VANCOUVER (miningweekly.com) – A prefeasibility study on Pan American Silver's La Morocha deposit, which is part of the Joaquin project, located in Santa Cruz, Argentina, has recommended that the deposit be developed to provide supplemental ore feed for the Manantial Espejo mill.
Vancouver-based Pan American said on Thursday that the prefeasibility study recommends the deposit be developed as an underground mine and the board has approved an investment of about $37.8-million to build the mine and fund activities up to the point of commercial production.
The base case economic estimate for La Morocha is an after-tax net present value of $9.1-million, using a 5% discount rate, with an after-tax internal rate of return of 18%, at assumed metal prices of $18.50/oz silver and $1 300/oz gold.
The deposit is expected to deliver about 474 000 t of silver ore grading 721 g/t to Manantial Espejo. Over the life of the deposit, silver output will account for about 96% of the project revenue, producing 8.9-million ounces of silver and 5 100 oz of gold over a four-year mine life.
Metallurgical tests have confirmed that that the Manantial Espejo mill is suited to process the ore from La Morocha at a slightly higher cost per tonne than the ore from Manantial Espejo. Silver and gold recovery is estimated to average 81%.
The capital outlay for the project will be funded from the company’s existing cash flow.
“We expect the combined production from these sources to contribute approximately 21-million ounces of silver to Pan American's consolidated silver production over the 2018 to 2021-time period," said president and CEO Michael Steinmann.
Pan American Silver acquired 100% of Joaquin from Coeur Mining in February. Pan American owns 100% of the Manantial Espejo mine and processing plant, which has nominal capacity of 2 000 t/d and produces silver and gold doré.