The Project includes a 14-year open-pit silver project delivering strong economics, a rapid 1.9 year payback, and a 63.7-million-ounce payable silver production profile with significant exploration upside remaining along a 9-kilometre mineralized trend.
VANCOUVER, BC, June 15, 2026 /PRNewswire/ – Kootenay Silver Inc. (the “Company” or “Kootenay”) (TSXV: KTN) (OTCQX: KOOYF) is pleased to announce the results of a positive Preliminary Economic Assessment (“PEA”)i for its 100%-owned La Cigarra Silver Project (“La Cigarra” or the “Project”) in Chihuahua, Mexico.
The La Cigarra Project is situated within the well-established Parral Mining District of Chihuahua State, Mexico), which hosts two nearby mining operations, the Santa Barbara Mine and the San Francisco Del Oro Mine. Both mines are active silver producers located approximately 20–30 kilometres to the south of La Cigarra along the same mineralized trend and are actively mining to depths of up to 2,000 kilometres deep. Together, these two operations produced 440 million ounces of silver from 1650 to 1988 (Grant and Ruiz, 1988) with both operations still in production today. Readers are cautioned that the information disclosed from adjacent properties is not necessarily indicative to the mineralization on the Project that is the subject of this disclosure.
Key Highlights of the PEA
All monetary values are in U.S. dollars unless otherwise noted.
Project Economics
- After-tax net present value at consensus metal pricesii (5% discount rate): $763 million
- After-tax internal rate of return (IRR): 41%
- After-tax net present value at spot metal pricesiii (5% discount rate): $1,295 million and IRR of 64%
Capital and Cost Structure
- Initial capital cost: $332 million
- Sustaining capital cost: $80 million
- Payback period: 1.9 years (after tax)
- Study life-of-mine (LOM): 14 years
Production Profile
- Average annual silver production over Years 1–5: 6.22 million ounces.
- Average LOM annual payable silver production: 4.55 million ounces
- LOM payable-silver production: 63.6 million ounces
- Average annual after-tax revenue: $107 million per year.
- Average all-in sustaining cost: $18.73/oz Ag
- Processing rate: 6,000 tonnes per day
- Average silver recovery: 89.3%
Management Commentary
James McDonald, President and CEO of Kootenay Silver, said:
“The Preliminary Economic Assessment marks a significant milestone in advancing La Cigarra toward development. The 14-year mine life, strong annual production, and IRR demonstrate the potential for a long-life silver operation in one of Mexico’s premier mining districts, a district that has been producing for nearly 500 years. We believe the combination of attractive economics, substantial resource-growth potential, existing infrastructure, and strong silver market fundamentals, positions La Cigarra as a compelling development asset, significantly adding value to the stakeholders in the region.”
Ken Berry, Chairman of Kootenay Silver, added:
“This study validates our strategy of advancing our portfolio of silver assets through the development pipeline. With La Cigarra now supported by a positive PEA, we are evaluating the next steps to unlock additional value through resource expansion, engineering optimization, and advancement toward permitting and feasibility engineering.”
Cautionary Statement Regarding the PEA
The PEA is preliminary in nature and 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. Inferred Mineral Resources have a lower level of confidence than that applied to Measured and Indicated Mineral Resources and there is no certainty that Inferred Mineral Resources will be converted to Measured or Indicated Mineral Resources through further exploration. There is no certainty that the results of the PEA will be realized.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Project does not contain any Mineral Reserves and the economic analysis contained in the PEA is based on Mineral Resources, including Inferred Mineral Resources and there is no certainty that Mineral Resources will be converted into Mineral Reserves.
