It may be April Fools’ Day, but InZinc Mining‘s (TSXV:IZN) new preliminary economic assessment (PEA) for its zinc-copper-silver-gold West Desert project, located in Western Utah, is no joke.

Highlights include an after-tax net present value of US$258.1 million at an 8-percent discount, an internal rate of return of 23 percent and a payback period of 3.7 years, assuming a zinc price of $1 per pound. Initial CAPEX sits at $247.4 million, including contingencies.

The PEA also looks at a 5,000-tonne-per-day underground mining operation that will ramp up to 6,500 tonnes per day in its third year of operation. It will use “transverse long-hole open stoping mining methods based on the underground resource only,” as per today’s press release, and is expected to produce 2.37 million tonnes a year over a 14.8-year mine life. That amounts to average annual zinc output of 107.9 million pounds; yearly magnetite and copper production are pegged at 1 million tonnes and 9.9 million pounds, respectively.

Today’s news has been a long time coming. InZinc, then known as Lithic Resources, first completed a PEA for the Crypto zinc-copper-indium project back in August 2010; unfortunately, it didn’t receive the most positive reception. Determined to rectify the situation, the company gave the project a new name — West Desert — and commissioned a new PEA for it, commenting that it saw “significant potential to improve the project by expanding the scope beyond previous assessments.”

Chris Staargaard, president and CEO of InZinc, believes the company has accomplished that goal. He commented today, “[w]ith the potential for both positive economics and significant upside remaining in the form of resource expansion, this project represents a very high-quality opportunity for our shareholders.” Such resource expansion possibilities include ”good potential to increase the resource to the east, west and south” and potential for the discovery of both “localized higher-grade areas within the resource” and “additional mineralized zones within the Project area.”

Moving forward, InZinc will be filing its PEA on SEDAR and completing future work leading to a prefeasibility study. That will include “drilling, engineering and marketing studies, hydrological and geotechnical analysis” in addition to environmental and archaeological studies. The company is hopeful that West Desert will ultimately help fill a gap in zinc production expected to be caused by the closure of a number of key zinc mines.

Shares of InZinc are currently selling for $0.155, up 10.71 percent.


Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: InZinc Mining is a client of the Investing News Network. This article is not paid-for content. 

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