ZACATECAS, Mexico Vancouver-based WESTERN SILVER is hoping to double the resource estimate at its "premier" Penasquito precious and base metal property in Mexico's Zacatecas state, said Jay Oness of the company's investor relations department. The current drill program underway at Penasquitos Chile-Colorado and breccia zones may boost the resource to 500 million oz of silver and 4 million to 5 million oz of gold, he pointed out. SNC LAVALIN and M3 ENGINEERS analyzed previously estimated Penasquito resources at more than 200 million oz of silver and 2 million oz of gold.
A project feasibility study is expected to wrap up by the end of 2004, leaving room for a late-2006 or early-2007 project start-up, Oness said. The company may "shortly" announce a "very large financing," which would help progress Penasquito exploration.
Western Silver already considers its wholly-owned, 39,000-hectare Penasquito property to be "one of the world's largest silver resources," according to a March company statement that based the claim on the SNC Lavalin-led mineral resource estimate. The estimate calculates that Cerro Colorado contains an indicated resource of 159 million oz of silver, 1.36 million oz of gold, 450,000 tonnes of lead and just over 1 million tonnes of zinc. An additional 58.6 million tonnes grading 29 g/t Ag, 0.31g/t Au, 0.24% Pb, and 0.69% Zn using the same US$4/tonne NSR cutoff is inferred, the company said at the time.
A scoping study released in July indicated potential metal recoveries from the project's Chile Colorado zone at 112 million oz of silver, 744,095 oz of gold, 760,996 tonnes of zinc, and 284,782 tonnes of lead over 12.2 years. Mine production is eyed at 20,000 t/d and capital costs at US$149 million. Operating costs, including mine, mill and general administration, were put at US$5.40/t.