VANCOUVER (miningweekly.com) – Primary silver producer Pan American Silver (PAS) has achieved critical milestones at two mine expansion projects in Mexico.

The Vancouver-based miner said the new 618-m-deep shaft at the La Colorada mine was commissioned in fully automatic mode in early September, ahead of schedule.

The shaft was built with zero lost-time accidents, using raiseboring and shaft automation technologies. PAS said a new filter plant, power line and underground development, which forms part of the La Colorada expansion project, still needed to be completed.

The project is now expected to be completed about 5% to 10% under budget.

The La Colorada expansion project started in 2014 with an original capital investment estimate of about $163.8-million, including sustaining capital. Once completed at the end of 2017, processing rates are expected to increase to 1 800 t/d, resulting in a 69% increase in yearly silver output to about 7.7-million ounces.

Meanwhile, PAS also announced that the new 98 km, 115 kV power line connecting the company's Dolores mine to the national power grid was energised in early September. The new power line was completed on budget and is expected to result in yearly savings of about $9-million, the company said.

"We successfully achieved these milestones on or under budget and funded them entirely from internal resources. These expansion projects will contribute to higher production rates and lower costs at both operations and, as silver prices rise, our shareholders are positioned to benefit from widening profit margins,” president and CEO Michael Steinmann stated.

The Dolores expansion project requires an estimated capital investment of about $112.4-million. By the end of 2017, this project is expected to increase silver output by about 40% to 6.3-million ounces a year and gold output by about 52% to over 205 000 oz/y.