Ongoing Metallurgical Testwork Continues to Improve Hualilan Economics

Highlights

“We are excited to announce that our latest metallurgical testwork has significantly improved our Hualilan Project. By unlocking the potential to economically recover zinc at head grades as low as 0.4%, we are now able to access 211.5 kt of zinc within the Hualilan Mineral Resource Estimate. This is a substantial increase compared to the 62 kt of zinc initially included in the Scoping Study mine plan.

The testwork also achieved a higher zinc concentrate grade of 55%, which will notably enhance zinc payability. Alongside zinc, we have also seen improvements in gold and silver recoveries, reaching 97.5% and 93.0% respectively. The simplified flowsheet reduces reagent consumption, also has the ability to potential lower our operating costs.

These material opportunities include:

1. The recently confirmed conversion of the Au-Ag concentrate produced by the flotation circuit into doré on site, thereby reducing freight and TC/RC costs and increasing payability.

2. Inclusion of a heap leach, alongside a floatation circuit, to capture value from the low-grade portion of the Hualilan orebody, which was excluded under the low-risk/ high-grade/ low- tonnage scoping study strategy.

3. Re-optimisation focused on a larger open pit case rather than the high-grade/ low-tonnage underground focused Scoping Study strategy given the improved gold price and outlook.

4. Re-optimisation of both the underground and open pit (which was done at a gold price of US$1700) using the materially lower costs and cut-off grades supported by work subsequent to the completion of the Scoping Study.

5. Reduction in the cut-off grade of zinc ore fed into the flotation circuit as outlined in this ASX release.

The results of the testwork investigating the potential lower-grade zinc concentrate pathway support the generation of a simplified flow sheet permitting:

This metallurgical study provides the potential to unlock a significant proportion of the zinc at Hualilan. Based on flotation test work undertaken prior to the SS, an assumption was used in the Scoping Study that an economic zinc concentrate was only achievable from head grades ≥1.5% Zn. The Hualilan Mineral Resource Estimate (“MRE”) contains approximately 211.5 kt Zn above 0.4% Zn compared with the 62 kt Zn produced in the SS mine plan which focused on the high-grade core of Hualilan.

This 62 kt of Zn contributed revenue of $US132²million to the overall SS revenue of $US1,157² million. Thus, the additional zinc recovery has the potential to provide a material increase in the revenue and overall value of Hualilan.

source