TORONTO (miningweekly.com) – Growth-focused precious metals producer Sierra Metals has revealed a significant shakeup of its corporate team in Mexico, with a view to improve operations at the Bolivar copper and Cusi silver mines, following disappointing third-quarter production results as a result of lower recoveries.

The Toronto-headquartered company advised on Tuesday that it would follow the same premise as the prior successful operational improvement programme it implemented at the Yauricocha polymetallic mine, in Peru, starting late in 2015.

The programme to date has focused on strengthening the corporate team, adding technical expertise at the projects, improvements to production capacity through mine design, planning and sequencing, and improving metals production through improvements to the metallurgical recovery process and ore throughput.

“Management is committed to improving operations in Mexico and to increasing the profitability of both the Bolivar and Cusi mines. We have undertaken efforts to appoint experienced and qualified personnel to run the operational improvements programme and to improve the efficiency and operations at both mines.

“We expect that our programme efforts should be more apparent in the latter part of 2017 and we will continue working toward completion of the improvements scheduled for the end of Q1 2018. We are optimistic about the outcome and expect to see higher cash flow from our Mexican operations starting in Q2 2018,” president and CEO Igor Gonzales advised.

The Mexican management team has been reinforced with a new GM, operations manager and site managers, to improve the performance of its Mexican assets.

Sierra reported last week that consolidated metal output during the third quarter ended September 30 was 8% lower year-on-year, as lower output in Mexico, which was partially offset by record throughput in Peru, weighed on operating results. The company explained that the temporary drop in Mexican output was mainly owing to the implementation of a new plan to improve operational performance and produce profitable silver ounces at Cusi, as well as to improve efficiencies at the Bolivar mine.

Sierra has been focused on improving metallurgical recoveries at both mills in Mexico and has been able to achieve consistently higher metallurgical recovery levels to an average level of 82% at the Piedras Verdes mill, located at the Bolivar mine, and to an average level of 83% at the Malpaso mill, located near the Cusi mine.

This was achieved through a reduction in the grind size of the ore processed to a particle size distribution level of P80, allowing for the optimal release of mineralisation and milling throughput. Further, recoveries have been increased through identification, classification and individual treatment of separated ore types at the Cusi mine. 

The separated ore types are then processed through individual campaigns, and through the addition of lime, recoveries are increased. 

Sierra added that, at Cusi, it has also implemented a comprehensive cost analysis for each campaign sent to the mill to ensure that only economic ore is processed, which also helps to control mill expenses and improve operating margins. Studies are under way to define capital requirements to expand both the Cusi and Bolivar mines’ tailings facilities, as well as define mine development and plant expansions by the third quarter of 2018.

MINE IMPROVEMENTS
At the Bolivar mine, Sierra continues to define higher-grade ore sources at Bolivar West and Bolivar Northwest, which are expected to come into the mine plan by the second half of 2019. 

However, as a short-term planning strategy, the Bolivar mine continues to focus on developing and mining the El Gallo Inferior zone to centralise operations, optimise equipment use and improve productivity.

Bolivar output is expected to reach 3 000 t/d in the first quarter of 2018. Metallurgical recoveries are expected to remain at current levels for 2018.

The company continues to work to increase tonnage at Bolivar through the commissioning of 13 new pieces of equipment. The new equipment, along with the best use of existing mine infrastructure and equipment, will help maximise ore delivery to the processing plant.

Sierra also stressed that it would endeavour to reduce costs, and efforts have been put in place to optimise capital expenditures on access development at Bolivar.

At Cusi, Sierra is focused on completing access, development and production of the Santa Rosa de Lima zone, which has wider structures and higher silver grades than the narrow veins currently being mined. The company has reached the Santa Rosa de Lima structure and is currently developing drifts to mine this area.

Sierra is currently mining selected higher-grade structures at the old mine and adding development ore from the Santa Rosa de Lima structure, containing improved head grades, to the mill at Cusi. The company expects to gradually increase tonnage from the Santa Rosa de Lima zone until the mill is operating at its capacity of 650 t/d using only ore from the Santa Rosa de Lima zone. 

It is expected that the main supply of ore in-terms of tonnage and grade will come from Santa Rosa de Lima, starting in the second quarter of next year.

The change in focus at Cusi is the result of a geological reinterpretation and the company successfully completing two sequential drill campaigns totalling 29 500 m at the Santa Rosa de Lima zone, which saw average silver equivalent grades of 372 g/t and average widths of 3.8 m. These results will be included in a mineral resource update for the Cusi mine, expected to be published in the current quarter.

Further, Sierra will complement structural development at the Santa Rosa de Lima zone with long-hole mining, as opposed to the current cut-and-fill methodology, which should result in lower costs going forward.

A prefeasibility study and capital expenditures estimate study to define economic options for a potential new Cusi plant are also targeted for publication by the third quarter of 2018.