PEA Report For The Cordero Project

VANCOUVER, BC - Levon Resources Ltd has filed a National Instrument (NI) 43-101 Technical Report prepared by M3 Engineering & Technology (M3) in collaboration with Independent Mining Consultants (IMC) of Tucson, Arizona. It provides the 2018 resource update (IMC) and a Preliminary Economic Assessment Update (PEA Update) (M3) for the Cordero Silver, Zinc, Lead, Gold Project in Chihuahua, Mexico.

A sub-set of the indicated and inferred mineral resource was used to develop an open pit mining plan at a rate of 40,000 tonnes of mill feed per day, with flotation processing to create high-quality lead and zinc concentrates. This mining rate is identical to the mining rate in the 2013 PEA update. Mineral concentrates will be sold to offshore smelters.

Average annual production of 8 million ounces of silver, 44,788 tonnes of zinc (99 million lbs) in concentrate, 31,158 tonnes of lead (69 million lbs) in concentrate and 11,900 ounces of gold. Economic analysis for the updated study are based on $20/oz silver, $1.30/lb zinc, $1.00 lead, and $1,300/ oz gold.

The updated mine plan for the updated 2018 PEA, which is scheduled over a 29 year mine life includes total mineralized material of 417.5 million tonnes at a 46.5 g/t silver equivalent, producing concentrates containing a total of 231 million ounces silver, 2,863 million pounds of zinc, 1,992 million pounds of lead, and 0.35 million ounces of gold. The waste to mill feed tonnage ratio is 0.98:1 since the resource crops out at the surface. The resource has not been drill delineated on its perimeter, and the modeled strip ratio includes undrilled areas in the modeled open pit as waste. The modeled open pit for the PEA measures --2000 m long x 1300 m wide x 380 maximum depth.

Metallurgy is simple (side by side lead and zinc conventional floatation mills) with 88% overall recoveries after three rounds of bench-scale testing. Capital costs estimated at $570 million for initial project capital including mine, plant, TSF, and Owners Costs, and $271 million for sustaining capital over the mine life. Average annual after-tax cash flow of $77.4 million over 29 years. Average operating mining cost of $2.34 per tonne of mill feed, a plant operating cost of $5.08 per tonne of mill feed, and a G&A cost of $1.12 per tonne of mill feed.  Average annual cash operating costs are $193 million including royalties.

The base case economic estimate is an after tax net present value of $438 million, using a 7.5% discount rate, and an after-tax internal rate of return of 16.5% with a payback period of 4.8 years. An upside silver price of $25/oz yields an after tax net present value of $713 million, using a 7.5% discount rate, and an after-tax internal rate of return of 21.9% with a payback period of 3.9 years. Project infrastructure includes a good road network between Hidalgo del Parral and the mine site. Power transmission will require a 232 kV extension of 75 km to the mine site substation. Skilled mine labor is available from Hidalgo del Parral and other nearby communities in southern Chihuahua.

Levon owns all claims that cover the Cordero district, which total 37,000 hectares. Ron Tremblay, President and CEO, said, "The PEA Update confirms Levon's belief in the upside mineral potential and positive economics that we always expected. With the successful completion of an infill drilling program and subsequent metallurgical, mining, geotechnical, and tailings studies, Levon remains confident that it will continue to improve the project towards commercial production in the future."