Table 2: Economic Sensitivity Analysis - After-tax IRR, NPV and Payback Period

(Base case at $25 silver price is shown in bold below.)

Silver Price
      NPV @ 5%       NPV @ 10%       IRR %       Payback
        (millions)               (years)
$ 33 $ 796.6 $ 471.4 34.3 % 2.5
$ 31 $ 672.9 $ 384.2 29.9 % 2.9
$ 28 $ 487.2 $ 253.3 23.2 % 3.6
$ 25 $ 314.1 $ 130.1 16.8 % 5.3
$ 23 $ 177.1 $ 32.3 11.7 % 9.6
$ 21 $ 31.6 $ (71.4 ) 6.2 % 11.5
$ 19 $ (124.6 ) $ (183.2 ) 0.1 % 14.5
 

Capital Expenditures

Estimated capital expenditures are shown in the table below. Mobile mining equipment valued at $84 million is assumed to be leased and is not included in the estimated capital expenditures. The cost of leasing is $2.88 per ton ore processed and is included in operating costs. Sustaining capital expenditures are estimated to total $84.2 million over the initial 17-year mine life. The Company used a high level of design and engineering rigor for this PEA-level study with more than 50% of the capital equipment estimates supported by current price quotations.

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