ZACATECAS, Mexico A US$20-million project to expand the La Colorada silver mine in west-central Mexico is due to come in under budget and on time, said a spokesperson for owner Vancouver-based PAN AMERICAN SILVER.
"We don't have the final budget numbers yet but we expect investment to come in closer to US$19 million," said Brenda Radies, VP of corporate relations. The official opening ceremony is scheduled for October.
Construction work, begun in July last year, is already complete and the company is now fine-tuning the operation, she said. The expansion will be up and running in July and take a few months to hit its regular annualized rate. At full capacity, the mine is expected to produce 800 tonnes/day for average annual output of 3.8 million oz of silver over eight years.
The La Colorada expansion project involved adding a 600-tonne/day oxide ore treatment circuit to the existing 200-tonne/day sulphide mill. Pan American Silver has footed half of the project's capital costs while the World Bank's IFC arm has provided a loan to cover the remainder.
In the first quarter of 2003, production from the small-scale sulphide operation at the mine was 200,000 oz of silver. Last year, output was 626,035 oz of silver, 333 tonnes of zinc, and 316 tonnes of lead from 50,662 tonnes of ore. The 2003 production budget for the expanded plant is 2.3 million oz of silver, 518 tonnes of zinc, and 595 tonnes of lead at projected total cash costs of US$3.03/oz silver.
La Colorada has proven and probable reserves of 2.64 million tonnes grading 455 g/t Ag, containing 38.6 million oz of silver plus by-products. It has an additional resource of 1.71 million tonnes grading 259 g/t for 14.2 million oz silver in the measured and indicated category. About three-quarters of the project's reserves are made up of oxidized ore, discovered by Pan American in late 1999.