TORONTO (miningweekly.com) – Mexico’s highest-grade silver producer Excellon Resources has shaved about 40% off the $9.9-million cost of an optimisation plan that is aimed at solving problems with water ingress in tunnels located below the water table at the company's Platosa mine.

During recent months, Quebec-based consulting engineering firms Hydro-Ressources and Technosub have worked to refine the optimisation plan, reducing the required capital outlay to $6-million, to be incurred in stages over ten months.

The optimised plan would also eliminate “costly” surface dewatering wells and rather substitute underground drain wells as the main method to achieve drawdown of 3.8 m a month, while also resulting in immediate energy savings through increased pump efficiency.

Excellon said it would immediately start the installation of high-efficiency pumps and undertake the required underground drilling, after it had arranged a fully subscribed financing of C$6-million through a private placement of secured convertible debentures of the company and selling a net smelter return royalty on the Platosa project.

"Further trend analysis over recent months has allowed us to develop a far less capital intensive optimisation plan for Platosa. We can now implement the plan using only underground wells, eliminating the need for surface wells and saving $4-million in upfront capital expenditures. Capital raising in this environment has been challenging, but with the funding now in place, we have a clear path forward for increasing production and lowering costs at Platosa,” president and CEO Brendan Cahill stated.

Excellon aimed to reach the lower end of its full-year guidance, as its cornerstone Platosa mine continued to grapple with excessive water inflows. The company targeted 2015 production of 900 000 oz to 1.1-million ounces of silver.

The company’s TSX-listed stock had nearly halved in value since the start of the year and on Monday closed down 3.12% at C$0.31 apiece.