Photo by: Tahoe Resources
VANCOUVER (miningweekly.com) – After last week declaring commercial production at its Guatemala flagship Escobal silver mine, Tahoe Resources is now focusing on ramping up output to 3 500 t/d, while optimising the operation to achieve a consistent run rate.
On the sidelines of the 2014 Vancouver Resource Investment Conference, Tahoe VP for investor relations Ira Gostin told Mining Weekly Online that the TSX- and NYSE-listed company 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.
“Our Guatemalan team has done a terrific job in delivering this world-scale silver mine within four years of the company’s initial public offering. While we continue to optimise the mill, tailings filtration and paste backfill operations, this has been a remarkable start-up for a precious metals flotation plant over a very short time period,” he said.
Gostin ascribed the rapid progress to the company having put together an experienced team comprising some of the best underground silver miners in the world, who were able to go in and get things going, get the project financed, get a mill built and move forward.
Escobal is expected to contribute to up to 2% of Guatemala’s gross domestic product, and $42 of every $100 in Escobal revenue was expected to stay in the country, contributing to the local economy.
Gostin noted that other than administering its $5-million to $10-million exploration budget at Escobal, focused on resource expansion and stope development, the company would consider several other exploration prospects in Guatemala, as well as in the Americas as a whole.
“We’ve got lots of exploration areas to look at in Guatemala, some with synergy potential to Escobal. We have a 2 000 km land package around Escobal, so the opportunity for other prospects is certainly there,” he said.
Owing to declaring commercial production, Gostin added that the company had started paying Guatemalan income taxes and would start making royalty payments in the first quarter.
He said the company intends to have a dividend policy in place by the time it holds its annual general meeting in May, which is central to its goal to be a growth and yield company for shareholders.
Gostin also noted that Tahoe planned to publish a feasibility report by the third quarter, which would update the resource estimate.
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, bring the operation to 4 500 t/d by 2017, and spend between $5-million and $10-million on exploration.
Meanwhile, Tahoe was also contributing to the local economy around Escobal.
Gostin explained that the area is a significant coffee-producing region, but, that in recent times a type of rust has affected crops. He said that the government did not have the resources to assist farmers to combat the disease and that Tahoe had stepped in to help the farmers to establish best practices.
The company was also proud to have, in conjunction with the government, established a vocational training facility, teaching locals skills ranging from sewing to welding and silver smithing.
Tahoe’s TSX-listed stock on Friday closed up 6.18% at C$19.41 apiece, having risen 12% in the past year.