Silver X Mining’s Nueva Recuperada project in Peru. Credit: Silver X MiningA new preliminary economic assessment (PEA) for Silver X Mining’s (TSXV: AGX) flagship project in central Peru has confirmed its district-scale potential, with production of over 6 million oz. in silver-equivalent (AgEq) a year.The PEA envisions a 3,000-tonne-per-day mine operating for at least 14 years at the Nueva Recuperada property, situated within Peru’s Huachocolpa mining district known for its historic silver production.With an average annual production of 6.2 million AgEq ounces at an all-in sustaining cost of $15.8/oz, the project is given a net present value (5% discount, post-tax) of $440 million, with a 69% internal rate of return. The initial capital cost is estimated at $82 million, paid back in three years (after tax).Silver X the PEA results confirm the company’s potential to scale into a mid-tier silver producer, with two mines on one property — one of which (Tangana) is already in production and another (Plata) on its way — supported by a large resource base. The study incorporates the company’s most recent resource estimate of 35.65 million oz. AgEq measured and indicated and 116.55 million oz. AgEq inferred.“This updated PEA supports the company’s vision to increase production by up to six times within the next few years,” stated José García, CEO of Silver X, in a press release on Thursday.Shares of the company gained 1.3% by midday, extending a rally this week during which the stock hit multiple 52-week highs. The Vancouver-based silver miner has a market capitalization of C$88 million ($63m).Two mills plannedTo achieve its future production target, Silver X is aiming to have two milling facilities — one for Tangana and one dedicated to processing ore from the new Plata mining unit, from which it expects to start production next year. The Tangana mill will be a new 1,500 tpd facility, while Plata will use the existing 720 tpd Recuperada mill, which it plans to expand to 1,500 tpd as well.A new environmental and social impact assessment (ESIA) for the Tangana mining unit is in its final stages, and the company said it has worked with authorities towards its final approval, expected before the end of this year.On the exploration front, Silver X is in the midst of an 8,000-metre drill program to expand the resources at Nueva Recuperada, having already completed nearly 1,900 metres of development work at its existing mine operation.“We continue to upgrade our mineral resource, and we are very confident that the new drilling campaign that we are starting this week will result in a much stronger resource statement within a few months. On top of expanding the resource at Tangana, we now have the opportunity to rapidly increase the resource at our Plata mining unit, where we can find some of the highest grades in the district,” García stated.
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