La Cigarra PEA: $763M NPV, 41% IRR
Kootenay Silver Inc.'s La Cigarra in Mexico (Parral Silver District, Chihuahua) has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $763M, an after-tax IRR of 41%, and initial capital of $332M. The mine plan runs 14 years at about 6.22 Moz Ag (years 1-5 average) per year.
Kootenay Silver Inc.'s La Cigarra has reported Preliminary Economic Assessment (PEA) results for the silver project in Mexico (Parral Silver District, Chihuahua). The study headlines an after-tax net present value of $763M at a 5% discount rate. It reflects Kootenay Silver Inc.'s (KTN.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is $763M using a 5% discount rate. After-tax IRR is 41%. Initial capital expenditure is estimated at $332M, with life-of-mine sustaining capital of $80M. The study models a payback period of 1.9 years. All-in sustaining costs are pegged at 18.73 USD/oz. Economics are based on Consensus: $50.00/oz Ag, $3,611/oz Au, $0.91/lb Pb, $1.25/lb Zn; Spot: $67.23/oz Ag, $4,210/oz Au, $0.91/lb Pb, $1.57/lb Zn.
Production and mine plan. The project envisions an open-pit operation. Life of mine is 14 years. Average annual production is approximately 6.22 Moz Ag (years 1-5 average). Average head grade is 81 g/t Ag, 0.06 g/t Au, 0.14% Pb, 0.19% Zn (M&I). Metallurgical recovery averages 89.3%.
These figures are extracted from Kootenay Silver Inc.'s technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Measured | 2.93 Mt | 84 g/t Ag, 0.06 g/t Au, 0.14% Pb, 0.19% Zn | 7.87 Moz Ag, 5.60 koz Au, 9.1 Mlb Pb, 12.4 Mlb Zn |
| Indicated | 20.09 Mt | 81 g/t Ag, 0.06 g/t Au, 0.14% Pb, 0.19% Zn | 52.14 Moz Ag, 39.60 koz Au, 62.2 Mlb Pb, 84.6 Mlb Zn |
| Measured & Indicated | 23.02 Mt | 81 g/t Ag, 0.06 g/t Au, 0.14% Pb, 0.19% Zn | 60.02 Moz Ag, 45.20 koz Au, 71.3 Mlb Pb, 97.0 Mlb Zn |
| Inferred | 6.78 Mt | 79 g/t Ag, 0.05 g/t Au, 0.15% Pb, 0.17% Zn | 17.25 Moz Ag, 11.90 koz Au, 22.7 Mlb Pb, 25.5 Mlb Zn |
Our Analysis
- IRR after-tax
- 41%
higher than 59% of 22 projects we track
- NPV after-tax
- $763M
- Initial capex
- $332M
44% of NPV
- Payback
- 1.9yrs
- Mine life
- 14yrs
- Discount rate
- 5%
- Study price assumption
- Consensus: $50.00/oz Ag, $3,611/oz Au, $0.91/lb Pb, $1.25/lb Zn; Spot: $67.23/oz Ag, $4,210/oz Au, $0.91/lb Pb, $1.57/lb Zn
- Spot silver today
- $56.33/oz
A 41% after-tax IRR places this project in the upper half of our tracked silver peer group and well above the 15-20% threshold typical for financing single-asset juniors. The 5% discount rate used for NPV reporting is low, which inflates the headline $763M figure; a higher rate would compress it meaningfully. The NPV-to-market-cap ratio of roughly 8.4x is striking: it could signal the market has not yet priced in the asset's potential, or it could reflect skepticism around financing, permitting, or execution risk in Mexico’s Parral district—a jurisdiction with established mining history but requiring careful navigation.
Capital intensity is low at 44% of NPV, and the 1.9-year payback is fast, reducing near-term funding risk. However, the study’s $50/oz silver price assumption sits well below the current spot of $56.33/oz, implying upside if prices hold. The single most important risk is the financing gap: $332M initial capex is large relative to the company’s market cap, meaning significant dilution or debt is likely. Watch for the feasibility study’s funding plan and offtake arrangements.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.