Silver Bull has secured a water source and permits for all their water needs (Photo: Bloomberg)
Silver Bull Resources (SVB:TSXV) has secured all of the necessary water permits for their Sierra Mojada silver-zinc project in Coahuila, Mexico. The company announced this morning that it has received permits allowing for up to 3.5 million cubic metres per year to be used at the project. These allow Silver Bull to draw water from the regional Laguna del Ray aquifer which covers over 3,000 square kilometres.
According to the company's November 2013 preliminary economic assesement (PEA), the 8,500tpd processing facility will require roughly 2 million cubic metres of annual water with an additional 500,000 cubic metres for potable water required. As a result, Silver Bull has now secured all of the necessary water for their Sierra Mojada project which represents a significant derisking of their project.
Tim Barry, President and CEO of Silver Bull, states: "This is another major step forward for the project. One of the major killers of projects in dry regions can often be access to enough water; we do not have this problem at Sierra Mojada. Hydrological studies completed on the area clearly indicate that there is sufficient water available to support our operations as well as future growth for nearby communities as a result of the jobs we create in the region. This is yet another key milestone to derisk this project and advance it forward."
Sierra Mojada is located in desert climate of Coahuila State in Northern Mexico (Image: Silver Bull Resources Inc.)
The November 2013 PEA highlighted the robustness of the Sierra Mojada project with an after IRR of 23% and a payback of the initial $297 million in capital within 2.9 years. The project is set to produce silver and zinc at average grades of 73.4g/t and 2.79%, respectively over an 18 year mine-life, producing 98.4 million ounces of silver and 982.000 tonnes of zinc annually.
The zinc component is the most interesting as it represents above average grade and is one of very few new zinc projects set to come online in the next few years.
The company is working towards a pre-feasibility study while conserving their $5 million in cash. In order to complete the pre-feasibility, there will be no additional drilling (or associated costs) necessary as they have previously done sufficient drilling for a pre-feasibility level study.
The biggest hurdle remaining for the company the financing gap associated with the project. One of the company's largest shareholders is Couer d'Alene Mines which owns over 10% of the shares.
Read: Silver Bull Receives Water Permits for Flagship Sierra Mojada Silver-Zinc Project, Coahuila, Mexico
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