MAZATLAN, Mexico Vancouver-based SCORPIO MINING aims to start full-scale construction by year-end at its Candelaria polymetallic property in northern Mexico's Sinaloa state, said Tracy Hurley, a company spokesperson. "We hope to break rock and continue the decline underground by November," said Hurley.
Candelaria is one of four minesthe others being Nuestra Seora, Santo Domingo and Santa Teresathat form Scorpios Nuestra Seora silver project. U.S. miner ASARCO (now part of Grupo Mxico) ran the mines in the 1950s and 1960s, until "abruptly" ceasing work in 1964 due to Mexico's "unfavorable nationalistic policies," according to Scorpio.
Financing is in place and activity is currently focused on obtaining mining permits and putting in a road, said Hurley. Scorpio is negotiating a private placement with the London office of Williams de Broe to raise US$3.1 million. Earlier in the month, Scorpio closed another private placement of US$213,000.
"These funds should more than cover getting the mine into operation. Once this happens, we can use the cash flow from Cadelaria to expand the project," said Hurley.
An earlier scoping study on Candelaria estimated production start-up of 400 t/d using a contract mill at Cosala, 14 km from the deposit. The study pegged investment at US$2.65 million to put Candelaria into production, but new engineering studies have reduced estimated costs and improved production schedules, according to Scorpio, which did not provide details.
An advanced scoping study containing all the figures is due to be released within two weeks, said Hurley.
Asarco extracted some 150,000 tonnes grading an estimated 750 g/t Ag, 6.5% Zn, 2.8% Cu and 3.5% Pb over 10 years, according to Scorpio.
Scorpio president Bill Bird can be reached at 604-678-9639 or [email protected]