Tinka's flagship property is the Ayawilca Zinc-Silver project, located 200 km northeast of Lima, in the Pasco region of central Peru. Ayawilca is a carbonate replacement deposit (CRD), an important style of economic silver-zinc-lead mineralization in central Peru (mined deposits include the Cerro de Pasco and Morococha mines – see Figure 1). The Ayawilca Zinc Zone was discovered by Tinka in 2012 and the Company has drilled ~88,000 metres at the property as of November 2021. Ayawilca has now grown into one of the largest zinc-silver resources held by a junior company. A Preliminary Economic Assessment dated 14 October 2021 (see below) indicates that Ayawilca has the potential to be a Top-10 global zinc producer.
Tinka owns 460 km2 of contiguous mining concessions in central Peru with excellent geological potential for more discoveries and with good access to water and power. The Ayawilca project is located 40 kilometres northwest of the Cerro de Pasco mine (copper-zinc-lead-silver), and 100 km south of the giant Antamina mine (copper-zinc). A 220 KV power line crosses the project.
Figure 1. Map of central Peru highlighting existing mines and infrastructure.
The Company has identified three separate mineral deposits at the Ayawilca project:
On October 14, 2021, Tinka announced the results for an updated Preliminary Economic Assessment (“PEA”) prepared for its 100%-owned Ayawilca Zinc Zone project in central Peru. The updated PEA is disclosed in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and prepared by Mining Plus Peru S.A.C. (“Mining Plus”) as principal consultant, Transmin Metallurgical Consultants (“Transmin”), Envis E.I.R.L (“Envis”), and SLR Consulting (Canada) Ltd (“SLR”). The PEA provides the economic assessment for an underground ramp-access mine development with an 8,500 tonnes per day processing plant.
• After-tax NPV8% of US$433 million using base case metal prices of US$1.20/lb zinc, US$22/oz silver, and US$0.95/lb lead on a 100% equity basis (pre-tax NPV8% of US$720 million);
• Initial Capex of US$264 million with after-tax IRR of 31.9% (pre-tax IRR of 42.6%);
• At a spot price of $1.50/lb zinc, the after-tax NPV8% increases to US$785 million and IRR increases to 45.7% (pre-tax NPV8% of US$1.27 billion and IRR of 61%);
• Average annual production of approximately 155,000 tonnes of zinc in concentrate per year, which would make Ayawilca the largest primary zinc producer in South America and a top-10 global zinc producer;
• 43.5 million tonnes mined over 14.4 years using bulk underground mining methods (sub level stoping combined with overhand cut and fill) with daily mill throughput of 8,500 tonnes per day (tpd);
• Project located in a major mining region close to a paved highway under construction, ~200 km from an operating zinc refinery and port;
• Designed to minimize risk and environmental impact - 40% of tailings used as underground backfill and on-surface tailings treatment and storage facility to use filtered dry-stack technology;
• Numerous opportunities to add further value, including
o exploration upside for additional zinc discoveries including at Far South, Yanapizgo, and Zone 3 areas;
o further optimization of zinc and silver metallurgical recoveries;
o incorporating high grade Tin Zone resources into the mine plan.
Note: The 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 preliminary economic assessment will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.