With government and environmental approvals in hand,
The vat-leach plant, which is now capable of processing 300 tonnes of tailings per day, or 96,000 tonnes per year, was recently rehabilitated. It will treat tailings grading 250 grams silver and 0.35 gram gold per tonne. Based on estimated recoveries of 60% for gold and silver, monthly production should average 42,240 oz. silver and 57 oz. gold. Other tailings with higher values in gold and silver are being metallurgically tested and, assuming the results are positive, may be combined with La Sauceda tailings to improve cash flows.
ECU had struggled to achieve profitability at Velardena since the second half of 1999, and eventually managed to transform operating losses of $250,000 into monthly profits of $100,000. The turnaround was not sufficient to cover past debts and debt service costs, however, so lender Hecla decided to foreclose and execute its lien on the 500-ton-per-day mill. The net proceeds of US$6.4 million were used to repay bank debt and related costs.
Hecla intends to use the cyanide-leach mill to process ore from San Sebastian, 65 miles away. In 2001, the project is expected to produce about 1 million to 1.5 million oz. silver and 25,000-29,000 oz. gold. The average cash cost over a 4-year period is estimated at US$1.15 per oz. of silver produced.
San Sebastian hosts an indicated resource of 440,000 tons grading 16 oz. silver and 0.15 oz. gold per ton within the Francine vein. Other veins contain an additional 800,000 tons grading 10 oz. silver and 0.13 oz. gold, and potential exists for increases in other quartz veins. During the last quarter of 2000, San Sebastian produced 177,000 oz. silver and about 3,400 oz. gold from ores processed on a contract basis at Velardena. Recoveries were 91% for gold and 85% for silver.
A government agency has granted
The company intends to build a large-scale, open-pit mine capable of producing 40,000 tonnes per day. Capital costs are estimated at US$435 million. The mine is expected to turn out an average of 27 million oz. silver annually during its first five years. Annual zinc production during this period is expected to average 570 million lbs. contained in concentrates.
The newly obtained environmental permit covers all aspects of mining and processing, including the plant site, access roads and a tailings storage facility. Apex says San Cristobal will be among the world’s lowest-cost producers of silver and zinc. Proven and probable reserves stand at 240 million tonnes grading 2 oz. per tonne silver, 1.67% zinc and 0.58% lead, containing 470 million oz. silver, 8.8 billion lbs. zinc and 3.1 billion lbs. lead.
Situated 500 km south of La Paz, San Cristobal is accessible by gravel road from a railroad at Rio Grande, 50 km to the north.