PEA Inputs
The following tables outline various operation and capital cost inputs, production details including ounces of silver and gold produced and pounds of lead and zinc produced, mining rate, tonnes mined, strip ratio, metal recovery factors, total cash cost for silver, all in sustaining cost for silver long term price assumptions for silver, gold, lead and zinc, tax inputs, EBITA, pre and post-tax for net present values, internal rate of return, free cash flow, and payback period.
| Description | Unit | LOM Total / Average |
|---|---|---|
| General assumptions | ||
| Silver price | US$/oz | 50.0 |
| Gold price | US$/oz | 3,611.0 |
| Lead price | US$/lb | 0.91 |
| Zinc price | US$/lb | 1.25 |
| Discount rate | % | 5.00 |
| Production | ||
| Total payable silver | koz | 63,663.9 |
| Total payable gold | koz | 27.3 |
| Total payable lead | Mlb | 45.3 |
| Total payable zinc | Mlb | 48.5 |
| Operating costs | ||
| Mining cost | US$/t mined | 2.11 |
| Processing cost | US$/t processed | 9.49 |
| Site G&A cost | US$/t processed | 3.50 |
| Operating cash cost | US$/oz AgEq | 16.85 |
| AISC | US$/oz AgEq | 18.73 |
| Capital costs | ||
| Initial capital (incl. closure) | US$M | 332.2 |
| Sustaining capital | US$M | 79.7 |
| Economics | ||
| Net revenue | US$M | 3,326.3 |
| EBITDA | US$M | 2,342.1 |
| Pre-tax free cashflow | US$M | 1,897.0 |
| Pre-tax NPV (5%) | US$M | 1,265.0 |
| Pre-tax IRR | % | 55% |
| Pre-tax payback | years | 1.7 |
| Post-tax free cashflow | US$M | 1,166.0 |
| Post-tax NPV (5%) | US$M | 762.7 |
| Post-tax IRR | % | 41% |
| Post-tax payback | years | 1.9 |
Table of production details in the PEA
| Metric | Unit | Base Case |
|---|---|---|
| Mine life | years | 14 |
| Plant throughput | t/d | 6,000 |
| Total material mined | Mt | 273.1 |
| Total material processed | Mt | 30.4 |
| Oxide material processed | Mt | 5.8 |
| Sulphide material processed | Mt | 24.6 |
| Average strip ratio | t:t | 8.0 |
| Average Ag head grade | g/t | 78.66 |
| Average Au head grade | g/t | 0.06 |
| Average Pb head grade | % | 0.13% |
| Average Zn head grade | % | 0.18% |
| Total payable Ag in doré | koz | 20,873.7 |
| Total payable Au in doré | koz | 6.8 |
| Total payable Ag in concentrates | koz | 42,790.2 |
| Total payable Au in concentrates | koz | 20.6 |
| Total payable Pb | Mlb | 45.3 |
| Total payable Zn | Mlb | 48.5 |
| Total payable AgEq | koz AgEq | 67,674.4 |
Table of capital cost inputs
| Capital Cost Item | Unit | Base Case |
|---|---|---|
| Mining capital | US$M | 7.9 |
| Processing capital | US$M | 122.6 |
| Tailings and water management | US$M | 12.4 |
| Site infrastructure | US$M | 57.8 |
| Indirect costs / EPCM / owner’s costs | US$M | 73.3 |
| Contingency | US$M | 54.4 |
| Closure and reclamation deposit | US$M | 3.7 |
| Total initial capital | US$M | 332.2 |
| Sustaining capital | US$M | 79.7 |
| Closure and reclamation | US$M | -33.2 |
| Total LOM capital | US$M | 378.6 |
Table of operating cost inputs.
