La Negra Mine PEA: $329M NPV, 131% IRR
Silverco Mining Inc.'s La Negra Mine in Querétaro, Mexico has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $329M, an after-tax IRR of 131%, and initial capital of $21M. The mine plan runs 8.2 years at about 4.1 Moz AgEq per year.
Silverco Mining Inc.'s La Negra Mine has reported Preliminary Economic Assessment (PEA) results for the silver project in Querétaro, Mexico. The study headlines an after-tax net present value of $329M at a 5% discount rate. It reflects Silverco Mining Inc.'s (SICO.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is $329M using a 5% discount rate. After-tax IRR is 131%. Initial capital expenditure is estimated at $21M. The study models a payback period of 2 years. All-in sustaining costs are pegged at 24.86 USD/oz AgEq. Economics are based on Base Case Metal Prices $50.00/oz Ag, $4.50/lb Cu, $0.88/lb Pb, $1.30/lb Zn.
Production and mine plan. The project envisions an underground operation. Life of mine is 8.2 years. Average annual production is approximately 4.1 Moz AgEq.
Resources and ownership. The company holds a 100% interest in the project.
These figures are extracted from Silverco Mining 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 |
|---|---|---|---|
| Indicated | 15.23 Mt | 106 g/t Ag, 201 g/t AgEq | 98,200 koz AgEq (51,900 koz Ag) |
| Inferred | 2.26 Mt | 92 g/t Ag, 174 g/t AgEq | 12,600 koz AgEq (6,720 koz Ag) |
Our Analysis
- IRR after-tax
- 131%
higher than 96% of 27 projects we track
- NPV after-tax
- $329M
higher than 29% of 34 projects we track
- Initial capex
- $21M
6% of NPV
costlier than 29% of 34 projects we track
- Payback
- 2yrs
slower than 62% of 16 projects we track
- Mine life
- 8.2yrs
- Discount rate
- 5%
- Study price assumption
- Base Case Metal Prices $50.00/oz Ag, $4.50/lb Cu, $0.88/lb Pb, $1.30/lb Zn
- Spot silver today
- $61.45/oz
A 131% after-tax IRR on a $21M initial build is the kind of pairing that rarely survives contact with a mine plan, so the first job is to work out which half of it is real. The return ranks above 96% of the 27 silver projects we track, top decile, and the capital requirement is lower than 71% of the 34 we track. Against the roughly 15% after-tax hurdle developers typically need to attract project finance, that is a wide margin. The company is not a single-asset vehicle dependent on this outcome: it carries a US$352M market cap and this is one of six projects we track for it, so the build cost is small next to its equity value. Funding risk, usually the thing that kills projects with numbers like these, is genuinely modest here.
The catch is what the numbers are built on. This is a PEA, scoping-level work that can lean on inferred material and carries a capital estimate with a plus or minus 50% band. An 8.2-year mine life is short: there is little room for a slow ramp or a bad year, and the after-tax NPV of $329M ranks above only 29% of the 34 silver projects we track, which sits oddly beside a top-decile IRR. That gap is the tell. The percentage return is doing the work, not the absolute dollars, and a short life on a preliminary study is exactly where that happens.
Two further points. Querétaro is a mining-friendly jurisdiction, which supports taking the numbers at face value rather than discounting them for political risk. And the study assumes $50.00/oz silver against a live spot of $61.45/oz, so the economics are not stretched on price. The question that decides this: can a scoping-level, eight-year plan be converted into a permitted, financed mine without the capital estimate moving enough to erase the return?
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.
Get the next one first
Be the first to know about new mining results, and how they compare to other projects.