VANCOUVER (miningweekly.com) – Canadian miner Americas Silver has reported strong production results for the three months ended September, as it ramps up production at the San Rafael deposit, in Mexico, for processing through the El Cajón mill.

The Toronto-based company reported on Tuesday that consolidated silver output for the quarter was 565 000 oz of silver and 1.1-million silver-equivalent ounces, representing an increase of 1% and decrease of 6%, respectively, when compared with the prior quarter, and a decrease of 5% and an increase 1%, respectively, year-on-year.

Consolidated cash costs for the quarter were about $12.61/oz silver, an increase of 26% year-on-year, while consolidated all-in sustaining costs (AISC) were about $15.92/oz silver, an increase of 24% year-on-year.

Americas Silver processed 69 000 t of silver/copper El Cajón ore, producing 160 000 oz silver. The company mined El Cajón ore in the second quarter as transitional feed to bridge the period until San Rafael production starts. San Rafeal did not yet meet its commercial production threshold and was therefore omitted from the quarterly consolidated cost calculations. Adjusting for this production, consolidated cash costs and consolidated AISC would have been $11.75/oz silver and $14.18/oz silver, respectively.

The company advised that San Rafael ore development continued to increase to about 1 000 t/d at the end of October. It now expects San Rafael to be the sole source of mill feed by mid-November, with commercial production expected before the end of the current quarter. The project remains fully funded and is tracking well to budget.

At the end of both September and October, Americas Silver performed two test runs of San Rafael ore to test the new flotation and concentrate re-grind circuits. Both tests confirmed circuit performance as predicted in the San Rafael prefeasibility study.

Americas Silver expects to produce between 2-million and 2.5-million ounces of silver and between 5-million and 5.5-million ounces of silver equivalent this year, at cash costs at the high end of the $4/oz to $5/oz silver range, and all-in sustaining cash costs of $9/oz to $10/oz silver, depending on the timing of declaring commercial production at San Rafael.

The company has cash and cash equivalents of $8.7-million at September 30. Americas Silver expects to release its third quarter financial results on November 14.