Silver Mine Could Hold 15 Million Ounces
Silver Standard Resources (TSX: SSO) to Develop Mexican Mine
Silver Standard Resources (TSX: SSO) is eyeing development of the Pitarrilla silver deposit in Durango, Mexico. A wholly-owned project, the Pitarrilla deposit is expected to produce nearly 15 million ounces of silver over its first 18 years of operation, which would make it among that country’s biggest open-pit silver mines.
Silver Standard, based in Vancouver, Canada, had discovered the Pitarrilla deposit back in 2002. The company envisions mining the deposit—which also contains oxide and sulfide ore types—in five phases, from the Breccia Ridge and Cordon Colorado zone onward.
Daily mill production should see around 16,000 tons of float-leach ore and 12,000 tons of direct-leach ore.
As the Northern Miner reports, Silver Standard hopes to harvest 1.1 billion tons of material and around 157 million tons of ore over a projected 32-year lifespan of the mine. The company estimates that the Pitarrilla mine should result in 333 million ounces of silver, 582 million pounds of lead, and 1.6 billion pounds of zinc. Yearly, that comes to 10 million ounces of silver, 18 million pounds of lead, and 51 million pounds of zinc.
There are fairly significant start-up costs involved; mine building would require $741 million, and $404 million is estimated to go toward sustaining capital.
However, the overall economic outlook for the mine is quite healthy—it should take little more than 7 years to recover all initial costs once production begins.
Silver Standard had $353 million in cash holdings at the end of Q3 this year, having sold the Brucejack and Snowfield gold projects to Pretium Resources (TSX: PVG) (in which the company has a 20 percent stake) earlier in 2010.
As far as the Pitarrilla development is concerned, the company is presently drawing up an Environmental Impact Assessment due to be submitted early this year, and construction could be finalized this year too. Any commercial production might start some three years after that.