PERTH (miningweekly.com) – ASX-listed Consolidated Zinc has flagged the start of production from its Plomosas zinc/lead/silver mine, in Mexico, before the end of 2018.

The company had initially targeted a large production facility to start in 2019/20; however, Consolidated Zinc said on Friday said that the results from additional mining studies and costings received to date, combined with a review of the existing processing plant, has seen the company revisit its plans.

Instead, Consolidated Zinc is now planning to start a Stage 1 pilot operation in 2018, for a period of around seven months, before the planned Stage 2 expansion is undertaken in 2019.

The Stage 1 operation could be undertaken for a capital spend of less than $5-million, based on tenders received, and would provide Consolidated Zinc with cash flow to meet ongoing mine standing costs, as well as additional exploration.

The Stage 1 operation is based on a mineral resource of 20 400 t, at 13.8% zinc, and 2.4% lead, which are all in the indicated category.

“The mining and scheduling scoping study presents a preferred mine implementation plant that Consolidated Zinc will work towards implementing in 2018,” said CEO Brad Marwood.

“The mature mining industry in Mexico has developed proven pathways for funding mining projects and Consolidated Zinc are well advanced in securing a funding solution for the development of the Plamosas mine.”

Marwood said that by fast-tracking the Stage 1 production, the company was seeking to provide a return to shareholders through providing cashflow which would also underpin expanding production.

Plomosas currently has a mineral resource estimate of 1.17-million tonnes, at 16.1% zinc and lead, and 22.2 g/t silver, for 189 700 t of contained zinc and lead.

Based on the current mineral resource, the project is expected to contain sufficient mineralisation to justify a staged operation over several years, while Consolidated Zinc continues resource definition and extension drilling from underground and surface, the miner said.

The company is now undertaking detail costing studies for mine development, and will look to submit its environmental studies and applications, while also executing mining and mine refurbishment contracts.

Meanwhile, Consolidated Zinc on Friday reported that it had received a claim from Pandion Minerals, under which that company was claiming to be conditionally entitled to a 10% interest in the Plomosas project, being free-carried until the completion of a definitive feasibility study.

Pandion is relying on an alleged letter of agreement dated December 2014, with Consolidated Zinc saying it was not previously in possession of a copy of the alleged agreement, and did not accept its authenticity.

“Consolidated Zinc considers the claim to be unfounded and, if the claim is pursued, will defend the claim vigorously,” the company said.

Plomosas is currently 51% held by a subsidiary of Consolidated Zinc, with a pre-condition of the alleged Pandion agreement being that the company should acquire a further 39% stake in joint venture company Minera Latin America Zinc.