TORONTO (miningweekly.com) – Mexico-focused precious metals producer First Majestic Silver on Tuesday said it had more than tripled the National Instrument 43-101-compliant proven and probable reserves at its San Martin mine, in the state of Jalisco.
The company announced the results of an updated compliant technical report and economic assessment of the mine’s current expansion programme to 1 300 t/d.
First Majestic said the proven and probable reserves increased by 224% to 22-million silver ounces and the life-of-mine (LoM) increased to 9.5 years at the higher throughput rate.
The economic assessment determined an after-tax net present value using a 5% discount of $52-million on the expanded operation and a 130% internal rate of return, with both values calculated using a 10% discount to the three-year average silver price.
The LoM average cash cost was estimated at $11.45/oz, excluding any by-product credits and the LoM average operating cash flow was estimated at $22.8-million a year starting in 2014.
Operating costs were estimated at $43.44/t, excluding third-party smelting and refining charges, transportation and insurance costs.
First Majestic said it expected the expansion programme to increase output to between 1.4-million and 1.6-million ounces of rough silver a year.
The company, earlier this month, cut its capital budget by 18% as a result of the drop in the silver price, adding that it could revise its capital budget again later this year should the price continue to slide.
First Majestic slashed its capital budget from $192.3-million to $162.3-million.
The Vancouver-based company said it would reduce exploration and development expenditures, noting that it would not affect its production outlook or ongoing expansion projects.