The Preliminary Economic Assessment (“PEA”) for the Lagoa Salgada project demonstrates the potential viability of mining the Measured, Indicated and Inferred Mineral Resources of the North  and South Zone. The study is based upon the Company’s current Mineral Resource Estimate for the North and South Zone reported in the recently released National Instrument 43-101 Technical Report with an effective date of June 17 2021.

Highlights of the key project metrics are provided in the following table on a 100% basis:

Notes to Table:

The PEA was completed September 2021 by QUADRANTE, a multidisciplinary engineering and consulting company with more than 23 years of activity and projects completed in Europe, Africa and the Americas, and mine planning, design and engineering undertaken by IGAN INGENIERÍA, an independent consulting firm specializing in mine planning and engineering for open pit and underground mining projects and operations based in Spain.

The PEA is preliminary in nature, as it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the preliminary economic assessment will be realized.


The mine is designed using a single access ramp from surface and will target the extraction of ore from both the north and south zones at a rate of 2.0 million tonnes per annum.  The initial years will focus more highly on the north zone due to the higher grade profile with additional ore delivered from the south zone.

The proposed underground mine design incorporates a main decline, starting from the surface portal located close to the processing plant, which will be used to access the mine. This main access then splits into two independent declines , one for each mine zone (i.e., “North and South”).  The underground mine is planned to support the extraction of 2.0 million tonnes of ore per year (“Mtpa”) through a combination of transverse sublevel stoping and cut&fill. Paste backfill is used in both mining methods to maximize ore recovery and productivity.

The use of an independent decline for each orebody, instead of one decline serving both zones, was chosen to reduce the initial Capital Cost (“CAPEX”) considering that production starts earlier in the North zone.
A fleet of LHDs (“Load-Haul-Dump”) and trucks will be used for material loading and hauling from production areas to the orepass system. From the orepass collecting points, trucks will be hauling the ore to the surface. Waste is also transported to the surface by trucks.

A pre-production development program will be required to provide access to the initial stoping levels in the North zone during the first two years. Production will start in the second year, reaching the nominal plant feed in the fourth year.
Based upon the current resources available, the mine life is estimated at 14 years, however, this excludes any benefit of future exploration.  We note the North and South deposits remain open to depth and along strike, with additional satellite targets also available for future exploration.  Relative to other operations in the IPB Lagoa Salgada remains relatively shallow with significant room to grow over time.


Metallurgy and Processing

Metallurgical test work has been carried out by Grinding Solutions Ltd. (GSL) as outlined in the Press Release dated September 9, 2021. Studies were conducted on the massive sulphide material form the North zone, Stockwork material from the South zone and on blended ore as planned under the mine plan.  Results support that a conventional polymetallic process flowsheet capable of recovering coper, lead, zinc, gold and silver.  The flotation tailings will be leached for additional gold and silver values. The oxide ore can be leached to recover precious metals. Tin will be recovered from processing the tails material by flotation.
The projected recoveries and concentrate grades are presented in the table below are estimated for the project based on recent test results and the extensive experience working with polymetallic ores in the IPB. Additional testing is planned to as the project moves towards feasibility. 



Lagoa Salgada is well situated to benefit from the well-established regional infrastructure to support mine development with access to skilled labour, roads, ports and the national electrical grid.  Lagoa Salgada is situated in southern Portugal about 100km south west of Lisbon, in close proximity to the town of Grândola, and is currently accessed via paved roads to Cilha do Pascoal, followed by 4 km of gravel roads to the mine site.

The site will require an office, changeroom, shop and warehouse as well as storage for fuel, laydown areas, site fencing, and a security building. An allowance for a total of 2,600 m2 of building space has been included in the PEA.

The anticipated direct infrastructure for the Project includes an electrical substation, paste plant, equipment maintenance workshop, refueling facilities, assay laboratory, office administration facilities and changing rooms, among others.

