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noRtH AMeRIcA

BMC measures First Nations people were involved with
setting up the new camp accommodation at
KZK during the Yukon spring of 2020
approach in Yukon

us in good stead,” Donaldson said.
Donaldson’s conviction in the project has
meant top talent has also flowed into BMC.
Former Trevali Mining Corp chief financial
officer Gerbrand van Heerden has crossed
over to join BMC, while Joel Ray – most re-
cently senior manager operational delivery
at Syama in Mali with Resolute Mining Ltd
– has taken the reins as chief mining engi-
neer for the development of the ABM mine
at KZK.
As development discussions gather pace,
a source of funding for KZK will need to
be organised and there appears to be op-
tions aplenty, with silver on a tear this year
($US25-26/oz) and zinc rallying to a six-
month high ($US1.14c/lb) at the time of print.
“I think one of the beauties of a project like
this is it can be financed in many ways. The
strong precious metals credits give you the
ability to do something with precious metals
financing-based groups and of course there
is always traditional debt and equity,” Don-
ix years ago, the old firm from Jabiru $US375 million is anticipated for construc- aldson said.
SMetals started on a course to find its next tion of a concentrate metal-producing pro- “Streaming is one of the options, we have
perfect match. ject of 7.8 mozpa silver, 106,800 tpa zinc, received pretty strong interest from potential
Jabiru was subject to a $531 million takeo- 14,400 tpa copper, 25,300 tpa lead and buyers of our concentrate. We have some
ver from Independence Group NL (now IGO 56,500 ozpa gold. interest in helping us build the project from
Ltd) in mid-2011, with the Jaguar copper- Based on the numbers above, a NPV of lenders and non-traditional lenders, so we
zinc-silver mine and Stockman copper-zinc $US617 million, IRR of 45.9%, operating have many levers we can pull but I don’t think
project central to the deal. cashflow margin of 43% and cash cost of we’ll need to pull all of them.”
Given the success with Jabiru, it is no silver production after by-product credits of Meanwhile, taking BMC into the public
surprise that some of the key players behind $US22.13/oz were guided in an updated fea- domain is something else being weighed up.
BMC Minerals – Gary Comb (chairman), sibility study released in November. “That is definitely something we are con-
Scott Donaldson (chief executive and ex- “When we went looking for mining pro- sidering; a Canadian asset with an Austral-
ecutive director) and Neil Martin (executive jects around the world six years ago, we ian executive management team; either
director, exploration and development) – are were looking for base metals projects that Canada or Australia would be a good fit,”
knee-deep in the Kudz Ze Kayah (KZK) pro- had very high precious metals credits. As Donaldson said.
ject, south central Yukon, Canada. base metals projects go, this is a very unique
It was timely that Paydirt caught up with project with silver and zinc being the two – Mark Andrews
Donaldson last month, as the Government dominant metals of this project; it is a perfect
had just backed the development of KZK, natural hedge,” Donaldson said.
subject to 30 recommendations. “One of the things that makes this project
Donaldson said the recommendations unique is it’s 50% precious metals and 50%
were all sensible and that the company was base metals, which is almost the perfect mix.
in the process of reviewing them in parallel Silver is now the dominant metal contributing
with restating a DFS from June 2019. over 30% net revenue and zinc will be just
“A lot of things have come together at the under 30%.”
right time for us, we have got the positive rec- Initially, KZK is a 2 mtpa, nine-year propo-
ommendation that the mine should proceed, sition for BMC, which has over 3,500 min-
subject to 30 issues, and we have got the re- eral claims in a region of Yukon experiencing
stated DFS which we are putting together to high unemployment rates.
take into account the timelines going forward Donaldson said there was exploration up-
and things we have been able to complete side to consider at KZK, but the near-term An environmental and socio-economic
over the last 15 months,” Donaldson said. focus is on bringing the mine to life in the review of the BMC’s mining proposal for the
“We will be appointing advisors shortly second half of 2023 and achieving first sales ABM silver-zinc mine has been completed
and we will start the financing process in shortly thereafter. by the Yukon Environmental and Socio-
2021. That will run in parallel with the final “There are only four projects in the world Economic Assessment Board (YESAB), with
permitting process.” that boast a top 20 silver mine and top 20 the outcome recommending that the mine
A pre-production capital cost of about zinc mine by production; we think KZK holds be allowed to proceed to permitting

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