Perilya Ltd. (ASX:PEM) has announced the updated resource estimate at their Broken Hill Zinc-mine in Australia. The new reserve estimate stands at 11.7Mt at 11%ZnPb and the resources currently contain almost 22Mt at 16% ZnPb.
Broken Hill currently produces approximately 220M lbs Zinc-Lead, at a cash cost of $0.64/lbs of zinc net of by products. As the zinc price is relatively low, Perilya is dealing with low operating margins. We do however believe in the future of zinc and as Broken Hill offers a long mine life, we are keeping an eye on Perilya.
Perilya also owns the Cerro de Maimon copper project in the Dominican Republic, which produces approximately 22M lbspa Cu at a C1 cash cost of $0.63/lbs. As copper is currently trading well above the $3/lbs level, Cerro de Maimon brings in about $60M per annum in operational cash flow.
Disclosure: The author holds no position yet, but we are monitoring the story closely. Please see our disclaimer for current positions.