Americas Silver reduces San Rafael capex estimate
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-
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.
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 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.
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