SSR Mining Inc. received approval of the Environmental Impact Assessment (“EIA”) from the Argentine regulatory authorities for Puna Operations Inc.’s Chinchillas project in Jujuy Province. Development activities will commence, with first ore feed to the Pirquitas mill expected in the second half of 2018. Priority development activities include initiating the earthworks projects at Chinchillas, releasing construction contracts and commencing construction activities at Pirquitas, as well as pioneering works for pre-stripping at the Chinchillas deposit.
Puna Operations Inc. is a joint venture comprised of the Pirquitas property and the Chinchillas property, owned 75% and operated by SSR Mining. Chinchillas is a silver-lead-zinc deposit located approximately 42 kilometers by road from the Pirquitas property. The pre-feasibility study on the Chinchillas project evaluates the development and construction of an open-pit mine and supporting infrastructure to supply ore to the Pirquitas processing facilities over an eight-year active mining period. The operation is expected to produce a silver-lead concentrate and a zinc concentrate with an average annual production of 6.1 million ounces of silver, 35.0 million pounds of lead and 12.3 million pounds of zinc at cash costs of $7.40 per payable ounce of silver sold. The Chinchillas project has low capital intensity with an estimated $81 million capital costs, based on initial capital expenditures and utilizing certain property, plant and equipment from the Pirquitas property. The project has an attractive post-tax net present value of $178 million, based on a 5% discount rate, and post-tax internal rate of return of 29%.
Paul Benson, President and CEO said, “Receipt of the EIA approval is another positive step forward for our growth strategy. Our team can now accelerate development and construction activities to begin processing ore in 2018. Brownfields development of Chinchillas is a low capital, short payback opportunity to create value and growth for our shareholders in the near term.”