The tailings and waste rock disposal concepts were developed in full compliance with the most current standards for sustainable tailings management, including consideration of Best Available Practices (BAT) and Technologies. The method considered in the PEA includes co-disposal of filtered tailings and mine waste rock, in addition to the novel implementation of Geotubes for additional risk reduction for the dry-stacked tailings.


Operating Costs

The PEA contemplates an underground mine from which mineralized material will be trucked to a conventional IPB crushing, grinding and floatation concentration plant located close to the main portal.
The operating costs were estimated using external databases, refined with benchmark costs from operations on the IPB. These costs were scaled to the estimated production rates and to the labor costs in Portugal. LOM operating costs are summarized in the table below:


Average unit mining costs of $19.13/tonne were estimated based on the proposed mine plan, local cost benchmarking and experience from similar operations in other operating mines in the IPB and local conditions. It is envisaged that the mining operations will be carried out by a contractor.

Average processing costs of $15.89/tonne were estimated based on the design process flowsheet and considered process labour requirements and rates, as well as calculated consumption rates of reagents, consumables, electricity, and maintenance.

 Capital Costs

Up front capital costs are estimated at $132 million, inclusive of a 10% contingency and closure costs.  Up front capital costs have been minimized via a staged build out of certain life of mine infrastructure such as the tailing dam, paste backfill and a ramp up in the mine fleet as needed by production.  Sustaining capital over the life of mine is estimated at $102MM million.

The accuracy range for the capital costs is expected to be ±35% which is consistent with industry standards for a PEA. All costs are expressed in 2021 US$ and uses an exchange rate EUR:US$ of 1.2 where applicable.  A summary of the Lagoa Salgada capital cost estimates is shown in the table below:


Project Economics

The project shows robust economic results with a pre-tax NPV at 8% of $341.6 million and an IRR of 68.2%, and an after tax NPV at 8% of $246.7 million and IRR of 55%.

Project economics are based on a 14-year mine life with a 1.5-year payback period.

Exploration and Geological Potential Update

Current geological understanding suggests that the original spatial breakdown of the Venda Nova deposit at Lagoa Salgada into the North, Central and South deposits was arbitrary. This segmentation is due to the drilling pattern. Ascendant believes that mineralization continuity gaps are probably related to varying strike, dip, and plunge along the system further systematic drilling may prove that the known sectors are likely to coalesce into a continuous zinc-lead-copper VMS system, displaying local variation of mineralization styles and tenors: from secondary gossan to primary massive sulphide ending with peripheral primary/secondary stringer/fissure type mineralization. This interpretation is backed by continuity of the geophysical footprint.

Notably the current northern edge of the southern zone, that shows a North-Northwest plunge shows a significant increase in gold tenors. This zone warrants systematic drilling as it could reflect deeper stringer levels that can carry high precious metal grades. Surface and Borehole 3D Models show that all three Venda Nova deposits lie on continuous, coincidental Resistivity (Low) and Chargeability (High) anomalies with an estimated geological strike length of 1.7 km. Anomalies extend in a SSE to NNW direction from the South deposit to beyond the North deposit and terminating against the Alpine fault. Combined drilling and geophysical results indicate that the mineralization remains open beyond the current limits of drilling, along strike in both directions and down plunge/dip. 

The known footprint of the large continuous system is constrained vertically by the depth of penetration of the IP/Res system, ~ 350 m. A deep penetrating Electro Magnetic (DEPM) survey will be completed in Q4 2021 aiming to image the roots of the IP/Res anomalies and test the existence of high-grade massive sulphide lenses below the current threshold of the geophysical footprint (350 m below surface)
Ascendant firmly believes that the large proven footprint of the Lagoa Salgada VMS system suggests high potential exploration upside at the property. Given the size of the system it is probable that the exhalative system recognized at Lagoa Salgada is associated with fertile deep-rooted fractures that may be related to additional stacked or lateral mineralized lenses.