| Operating Cost Item | Unit | Base Case |
|---|---|---|
| Mining cost | US$/t mined or moved | $2.11 |
| Rehandle cost | US$/t rehandled | $2.11 |
| Oxide processing cost | US$/t processed | $9.49 |
| Sulphide processing cost | US$/t processed | $9.49 |
| Mixed/campaign processing cost | US$/t processed | $9.49 |
| G & A | US$/t | $3.50 |
| Total site operating cost | US$/t processed | $32.41 |
| Operating cash cost | US$/oz Ag payable | $16.85 |
| AISC | US$/oz Ag payable | $18.75 |
Table of tax inputs
| Item | Unit | Base Case |
|---|---|---|
| Income Tax | % | 30.0 |
| Mining Royalty Tax (EBITDA) | % | 8.5 |
| Precious Metal Royalty Tax (Au–Ag NSR) | % | 1.0 |
| Total Income Tax and Royalty Incurred | US$M | 731.0 |
| Total LOM Royalties | US$M | 231.3 |
Table of revenue source by metal
| Revenue Source | Net Revenue Contribution |
|---|---|
| Silver | 94.1% |
| Gold | 2.9% |
| Lead | 1.2% |
| Zinc | 1.8% |
| Total | 100.0% |
Project Overview
La Cigarra is approximately 26 kilometers from the historic mining city of Parral, and benefits from strong existing infrastructure, including road access, nearby power, and a skilled local workforce.
The updated Project Mineral Resource estimate (“MRE”) (Table 1) forms the basis of the PEA.
Highlights of the Project MRE are as follows:
- Measured + Indicated Mineral Resources are estimated at 23.02 Mt grading 81 g/t Ag, 0.06 g/t Au, 0.14% Pb, and 0.19% Zn (93 g/t AgEq). The Measured + Indicated MRE includes 60.02 Moz Ag, 45.2 koz Au, 71.3 Mlb Pb, and 97.0 Mlb Zn (69.02 Moz AgEq).
- Inferred Mineral Resources are estimated at 6.78 Mt grading 79 g/t Ag, 0.05 g/t Au, 0.15% Pb, and 0.17% Zn (90 g/t AgEq). The Inferred MRE includes 17.25 Moz Ag, 11.90 koz Au, 22.7 Mlb Pb, and 25.5 Mlb Zn (19.72 Moz AgEq).
Table 1: La Cigarra Deposit Mineral Resource Estimate, April 4, 2026
| Resource Class | Tonnes (Mt) | Grade | Total Metal | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Ag (g/t) | Au (g/t) | Pb (%) | Zn (%) | AgEq (g/t) | Ag (Moz) | Au (koz) | Pb (Mlb) | Zn (Mlb) | AgEq (Moz) | ||
| Measured | 2.93 | 84 | 0.06 | 0.14 | 0.19 | 96 | 7.87 | 5.60 | 9.1 | 12.4 | 9.01 |
| Indicated | 20.09 | 81 | 0.06 | 0.14 | 0.19 | 93 | 52.14 | 39.60 | 62.2 | 84.6 | 60.01 |
| Measured + Indicated | 23.02 | 81 | 0.06 | 0.14 | 0.19 | 93 | 60.02 | 45.20 | 71.3 | 97.0 | 69.02 |
| Inferred | 6.78 | 79 | 0.05 | 0.15 | 0.17 | 90 | 17.25 | 11.90 | 22.7 | 25.5 | 19.72 |
- The classification of the current MRE into Measured, Indicated, and Inferred is consistent with current CIM Definition Standards for Mineral Resources and Mineral Reserves (CIM, 2014).
- All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not add due to rounding.
- Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that most Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
- The La Cigarra deposit is envisioned to be mined using open-pit methods. Mineral Resources are reported at a base-case cut-off grade of 30 g/t AgEq, constrained within optimized pit shells, below topography, and within defined mineralized domains.
- Pit optimization results are used solely to demonstrate reasonable prospects for economic extraction and do not represent Mineral Reserves. There are no Mineral Reserves on the property.
- Mineral Resources are presented undiluted and in situ, constrained by continuous 3D wireframe models, and considered to have reasonable prospects for eventual economic extraction at the base-case cut-off grade of 30 g/t AgEq.
