Just riding MSV?Morgan still has MSV in his " spec pics "..
Minco Silver reached a number of very important milestones in 2007 while continuing to expand the Fuwan Silver Deposit.
In April, the company announced a 15% increase in the resources at Fuwan, upgrading 29.2 million ounces of silver to the indicated category, for a total indicated and inferred silver resource of 128.2 million ounces. Operating eight rigs on the property, Minco began infill drilling to increase the level of confidence in the resource and announced a second 43-101 estimate on December 11. The December estimate took into consideration 78 new holes, upgraded the indicated resource to 71.6 million ounces of silver, and increased the overall deposit by 14.7 million ounces for a total indicated and inferred silver resource of 142.9 million ounces.
In June of 2007, Minco contracted Process Research Associates (PRA) to perform metallurgical testing on representative mineralization from Fuwan. The study was released in September and resulted in overall recoveries for silver from lead and zinc concentrates of 97.9%. In addition, good results were obtained for other contained metals with recoveries of 97.9% for zinc, 94.0% for lead, and 77.4% for gold. These results were used by SRK Consulting in the preliminary economic assessment (PEA) initiated in June and completed in October.
Using the 128.2 million ounce silver resource announced in April, and excluding the proportionate ownership of the silver mineralization that lies within the Changkeng permit, the PEA completed by SRK Consulting concluded that the Fuwan Project is technically and economically viable as an underground mining operation with a capacity sufficient to support a processing rate of 2,500 tonnes per day with a 12-year mine life. Average annual silver production was estimated to be 4.9 million ounces with a cash cost of US$2.40 per ounce of silver after credits from other associated metals. Pre-production capital requirements were estimated at US$57 million with a payback period of 1.7 years from the start of production. The project generates an after-tax net present value (NPV) of US$113 million using an 8% annual discount rate and an after-tax internal rate of return (DCF-IRR) of 38%. More than 80% of the revenue from the project is derived from silver, and as such, the project is highly leveraged to silver price.
Minco Silver reached a third very important milestone in 2007 when it announced the receipt of a positive hydrology report in December. A hydrogeological review report completed by SRK Consulting concluded that, based on the available data from 18 hydrology holes, excessive water inflow would not be encountered during mine development and that the adjacent Xijiang River appears to be poorly connected hydraulically with the proposed underground mine envelope.
In 2008, Minco Silver will continue with its step-out drilling program in attempts to expand the deposit even further, begin the permitting process, initiate an international feasibility study, and start construction. Looking forward, mill startup is expected during the third or fourth quarter of 2009, with commercial production anticipated for the first quarter of 2010.