6 June 2017 – Positive PFS results and Ore Reserve estimates for proposed ABM mine at Kudz Ze Kayah, Yukon
BMC (UK) LIMITED (“BMC” or the “Company”), a private UK-based resources development company, today announces positive Prefeasibility Study (“PFS”) results for its proposed ABM Zn/Cu/Pb/Ag/Au mine at the Kudz Ze Kayah Project (“KZK”). The ABM deposit is a zinc-dominant polymetallic volcanogenic massive sulphide (“VMS”) deposit with significant copper, lead and precious metals credits. The KZK Project is owned through BMC’s 100% subsidiary BMC MINERALS (No. 1) LTD (“BMC Minerals”), and is located east of Whitehorse in the Yukon Territory, Canada.
- Probable ABM Ore Reserve (JORC 2012) comprising: 17.6 Mt @ 5.5% Zn, 1.6% Pb, 0.8% Cu, 130g/t Ag, 1.2g/t Au
- Production commencing first half 2021;
- 10-year approximate mine life from the ABM Deposit;
- US$594 million net present value (after tax, at a 7% discount rate) base case model (at time of decision to construct);
- US$298 million preproduction capital cost, including owners and indirect costs of US$40 million and contingency of US$21 million;
- Low operating costs with life of mine C1 costs and all in sustaining cost of US$(0.29) and US$(0.13) per lb Zn respectively, net of by-products;
- 88% of ore will be mined by low cost open pit mining, with the remainder sourced from a small underground mine;
- Conventional flotation processing technology will be utilised to produce separate zinc, lead and copper concentrates, with significant precious metal credits;
- 38% after tax IRR with rapid payback of pre-production capital within 2 years of first production;
- Using current metal prices and foreign exchange rate, net present value (after tax, at a 7% discount rate) increases to US$630 million and after tax IRR increases to 42%;
- Using current concentrate treatment charges, in addition to current metal prices and foreign exchange rate increases net present value (after tax, at 7% discount rate) to US$736 million and after tax IRR to 47%.
 Base Case: Metal prices and exchange rate based on long term consensus assumptions of Cu US$2.95/lb, Zn US$1.07/lb, Pb US$0.94/lb, Au US$1,292/oz, Ag US$19.31/oz and exchange rate of C$1.00:US$0.79.
 Zinc production accounts for approximately 30% of net revenue. On a co-product basis, C1 costs are US$0.21 per lb Zn, US$0.17 per lb Pb, US$0.69 per lb Cu, US$426 per oz Au and US$6.14 per oz Ag.
 As at 26th May 2017: Cu US$2.57/lb, Zn US$1.19/lb, Pb US$0.95/lb, Au US$1,265/oz, Ag US$17.29/oz, exchange rate C$1.00:US$0.74.
Full announcement: 20170606 KZK PFS Release_Final