TORONTO (miningweekly.com) – Vancouver-based Pan American Silver's Navidad project in Argentina could produce 19,8-million ounces a year of silver in the first five years of operation, the firm said late on Tuesday.
Pan American has completed a preliminary economic assessment on the project, estimating preproduction capital costs at some $760-million, excluding recoverable value-added tax.
The project is located in Argentina's Chubut province, which currently has a ban on openpit mining, but the local government indicated it will change the law to allow development of the mine.
Cash costs after by-product credits are forecast at $6,03/oz in the first five years of the mine's estimated 17-year production life, according to the preliminary study.
Pan American is looking at building a 15 000-t/d conventional flotation processing plant, to produce silver/copper and silver/lead concentrates.
“Navidad will be one of the world's largest primary silver mines, boasting a long mine life and significant exploration potential,” CEO Geoff Burns said in a statement.
The measured and indicated mineral resource at the project has been estimated at 632-million ounces of silver, plus 119-million ounces in the inferred category.
Pan American bought the Navidad project when it acquired Aquiline Resources last year.
The firm plans to complete a full feasibility study on the project by mid-2011, and will aim to build the project within two to three years after the study is finished, assuming it gets the neccessary permits and approvals, COO Steve Busby said.
The company already operates eight mines in Mexico, Peru, Argentina and Bolivia, and has said it will produce 23,4-million ounces of silver this year, plus 95 000 oz of gold, 7 300 t of copper, 46 000 t of zinc and 15 800 t of lead.
Pan American shares rose 1,93% on Wednesday, to C$39,07 each by 12:06 in Toronto.