Ausenco led the Feasibility Study for Discovery Silver’s Cordero Project in southern Chihuahua, Mexico, managing all consultants and overseeing the study process. Building on our previous work delivering the Pre-Feasibility Study (PFS), we brought a deep understanding of the project’s unique requirements. Our focus during the Feasibility Study was on optimising the design to reduce initial capital costs and enhance overall project economics compared to the PFS.
The Challenge
Discovery Silver’s Cordero Project is a greenfield open pit mine and processing plant project being developed 35 km north of Parral in southern Chihuahua, Mexico. Located in the heart of the Mexican Silver Belt, Cordero is among the world’s largest undeveloped silver projects, with a proposed LOM of 19 years. Ausenco served as lead consultant for the Feasibility Study (FS), with a specific focus on the processing plant, infrastructure and environmental improvements. By optimising the processing plant design using advanced metallurgical test work and other key improvements, we aimed to deliver more accurate Class 3 CAPEX and OPEX estimates—helping Discovery Silver attract greater investment to this high potential new operation.
The Better Way
Our teams from the Vancouver and Hermosillo offices worked in close collaboration on the Cordero FS, effectively leveraging local knowledge and relationships. Early engagement with contractors allowed for the development of more accurate construction cost estimates. This primary focus on the construction phase allowed engineers to see the benefits of design changes that were then optimized to be less capital intensive. Changes included replacing much of the plant’s steel construction with concrete to reduce materials costs.
Across the entire FS, our efforts were focused on identifying and implementing strategies to reduce both CAPEX and OPEX. Our teams consistently reviewed potential cost-saving measures, evaluating their feasibility and adjusting where necessary. Once confirmed, they were presented to the client for approval and incorporated into the final FS, adjusting the project’s CAPEX and OPEX.
Additionally, we supported Discovery Silver by providing engineering deliverables and timely responses to inquiries from the government of Mexico regarding the Environmental Impact Assessment.
The Outcome
Ausenco’s focus on CAPEX reduction strategies in both the construction and operational phases resulted in reductions in costs. Improvements made to the original PFS resulted in a reduction in CAPEX, an increase in Net Present Value (NPV) and a payback period of just over five years. An example is the $291 million expansion of the processing plant from 26,000 T/d to 51,000 T/d in Year 3, which will be funded by operating cash flow and result in a peak project NPV of $2.2 billion in Year 4.