex is estimated to be $42 million, to be paid over the first 15 months. All-in sustaining costs are forecasted at $0.65 per payable pound of zinc, net of byproducts.
"The robust financial returns in the PEA, including a $101 million NPV, 46% IRR, and 2.5 year payback, do not include the significant upside to come from the on-going high-grade silver exploration which we expect to further increase cash flow margins," Ash said. "Based an annual average free cash flow of $20 million at metal prices below spot levels, we can self-fund these exploration efforts while continuing to grow the company."
"We look forward to progressing further technical studies and project finance discussions over the coming months," Ash added.
The company also indicated that a Bunker Hill restart will provide the local community, Shoshone County, with 150–200 new mining and administrative jobs and other benefits.
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