Pan American Silver moves to expand La Colorada mine, in Mexico
TORONTO (miningweekly.com) – TSX- and Nasdaq-listed precious metals miner Pan American Silver on Thursday reported that it had decided to move on with the expansion of its La Colorada mine, in Zacatecas, Mexico, to lift silver output to about 7.7-million ounces by 2017.
The company said that based on the positive results of a recently completed preliminary economic assessment (PEA) the relatively low-risk expansion project had the potential to provide “robust” after-tax economic returns using a $19/oz long-term silver price.
The PEA contemplates an increase in silver output from the current level of about 4.7-million ounces a year, for an incremental capital investment of $80-million, the majority of which would be spent over the next three years.
“Even at today's silver price, it makes sense to invest a relatively modest amount of capital to significantly increase our low-cost silver production at this high-grade and long-life asset.
“This is a low-risk project, at one of our best-performing and most stable mines, which we can comfortably finance with our internal resources,” president and CEO Geoff Burns said.
Silver traded at about $19.30/oz on Thursday.
A number of miners had in recent months slowed, shelved or cancelled new projects as a result of falling precious metals prices, rising capital costs and scarcer financing.
Pan American expected to achieve its full-year 2013 guidance of 25-million to 26-million ounces of silver and 125 000 oz to 135 000 oz of gold at cash costs below the original forecast of $11.50/oz to $12.80/oz, net of by-product credits.
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