- The base-case AgEq cut-off grade assumes metal prices of $36.00/oz Ag, $3,600/oz Au, $0.91/lb Pb, and $1.23/lb Zn, with recoveries of: oxide—88.3% Ag, 37.5% Au; sulphide—89.3% Ag, 61.8% Au, 70.0% Pb, and 59.1% Zn.
- The base-case cut-off grade of 30 g/t AgEq assumes mining costs of $2.00/t mined, and processing, treatment, refining, G&A, and transportation costs of $23.23/t (oxide) and $22.33/t (sulphide).
- The Mineral Resource estimate may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant factors.
The updated Project in-pit MRE at various cut-off grades is presented in Table 2.
Table 2: In-Pit Mineral Resource Estimate at Various AgEq Cut-off Grades, April 4, 2026
| Class | Cut-Off (g/t) | Tonnes (M) | Ag (g/t) | Au (g/t) | Pb (%) | Zn (%) | AgEq (g/t) | Ag (Moz) | Au (koz) | Pb (Mlb) | Zn (Mlb) | AgEq (Moz) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Measured | 20 | 3.14 | 79 | 0.06 | 0.13 | 0.18 | 91 | 8.02 | 5.80 | 9.3 | 12.7 | 9.19 |
| 30 | 2.93 | 84 | 0.06 | 0.14 | 0.19 | 96 | 7.87 | 5.60 | 9.1 | 12.4 | 9.01 | |
| 40 | 2.53 | 92 | 0.06 | 0.15 | 0.20 | 105 | 7.52 | 5.10 | 8.5 | 11.4 | 8.56 | |
| 50 | 2.11 | 104 | 0.06 | 0.17 | 0.22 | 117 | 7.03 | 4.40 | 7.8 | 10.2 | 7.95 | |
| 60 | 1.75 | 116 | 0.07 | 0.18 | 0.23 | 130 | 6.51 | 3.70 | 7.1 | 9.1 | 7.32 | |
| 70 | 1.45 | 129 | 0.07 | 0.19 | 0.25 | 143 | 6.01 | 3.10 | 6.2 | 7.9 | 6.70 | |
| 80 | 1.23 | 141 | 0.07 | 0.21 | 0.25 | 156 | 5.56 | 2.60 | 5.6 | 6.9 | 6.16 | |
| Indicated | 20 | 21.52 | 77 | 0.06 | 0.14 | 0.18 | 88 | 53.04 | 41.30 | 64.4 | 87.3 | 61.21 |
| 30 | 20.09 | 81 | 0.06 | 0.14 | 0.19 | 93 | 52.14 | 39.60 | 62.2 | 84.6 | 60.01 | |
| 40 | 17.26 | 89 | 0.06 | 0.15 | 0.21 | 102 | 49.61 | 35.60 | 57.6 | 78.3 | 56.81 | |
| 50 | 14.46 | 100 | 0.07 | 0.16 | 0.22 | 114 | 46.36 | 31.10 | 52.3 | 70.4 | 52.76 | |
| 60 | 12.14 | 110 | 0.07 | 0.18 | 0.23 | 125 | 43.01 | 26.80 | 47.2 | 62.7 | 48.66 | |
| 70 | 10.06 | 122 | 0.07 | 0.19 | 0.25 | 137 | 39.44 | 22.80 | 41.5 | 55.1 | 44.34 | |
| 80 | 8.40 | 134 | 0.07 | 0.20 | 0.26 | 149 | 36.10 | 19.40 | 36.6 | 47.8 | 40.33 | |
| Inferred | 20 | 7.25 | 75 | 0.05 | 0.15 | 0.16 | 86 | 17.54 | 12.60 | 23.6 | 26.3 | 20.12 |
| 30 | 6.78 | 79 | 0.05 | 0.15 | 0.17 | 90 | 17.25 | 11.90 | 22.7 | 25.5 | 19.72 | |
| 40 | 5.95 | 86 | 0.05 | 0.16 | 0.18 | 98 | 16.56 | 10.20 | 21.1 | 23.8 | 18.78 | |
| 50 | 4.87 | 98 | 0.05 | 0.18 | 0.20 | 110 | 15.29 | 8.20 | 19.1 | 21.3 | 17.21 | |
| 60 | 4.00 | 109 | 0.05 | 0.19 | 0.22 | 122 | 14.01 | 6.90 | 16.6 | 19.4 | 15.69 | |
| 70 | 3.23 | 122 | 0.05 | 0.21 | 0.24 | 135 | 12.64 | 5.60 | 14.7 | 17.3 | 14.09 | |
| 80 | 2.64 | 135 | 0.05 | 0.22 | 0.26 | 149 | 11.43 | 4.50 | 12.9 | 15.1 | 12.66 |
- Values in these tables reported above and below the base-case cut-off grades for in-pit MREs should not be mistaken for a Mineral Resource statement. The values are presented solely to show the sensitivity of the block model estimates to the selection of the base-case cut-off grade (highlighted).
