Pan American Silver Announces Results of Joaquin Preliminary Feasibility Study
TSX: PAAS
www.panamericansilver.com
VANCOUVER, Dec. 21, 2017 /CNW/ - Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAAS) ("Pan American", or the "Company") has finalized a preliminary feasibility study on the La Morocha deposit, which is part of the Joaquin project ("Joaquin"), located in Santa Cruz, Argentina. The study recommends the development of the La Morocha deposit as an underground mine, with processing to occur at Pan American's Manantial Espejo mill. Based on the results of the preliminary feasibility study, Pan American's Board of Directors has approved a capital investment of approximately $37.8 million to construct the La Morocha underground mine and fund activities up to the point of commercial production (excluding $3.6 million of reimbursable value-added tax ("VAT")).
The Company intends to prepare a technical report (the "Technical Report") pursuant to National Instrument 43-101 - Standards of Disclosure for Mining Projects ("NI 43-101") and file on SEDAR (www.sedar.com). The Technical Report will also be available on the Company's website (www.panamericansilver.com).
La Morocha Preliminary Feasibility Study Highlights:
- Ore to be delivered to Manantial Espejo for processing is estimated to be 474 thousand tonnes at 721 grams per tonne of silver.
- Life-of-mine recovered silver ounces are estimated at 8.9 million and account for 96% of the total estimated project revenue. Total recovered gold ounces are estimated at 5,100.
- Metallurgical test work confirms that the Manantial Espejo mill is suited to process the ore from La Morocha at a slightly higher cost per tonne than the ore from Manantial Espejo. Silver and gold recovery is estimated to average 81%.
- An estimated mine production and ore transport rate of 600 tonnes per day during peak operations.
- The mining method will be primarily post pillar cut and fill using unconsolidated mine development waste rock for backfill.
- Ore will be hauled to surface by mine trucks and then transported by road to the Manantial Espejo processing facility, located 145 kilometres to the south of Joaquin.
- Development of the underground access decline ramp is scheduled to begin in the second quarter of 2018, with first ore production starting in late 2019 and running until the end of 2021.
- The estimated $37.8 million project development capital investment (excluding $3.6 million of reimbursable VAT) is scheduled to be incurred during 2018 and 2019, and is anticipated to be funded from the cash flow generated through the Company's operating activities.
- The base case economic estimate for La Morocha is an after-tax net present value ("NPV") of $9.1 million, using a 5% discount rate, with an after-tax internal rate of return ("IRR") of 18%, at assumed metal prices of $18.50 per ounce silver and $1,300 per ounce gold.
"Developing Joaquin is a low-risk project that enhances the value of our Manantial Espejo processing plant and infrastructure assets. The ore from La Morocha will supplement ore feed from the underground mine and stockpiles at Manantial Espejo, as well as the feed from our COSE project. We expect the combined production from these sources to contribute approximately 21 million ounces of silver to Pan American's consolidated silver production over the 2018 to 2021 time period," said Michael Steinmann, President and Chief Executive Officer of Pan American. "Furthermore, extending the life of our operations at Manantial Espejo supports our efforts to continue exploring across our large mineral concessions in the area, including the attractive exploration potential at the La Negra deposit and other prospects acquired with Joaquin."
Estimated Production Profile
|
Silver production |
Manantial Espejo |
COSE |
Joaquin |
Annual Total |
|
2018 |
3.3 |
0.0 |
0.0 |
3.4 |
|
2019 |
2.7 |
1.6 |
0.8 |
5.1 |
|
2020 |
2.9 |
0.4 |
4.3 |
7.6 |
|
2021 |
1.3 |
0.0 |
3.8 |
5.1 |
|
Total |
10.3 |
2.0 |
8.9 |
21.2 |
|
Gold production |
||||
|
2018 |
30.0 |
0.1 |
0.0 |
30.1 |
|
2019 |
22.8 |
33.5 |
1.0 |
57.3 |
|
2020 |
24.3 |
8.0 |
2.8 |
35.0 |
|
2021 |
11.2 |
0.0 |
1.3 |
12.5 |
|
Total |
88.2 |
41.6 |
5.1 |
134.9 |
Totals may not add up due to rounding.
Mineral Reserve and Resource Estimates
Management estimates that mineral reserves and mineral resources at La Morocha, as at November 30, 2017, are as follows:
|
Classification |
Tonnes |
Silver (grams per tonne) |
Silver contained metal (million ounces) |
Gold (grams per tonne) |
Gold contained metal (thousand ounces) |
|
Probable |
474,000 |
721 |
11.0 |
0.4 |
6.3 |
Totals may not add up due to rounding. Mineral reserve estimates were prepared under the supervision of, or were reviewed by, Martin Wafforn, P. Eng., Senior Vice President Technical Services and Process Optimization of Pan American. Metal prices used for the mineral reserve estimate were $18.50 per ounce of silver and $1,300 per ounce of gold.
|
Classification |
Tonnes |
Silver (grams per tonne) |
Silver contained metal (million ounces) |
Gold (grams per tonne) |
Gold contained metal (thousand ounces) |
|
Indicated |
58,000 |
385 |
0.7 |
0.6 |
1.1 |
|
Inferred |
6,000 |
389 |
0.1 |
1.3 |
0.2 |
Totals may not add up due to rounding. Mineral resource estimates were prepared under the supervision of, or were reviewed by, Christopher Emerson, FAusIMM, Vice President Business Development and Geology, of Pan American. Metal prices used for the mineral resource estimate were $25 per ounce of silver and $1,400 per ounce of gold. Mineral resources do not have demonstrated economic viability, and are in addition to mineral reserves.
Pan American Silver acquired 100% of Joaquin from Coeur Mining, Inc. ("Coeur") in February 2017. Pan American owns 100% of the Manantial Espejo mine and processing plant, which has nominal capacity of 2,000 tonnes per day and produces silver and gold doré.
Qualified Persons
This news release was prepared under the supervision and review of Martin Wafforn, P. Eng., Senior Vice President, Technical Services and Process Optimization, and Christopher Emerson, FAusIMM, Vice President, Business Development and Geology, who are Qualified Persons as that term is defined by NI 43-101.
Data Verification
The Qualified Persons responsible for the preparation of the Technical Report have verified the data disclosed, including sampling, analytical, and test data underlying the information contained in this news release. Geological, mine engineering and metallurgical reviews included, among other things, reviewing mapping, core logs, and re-logging existing drillholes, review of geotechnical and hydrological studies, environmental and community factors, the development of the life of mine plan, capital and operating costs, transportation, taxation and royalties, and review of existing metallurgical test work. In the opinion of the Qualified Persons responsible for the preparation of the Technical Report, the data, assumptions, and parameters used to estimate mineral resources and mineral reserves, the metallurgical model, the economic analysis, and the preliminary feasibility study are sufficiently reliable for those purposes. The Technical Report, when filed, will contain more detailed information concerning associated QA/ QC and other data verification matters, and the key assumptions, parameters and methods used by the Company.
About Pan American Silver
Pan American Silver is one of the world's largest primary silver producers, providing investors with enhanced exposure to silver through low-cost operations. Founded in 1994, Pan American Silver is recognized for its operating expertise, prudent financial management and commitment to responsible development. The Company is headquartered in Vancouver, B.C. and owns and operates six mines in Mexico, Peru, Argentina and Bolivia. Our shares trade on NASDAQ and the Toronto Stock Exchange under the symbol "PAAS".
