Silver Elephant: Gibellini Vanadium Project's PEA Shows 25.4% After Tax IRR At $10/lb V2O5, Capex $147 Million

Date/time : 2021-08-30 06:57 AM
Symbol :

ELEF

Company : Silver Elephant Mining Corp.
Price : -
Market cap : -
O/S : -
Exchange :

TSX

Industry :

Other Industrial Metals & Mining

Full story

Silver Elephant: Gibellini Vanadium Project’s PEA Shows 25.4% After Tax IRR At $10/lb V2O5, Capex $147 Million

VANCOUVER, BC / ACCESSWIRE / August 30, 2021 / Silver Elephant Mining Corp. ("Silver Elephant" or the "Company") (TSX:ELEF)(OTCQX:SILEF)(Frankfurt:1P2N) is pleased to announce the results of a preliminary economic assessment (the "2021 PEA") for its Gibellini vanadium project ("Gibellini project") that demonstrates an after-tax internal rate of return ("IRR") of 25.4%, and after-tax cumulative cash flow of $260.8 million, assuming an average vanadium pentoxide (V2O5) price of $10.00 per pound.

The Gibellini project is designed to be an open pit, heap leach operation in Nevada's Battle Mountain region (25 km south of Eureka) with initial capital cost of $147 million, average annual production is 10.2 million pounds of V2O5 , at an all-in sustaining cost of $6.04 per pound with strip ratio of 0.18 to 1 (waste rock:leach material).

As of August 27, 2021, the European price of vanadium pentoxide (98%) was $9.60 per pound according to www.asianmetal.com.

The 2021 PEA was prepared by Wood Group USA, Inc (Wood) and Mine Technical Services Ltd. (MTS). The technical report that summarizes the 2021 PEA will be filed under the Company's SEDAR profile and available within 45 days.

All dollar values are expressed in US dollars unless otherwise noted.

2021 PEA Highlights:

The 2021 PEA is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

Highlights of the 2021 PEA (after tax):

Internal rate of return

25.4%

Payback period

2.49 years

Life of mine

11.1 years

Total V2O5 recovered

114.6 million lbs

Average V2O5 selling price

$10 per lb

Cash operating cost

$4.70 per lb V2O5

All-in sustaining cost

$6.04 per lb V2O5

Initial capital cost including 25% contingency

$147 million

Average grade

0.271% V2O5

Strip ratio (waste:leach)

0.18:1

Mining operating rate

9,700 tons per day

Total material leached

33.4 million tons

Average V2O5 recovery through direct heap leaching

63.4%


Mineral Resources

The PEA Mineral Resource is based on Measured, Indicated and Inferred Mineral Resource estimates for the Gibellini deposit and Inferred Mineral Resource estimates for the Louie Hill and Bisoni McKay deposits, totaling131.34 million pounds of contained V2O5 in the Measured and Indicated categories, and 227.81 million pounds of contained V2O5 in the Inferred catetory.

Mineral Resource Statement, Gibellini

Confidence Category

Domain

Cut-off
V2O5 (%)

Tons
(kton)

Grade
V2O5 (%)

Contained
V2O5 (klb)

Measured

Oxide

0.101

3,960

0.251

19,870

Transition

0.086

3,980

0.377

29,980

Indicated

Oxide

0.101

7,830

0.222

34,760

Transition

0.086

7,190

0.325

46,730

Total Measured and Indicated

22,950

0.286

131,340

Inferred

Oxide

0.101

160

0.170

550

Transition

0.086

10

0.180

30

Reduced

0.116

14,800

0.175

51,720

Total Inferred

14,970

0.175

52,300

Notes:

1. The Qualified Person for the estimate is Mr. Todd Wakefield, RM SME of Mine Technical Services Ltd. The Mineral Resources have an effective date of5 June 2021. The resource model was prepared by Mr. E.J.C. Orbock III, RM SME.

2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

3. Mineral Resources are reported at various cut-off grades for oxide, transition, and reduced material.

4. Mineral Resources are reported within a conceptual pit shell that uses the following assumptions: Mineral Resource V2O5 price of $14.64/lb; mining cost: $2.21/st mined; process cost: $13.62/st processed; general and administrative (G&A) cost: $0.99/st processed; metallurgical recovery assumptions of 60% for oxide material, 70% for transition material and 52% for reduced material; tonnage factors of 16.86 ft3/st for oxide material, 16.35 ft3/st for transition material and 14.18 ft3/st for reduced material; royalty: 2.5% net smelter return (NSR); shipping and conversion costs: $0.37/lb. An overall 40° pit slope angle assumption was used.

5. Rounding as required by reporting guidelines may result in apparent summation differences between tons, grade and contained metal content. Tonnage and grade measurements are in US units. Grades are reported in percentages.

Mineral Resource Statement, Louie Hill

Confidence Category

Cut-off
V2O5(%)

Tons
(kton)

Grade
V2O5 (%)

Contained
V2O5 (klb)

Inferred

0.101

7,520

0.276

41,490

Notes:

1. The Qualified Person for the estimate is Mr. Todd Wakefield, RM SME, of Mine Technical Services Ltd. The Mineral Resources have an effective date of 5 June 2021. The resource model was prepared by Mr. Mark Hertel, RM SME.