- All values are rounded to reflect the relative accuracy of the estimate, and numbers may not add due to rounding.
In addition to silver, the deposit contains gold, lead, and zinc credits that contribute to Project economics and provides additional optionality as engineering work advances.
Development Plan
The PEA contemplates developing:
- Conventional open-pit mining
- Crushing and grinding circuits
- Flotation and leaching process plant
- Tailings and rock management facilities
- Mine infrastructure and support facilities
- Progressive mine development over a 14-year operating life.
The Project also remains open for expansion along strike and at depth, with mineralization traced over a broader 9-kilometre trend that supports further exploration upside.
Upside Opportunities
The Company has identified several opportunities to further enhance Project value, including:
- Resource expansion drilling along strike and at depth
- Conversion of Inferred Mineral Resources to higher-confidence categories
- Evaluation and conversion of satellite and extension mineralized zones
- Metallurgical optimization studies
- Mine plan optimization and staged development alternatives.
Next Steps
Following completion of the PEA, Kootenay intends to:
- Initiate additional resource expansion drilling
- Advance environmental baseline studies
- Conduct geotechnical and hydrogeological investigations
- Evaluate opportunities for a Feasibility Study
- Continue stakeholder engagement and permitting activities.
Technical Report
The full National Instrument 43-101 (“NI 43-101”) Standards of Disclosure for Mineral Projects Technical Report supporting the PEA will be filed on SEDAR+ within 45 days of this news release and will also be available on the Company’s website.
Qualified Persons
The Kootenay technical information in this news release for the PEA has been prepared in accordance with the Canadian regulatory requirements and reviewed and approved on Kootenay’s behalf by consultants who are independent, and each of whom is a Qualified Person (“QP”) as defined by NI 43-101. The following acted as authors of the PEA:
- Shervin Teymouri (P.Eng.), Sacré-Davey Engineering Inc.
- Marinus André de Ruijter (P.Eng.), Sacré-Davey Engineering Inc.
- Allan Armitage (PhD. P.Geo.), SGS Canada Inc. Geological Services
- Antonio Loschiavo (P.Eng.), AKF Mining Services Inc.
- Stacy Freudigmann (P.Eng. F.AusIMM.), Canenco Consulting Corp.
- Craig Hall (P.Eng.), Knight Piésold Ltd.
Mr. Dale Brittliffe (BSc., P. Geol.), Vice President, Exploration, of Kootenay Silver, is the Company’s QP under NI 43-101, and has reviewed and approved, the scientific and technical content in this press release.
About Kootenay Silver Inc.
Kootenay Silver Inc. is an exploration company actively engaged in the discovery and development of mineral projects in the Sierra Madre region of Mexico. Supported by one of the largest junior portfolios of silver assets in Mexico, Kootenay continues to provide its shareholders with significant leverage to silver prices. The Company remains focused on the expansion of its current silver resources, new discoveries, and the near-term economic development of its priority silver projects in prolific mining districts in Sonora State and Chihuahua State, respectively.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This news release contains “forward looking information” and “forward-looking statements”, within the meaning of applicable Canadian securities legislation (collectively, “forward-looking statements”). All statements other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as of the date of this news release.
