TORONTO (miningweekly.com) – TSX-listed Tahoe Resources has received approval to start underground exploration and development work at its Escobal silver project, in Guatemala, the firm said on Wednesday.
Tahoe said it could be ready to make a construction decision on the project as early as the third quarter of this year, depending on whether it receives mining and processing permits in time.
The mine is already fully financed, after the company raised about C$352-million in a bought-deal financing late last year.
Tahoe said in Wednesday's statement it has also bought the land and surface rights needed to build the mine and project facilities.
The company will now start work on infrastructure development, and excavation of the portal sites for two declines at Escobal.
Several major equipment items have been ordered, and the company plans to start work immediately on a new 1,5 km access road, as well as a temporary laydown yard, a fuel storage facility, a maintenance shop and runoff control facilities.
Portal excavations will start immediately afterwards, and full-scale tunnelling should be under way by May, the company said.
The Escobal project is expected to cost C$326-million, based on a preliminary economic assessment completed in November last year.
The mine will produce some 20-million ounces a year of silver in the first five years of commercial production, at a total cash cost of less than $3/oz of silver after by-product credits.
Production is expected to start by late 2013, with commercial production targeted in early 2014.
Tahoe also said it expects to spend C$6-million on drilling at Escobal and regional exploration this year.
Shares in the company rose 3% on Wednesday, to C$16,08 apiece by 12:17 in Toronto.
Canada's second-biggest gold producer, Goldcorp, sold the Escobal project to Tahoe in June last year and holds about 41% of the company.
Tahoe CEO Kevin McArthur was CEO of Goldcorp until late 2008.