Canadian company Lundin Mining is to proceed with the zinc expansion project at Neves-Corvo mine in Portugal and seek the necessary approvals.
A feasibility study conducted by the company for the expansion project determined that following expansion, the annual zinc production from the mine will increase to 180,000t.
The average zinc production is expected to be around 150,000tpa between 2020 and 2030. In addition, the lead production is also set to increase.
Under the findings of the study, the pre-production capital costs are estimated to be €257m.
Lundin Mining president and CEO Paul Conibear said: "The results of the feasibility study on the zinc expansion project confirm strong project economics and demonstrate significant incremental value to our Neves-Corvo operations.
“The project will significantly increase metal production and further increases the mine's competitiveness to the continuing benefit of our shareholders, employees and the local economy.
“Early project activities are underway to facilitate a rapid start following permit approval, and, in the meantime, we continue with increased exploration efforts to find additional mineable copper and zinc mineralisation."
The feasibility study indicated an incremental post-tax net present value of €180m at an 8% discount rate, an internal rate of return of 22%, and an estimated payback period of less than four years from production start.
The company aims to maximise production from the existing zinc mineral reserve estimate and development of a deeper higher zinc grade area known as Lombador Phase 2.
The expansion project features the installation of a new underground crusher and conveyor system to handle ore from the Lombador orebody and upgrades to the existing hoisting shaft.
Alongside expanding the capacity of the zinc processing plant to 2.5Mtpa, the project seeks to expand the tailings management facility, as well as other site infrastructure.
Recently granted 'Project of National Interest' status, the expansion project is subject to approval of the environmental impact assessment (EIA) and amendments to the environmental licence.