Forward-looking statements in this news release include, without limitation, statements regarding: the results of the Preliminary Economic Assessment (“PEA”); projected economics of the La Cigarra Silver Project (the “Project”), including net present value, internal rate of return, payback period, capital costs, operating costs, cash costs, all-in sustaining costs, production rates, mine life, processing rates, recoveries and revenues; the potential development of the Project; future resource growth and conversion; opportunities to enhance Project economics; future exploration, drilling, engineering, metallurgical, environmental, geotechnical and hydrogeological programs; advancement of the Project toward a pre-feasibility study, feasibility study, permitting and potential construction; the timing of future technical studies; the future price of silver, gold, lead and zinc; and the Company’s future plans, objectives and strategies.
Forward-looking statements are based upon a number of assumptions considered reasonable by management at the time such statements are made, including, but not limited to: the accuracy of the current Mineral Resource Estimate; the assumptions and methodologies used in the PEA; the achievement of projected production, operating and capital cost estimates; assumed metal prices, exchange rates and tax regimes; the availability of financing on acceptable terms; the ability to obtain required permits, licences and approvals in a timely manner; the availability of equipment, labour, contractors and supplies; the realization of anticipated metallurgical recoveries; and general business, economic and market conditions.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. Such factors include, among others: fluctuations in commodity prices; changes in capital and operating cost estimates; changes in project parameters as plans continue to be refined; risks related to Mineral Resource estimation; risks associated with the inclusion of Inferred Mineral Resources in the PEA; uncertainty of future exploration results; uncertainty of obtaining permits, licences and regulatory approvals; environmental and social risks; taxation changes; political and economic developments in Mexico; labour shortages; inflationary pressures; financing risks; foreign exchange risks; title risks; and other risks disclosed in the Company’s public disclosure record available on SEDAR+.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct, and readers should not place undue reliance on forward-looking statements. Forward-looking statements are made as of the date hereof and except as otherwise required by law, Kootenay expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in Kootenay’s expectations or any change in events, conditions or circumstances on which any such statement is based.
Cautionary Note to US Investors: This news release includes Mineral Reserves and Mineral Resources classification terms that comply with reporting standards in Canada and the Mineral Reserves and the Mineral Resources estimates are made in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ significantly from the requirements adopted by the U.S. Securities and Exchange Commission (the “SEC”). The SEC sets rules that are applicable to domestic United States reporting companies. Consequently, Mineral Reserves and Mineral Resources information included in this news release is not comparable to similar information that would generally be disclosed by domestic U.S. reporting companies subject to the reporting and disclosure requirements of the SEC. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companies that report in accordance with U.S. standards.
Reference
Grant, G. J., & Ruiz, J. (1988). The Pb-Zn-Cu-Ag deposits of the Granadena Mine, San Francisco del Oro-Santa Barbara District, Chihuahua. Economic Geology, 83, 1683–1702.
i Prepared by Sacré-Davey Engineering Inc. and Canenco Consulting Corp., the PEA evaluates an open-pit mine and conventional processing facility at La Cigarra.
ii Consensus metal prices of $50.00/oz Ag, $3,611/oz Au, $0.91/lb Pb, and $1.25/lb Zn.
iii Spot metal prices of $67.23/oz Ag, $4,210/oz Au, $0.91/lb Pb, and $1.57/lb Zn.
Source: Kootenay Silver Inc.
Original Press Release: https://www.prnewswire.com/news-releases/kootenay-silver-announces-positive-pea-with-a-us763-million-after-tax-npv–41-irr-for-la-cigarra-silver-project-302800440.html