2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

3. Oxidation state was not modeled.

4. Mineral Resources are reported within a conceptual pit shell that uses the following assumptions: Mineral Resource V2O5 price of $14.64/lb; mining cost: $2.21/st mined; process cost: $13.62/st processed; general and administrative (G&A) cost: $0.99/st processed; metallurgical recovery assumptions of 60% for mineralized material; tonnage factors of 16.86 ft3/st for mineralized material; royalty: 2.5% net smelter return (NSR); shipping and conversion costs: $0.37/lb. An overall 40° pit slope angle assumption was used.

5. Rounding as required by reporting guidelines may result in apparent summation differences between tons, grade and contained metal content. Tonnage and grade measurements are in US units. Grades are reported in percentages.

Mineral Resource Statement, Bisoni-McKay

Area

Confidence
Category

Domain

Cut-off
V2O5 (%)

Tons
(kton)

Grade
V2O5 (%)

Contained
V2O5 (klb)

North Area A

Inferred

Oxide

0.107

6,970

0.29

39,720

Transition

0.124

1,500

0.33

9,900

Reduced

0.139

9,080

0.39

70,580

Total North Area A

Inferred

All

Variable

17,540

0.34

120,210

South Area B

Inferred

Oxide

0.107

1,470

0.28

8,160

Transition

0.124

320

0.40

2,540

Reduced

0.139

510

0.30

3,100

Total South Area B

Inferred

All

Variable

2,300

0.30

13,810

Total

Inferred

All

Variable

19,850

0.34

134,020

Notes:

1. The Qualified Person for the estimate is Mr. Todd Wakefield, RM SME, of Mine Technical Services Ltd. The Mineral Resources have an effective date of 5 June 2021.

2. Mineral Resources are reported at various cut-off grades for oxide, transition, and reduced material.

3. Mineral Resources are reported within a conceptual pit shell that uses the following assumptions: Mineral Resource V2O5 price of $11.50/lb; mining cost: $2.90/st mined; process cost: $13.75/st; general and administrative (G&A) cost: $1.00/st processed; metallurgical recovery assumptions of 65% for oxide material, 56% for transition material and 50% for reduced material; tonnage factors of 16.86 ft3/st for oxide material, 16.35 ft3/st for transition material and 14.18 ft3/st for reduced material; royalty: 2.5% net smelter return (NSR); shipping and conversion costs: $0.625/lb. An overall 40° pit slope angle assumption was used.

4. Rounding as required by reporting guidelines may result in apparent summation differences between tons, grade and contained metal content. Tonnage and grade measurements are in US units. Grades are reported in percentages.

Mining & Processing

A subset of the Gibellini and Louie Hill Mineral Resource estimates were adopted in the 2021 PEA mine plan. Bisoni McKay Mineral Resource estimate was not included in the mine plan in the 2021 PEA to better reflect the Company's already submitted plan of operation in its permitting efforts.

Subset of the Gibellini Mineral Resource Estimate within the 2021 PEA Mine Plan

Leach Material

Domain

Cutoff V2O5 (%)

Tons ('000)

V2O5 Grade (%)

Contained V2O5 Lbs ('000)

Measured

Oxide

0.135

3,890

0.253

19,684

Transition

0.135

3,944

0.378

29,824

Reduced

0.135

-

0.000

-

Indicated

Oxide

0.135

6,246

0.240

30,024

Transition

0.135

7,056

0.316

44,624

Reduced

0.135

-

0.000

-

Total Measured and Indicated

21,136

0.294

124,156

Inferred

Oxide

0.135

116

0.174

403

Transition

0.135

-

0.000

-

Reduced

0.135

5,183

0.163

16,919

Total Inferred

5,299

0.163

17,323


Subset of the Louie Hill Mineral Resource Estimate within the 2021 PEA Mine Plan

Leach MaterialDomainCut-off
(%)
Tonnage
(kton)
V2O5
(%)
V2O5
(klb)
InferredOxide0.1556,9630.28239,315
Transition0.155-0.000-
Reduced0.155-0.000-
Total Inferred 6,9630.28239,315


Capital and operating costs for the 2021 PEA are based on supplying 3 Mt of crushed and agglomerated leach material annually from two open pits at Gibellini and Louie Hill. Initial mine development will be focused on Gibellini, with Louie Hill following nine years later.

Mining at the Gibellini and Louie Hill deposits is planned to be a conventional open pit mine using a truck and loader fleet consisting of 100-ton trucks and front-end loaders. A power line would be constructed from an existing transmission line and water will be leased from a private ranch. Both water and power sources are within five miles of the planned mining operations.

The average annual mine production during the 11.1 year mine life will be 3.56 million tons of leach material (3 Mst) and waste (0.56 Mst) at a strip ratio of 0.18 (w:l).

Period

Total

Rock Waste

Oxide Leach

Transition Leach

Reduced Leach

Leach Total

V2O5

Contained

V2O5

Produced
V2O5

(kt)

(kt)

(kt)

(kt)