Silver producer Pan American Silver (TSX: PAAS; NYSE: PAAS) has updated the resource estimate for the La Colorada skarn deposit near its wholly owned La Colorada underground mine in Mexico’s Zacatecas state.
Inferred resources now stand at 100.4 million tonnes, grading 44 grams per tonne silver, 0.2% copper, 1.77% lead and 4.29% zinc, containing 141 million oz. silver, 199,000 tonnes copper, 1.8 million lb. lead and 4.3 million tonnes zinc. According to Pan American, the updated estimate increases resource tonnage by 38%, with an equivalent increase in contained silver ounces compared with the maiden inferred resource for La Colorada published in December 2019.
“In the span of only 18 months, we have been able to discover over 100 million tonnes of polymetallic mineral resources through this exciting skarn deposit at La Colorada,” Christopher Emerson, the company’s vice president of exploration, said in a release. “Exploration drilling continues to demonstrate the extent of the mineralized system, which remains open in nearly all directions for resource expansions. Drilling over the last six months has further increased our confidence that the La Colorada skarn is a deposit of world-class size and quality.”
Emerson added that drilling, metallurgical studies and preliminary project engineering work are all underway to advance the development of the skarn deposit.
This most recent resource – and the 2019 estimate – is based on a US$60 per tonne cut-off value, which incorporates transportation, smelting and refining costs and incorporates 85 diamond drill holes with a total of 70,000 metres of drilling (compared to 65 holes totalling 54,000 metres used in 2019). The resource estimate is undiluted and mining parameters have not been applied.
The skarn mineralization covers an area of 850 metres by 650 metres, with additional satellite zones. The deposit is east of the existing workings at La Colorada and lies at a depth between 600 metres and 1,900 metres. The skarn discovery was first announced in October 2018.
In the first half of 2020, the company drilled over 18,600 metres at La Colorada, with a total of 44,000 metres planned for this year.
Pan American’s 1,800-tonne per day La Colorada mine produces silver and gold doré as well as silver-rich lead and zinc concentrates. The underground operation is the biggest silver producer in the company’s portfolio.
La Colorada is an epithermal silver-gold deposit with three active mining areas at the property. Main mineralization types at the site include breccia pipes, vein-hosted mineralization and replacement mantos.
Pan American withdrew its 2020 production guidance in May due to the Covid-19 pandemic. With its second quarter results release in August, the company provided revised forecasts: the precious metals producer expects to generate 19 million oz. to 22 million oz. of silver and 525,000 oz. to 575,000 oz. of gold this year, at all-in sustaining costs of negative US$3 to positive US$0.75 per silver ounce. In the first half of 2020, the miner churned out 8.4 million oz. of silver and 252,700 oz. of gold.