TORONTO (miningweekly.com) – The Escobal silver project in Guatemala may one day equal the Fresnillo mine – the world's biggest producer of the precious metal – Tahoe Resources CEO Kevin McArthur said on Monday.
The company has drawn up a mine development timetable that would result in first production from Escobal in late 2013, he said in a presentation at the Denver Gold Forum, which was broadcast over the Internet.
“We think this deposit will be the equal to Fresnillo one day,” McArthur commented.
“It's going to take some time, it's going to take some discovery and a lot of drilling.
The Fresnillo mine in Mexico is owned and operated by top silver producer Fresnillo plc. The mine produced 33,8-million ounces of silver and 24 000 oz of gold last year.
Tahoe is drilling on the first vein at Escobal, but another 13 veins have been identified on the property “that have seen very little in the way of exploration,” McArthur said.
“We believe that we are onto a district play here.”
Tahoe completed an initial public offering and listed on the TSX in June this year, at the same time as it acquired the Escobal project from Goldcorp. McArthur was CEO of Goldcorp until late 2008.
The Escobal deposit was discovered by Goldcorp in 2007 and already has an indicated resource of about 100-million ounces of silver, plus 176-million ounces in inferred resources. It also contains some gold, lead and zinc.
The project is unusual in that it is a large silver deposit that also has high grades, McArthur commented.
Tahoe plans to complete a preliminary economic assessment by the end of 2010, which will include a new resource estimate.
The company will aim to have a full feasibility study completed in the second quarter of 2012, McArthur said.
“Our goal is to hit a construction decision by May of 2012.”
The firm is still working on scoping the project, but is currently looking at a 3 500-t/d operation, he said.
Tahoe Resources will focus on developing Escobal, as well as organic growth on the property. It will also look at "tip of the iceberg" acquisitions of silver projects in Central and South America, McArthur said.