Amer­i­cas Sil­ver re­duces San Rafael capex es­ti­mate

Stockwatch Daily - - MINES & METALS - Mr. Dar­ren Bla­sutti re­ports

AMER­I­CAS SIL­VER Corp. has pro­vided a con­struc­tion up­date on its 100-per­cent-owned and fully fi­nanced San Rafael de­vel­op­ment project lo­cated in Si­naloa, Mex­ico. Bud­get and time­line Con­struc­tion com­menced in early fourth quar­ter 2016 with an es­ti­mated ini­tial cap­i­tal ex­pen­di­ture of $22-mil­lion (U.S.) based on the March 30, 2016, San Rafael prefea­si­bil­ity study. The ini­tial cap­i­tal es­ti­mate was sub­se­quently re­duced to $18-mil­lion (U.S.) due to project op­ti­miza­tion re­lated to mill ex­pan­sion, re­fur­bish­ing ex­ist­ing equip­ment and ramp de­vel­op­ment, as well as favourable move­ments in the Mex­i­can peso. As at June 30, 2017, the com­pany has spent ap­prox­i­mately $10.5-mil­lion of the re­vised bud­get and ex­pects to have suf­fi­cient cash on hand and cash flow gen­er­ated from con­tin­u­ing oper­a­tions to fi­nance the pro-

ject de­vel­op­ment.

Man­age­ment ex­pects that ini­tial pro­cess­ing of ma­te­rial at the ex­ist­ing Los Braceros mill will oc­cur by mid-Septem­ber. The ini­tial tar­geted through­put of 1,500 tonnes per day from the prefea­si­bil­ity study is ex­pected early in fourth quar­ter 2017. In early 2018, man­age­ment will eval­u­ate a po­ten­tial mill ex­pan­sion.

“The pace of de­vel­op­ment at San Rafael has picked up con­sid­er­ably with the chal­leng­ing ground con­di­tions now largely be­hind us, al­low­ing the project to re­main on track to de­liver on bud­get and on sched­ule for first pro­duc­tion by the end of Q3 2017,” said Daren Dell, chief op­er­at­ing of­fi­cer of Amer­i­cas Sil­ver. “I’m proud of our Mex­i­can team’s re­solve to work through the ground is­sues and main­tain the short-term de­vel­op­ment sched­ule, while also pre­serv­ing the max­i­mum long-term flex­i­bil­ity of the mine.”

Un­der­ground ramp de­vel­op­ment

Main ac­cess at San Rafael con­tin­ues to de­velop to­ward the cen­tre of the Main zone. Con­cur­rently, a sec­ondary ramp de­vel­op­ment head­ing to the west, which ac­cesses the first 18 to 24 months of pro­duc­tion in the south­ern­most part of the Main zone, has fewer than 190 me­tres of de­vel­op­ment to reach the first ore stopes. Man­age­ment cur­rently an­tic­i­pates that ramp de­vel­op­ment to this area will al­low ore stock­pil­ing to be­gin in early Au­gust.

Pro­cess­ing fa­cil­ity

Mill mod­i­fi­ca­tions are pro­gress­ing well. All ma­jor equip­ment has been de­liv­ered, and con­trac­tors are cur­rently fo­cus­ing on elec­tri­cal ca­ble in­stal­la­tion and pip­ing. Com­mis­sion­ing of the new equip­ment is set for the sec­ond half of Au­gust in an­tic­i­pa­tion of ini­tial pro­duc­tion from San Rafael.


In sec­ond quar­ter 2017, the com­pany com­pleted an eight-hole, 2,700-me­tre di­a­mond drilling cam­paign tar­get­ing the Zone 120 area. Given the suc­cess of that orig­i­nal pro­gram, four ad­di­tional holes are cur­rently test­ing the south­ern ex­ten­sion of Zone 120 to eval­u­ate a po­ten­tial con­nec­tion with the El Ca­jon mine. The in­di­vid­ual drill hole re sults from the first cam­paign will be in­cor­po­rated into the com­pany’s midyear re­serve and min­eral re­source up­date ex­pected to be re­leased by the end of third quar­ter 2017.

Cur­rent oper­a­tions

Cur­rent pro­duc­tion for the Cos­ala oper­a­tions con­tin­ues to be pri­mar­ily sourced from the Nues­tra Senora mine as higher zinc and lead prices have pri­or­i­tized this ore above the El Ca­jon ore, cur­rently in stock­piles at the Los Braceros mill. It is ex­pected that ore from Nues­tra Senora will be pro­cessed through most of third quar­ter 2017. El Ca­jon stock­piles are avail­able to sup­ple­ment mill feed un­til San Rafael com­mences at the end of the quar­ter.

We seek Safe Har­bor.

Erika Flores con­densed this news re­lease (erikaf@stock­

Dar­ren John Bla­sutti, Alexan­der John David­son, Alan R Ed­wards, Peter Jude Haw­ley, Bradley Robert Kipp, Gor­don Ed­ward Prid­ham, Lorie Wais­berg

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