Levon inching toward feasibility at Cordero

Tuesday, March 13, 2018

Levon Resources' 2018 PEA is a step forward for its mammoth Cordero silver project in Mexico, but further improvements are needed for the project to be viable at current metals prices.


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Cordero is one of the region's biggest undeveloped silver deposits, with total resources of 595Moz of the metal, according to Levon's latest estimate.

In addition, contained metal at the Chihuahua state asset includes 1.64Moz gold, 12.7Blb (5.76Mt) zinc and 5.63Blb lead.

Grades are low, at 12.8g/t silver in the indicated category, along with 0.37% zinc, 0.17% lead and 0.04g/t gold.

The resource, which is exposed at surface, is a porphyry type mineralization hosted by four intrusive and volcanic centers within a central part of the Cordero porphyry belt.


Vancouver-based Levon's PEA replaces a 2012 report, revised in 2013. It envisages an open pit operation and 40,000t/d throughput flotation plant, unchanged from the 2012 study, producing lead and zinc concentrates.

One major change is the 29-year mine life, compared to 15 years anticipated in 2012.

Output of 8Moz/y silver, 44,788t/t zinc, 31,158t/y lead and 11,900oz/y gold takes life-of-mine production to 231Moz, 2.86Blb zinc, 1.99Blb lead and 350,000oz gold.

Production is based on a 417Mt sub-set of Cordero's indicated and inferred resources, at a grade of 46.5g/t silver equivalent.

Initial capex is estimated at US$575mn, down from US$647mn in the previous report.


Despite higher production, Cordero continues to fall short of being an attractive development proposition at current prices.

The PEA indicates a 15.7% post-tax IRR, just enough to justify investment, but that figure is based on a US$20/oz silver price, compared to average February spot prices of US$16.66/oz in London.


Levon is mulling two main options for Cordero, to progress the project to prefeasibility or feasibility stage or bring in a strategic partner to advance the asset.

Either way, major improvements, or a big shift higher for silver prices, are needed to attract the significant investment needed for mine construction.

For now, Cordero, along with other major Mexican silver deposits such as Coeur Mining's La Preciosa and SSR Mining's Pitarrilla, looks set to remain firmly on the shelf.