TORONTO (miningweekly.com) – TSX- and NYSE-listed Tahoe Resources this week said it was on schedule to ramp up production at its flagship Escobal silver project, in Guatemala, to 3 500 t/d by the first quarter of 2014.
The Vancouver-based firm in October said it had started shipping silver concentrate to smelters from its Escobal mine, which was seen as a significant feat owing to the low current silver prices having driven many juniors out of the race to production.
The company on Tuesday reported that mill commissioning continued through the quarter with first metals concentrate being produced on September 30, and the first concentrate being shipped on October 15.
The team at Escobal had completed 2 102 m of underground development during the quarter and 10 934 m in total to date. At the end of the quarter ended September 30, ten stopes (underground mining areas) were available for production and an additional ten stopes were in final development.
Stockpiled mill feed totalled 97 250 t at an estimated grade of 487 g/t silver, 0.4 g/t gold, 0.7% lead and 1.3% zinc.
Tahoe said all significant components except the paste backfill plant had been fully commissioned, and no impediments or bottlenecks to the 3 500 t/d designed capacity had been identified. The paste plant was scheduled for commissioning during the current quarter, when the first mined-out stope would be available for cemented backfill placement.
The miner was busy fine-tuning the mill to produce commercially viable metals concentrates to the specifications outlined in the May 2012 preliminary economic assessment. This work was reported to be moving forward satisfactorily and regular concentrate shipments to smelters had been under way for the past several weeks.
The present priorities were to bring the metals concentrate qualities up to commercial specifications and to increase mill throughput.
Throughput rates for the first ten days of November averaged 1 655 t/d with a plant utilisation of 70%. Improved tailings filtration would be critical to successful ramp-up. An abrasion-resistant filter cloth had been installed and optimisation of filter cycle times and thickener operation was now under way.
Tahoe said operational parameters had fluctuated, as expected, and debottlenecking efforts had demonstrated continuous improvement. To date, 891 t of precious-metals concentrates had been shipped.
Cash and cash equivalents at the end of the third quarter totalled $39.2-million, including net proceeds drawn in June from the $50-million credit facility. Given current ramp-up progress and the projected income generated by growing metals concentrate sales, the company said the cash on hand was enough to bring the project to full production.
The company reported a quarterly loss of $15.5-million, or $0.11 a share.
For 2014, Tahoe expected to produce between 18-million and 21-million ounces of silver contained in concentrate at a total production cost of $10.50/oz to $11.50/oz and all-in sustaining costs of $8.85/oz to $9.85/oz.
It planned to spend between $30-million and $35-million on sustaining and expansion capital, to bring the operation to 4 500 t/d next year, and would spend between $5-million and $10-million on exploration.
On Friday, the company’s NYSE-listed stock traded up 1.06% at $19.13 a share. The stock had gained 5.23% over the past year, having traded in a range of $11.81 to $19.76 a share.