Pan American Silver officials and their consultants believe the potentially world-class Navidad project may be the key opening a door to a new and prolific silver district in Argentina.
Author: Dorothy KosichPosted: Wednesday , 01 Dec 2010
A preliminary assessment (PA) revealed that Pan American Silver's Navidad Project in Chubut, Argentina, will have a capex of US$760 million, and produce a total of 275.5 million silver ounces over a 17-year mine life at an average cash cost of $6.96/oz, net of by-product credits.
Drilling data now being accumulated for an updated resource model may confirm Pan American Silver's belief that Navidad is located in "new and prolific silver district."
Commenting on the assessment, which estimates 632 million measured and indicated ounces of silver and three billion pounds of lead, PanAm Silver CEO Geoff Burns said, "As we expected, Navidad will be one of the world's largest primary silver mines, boasting a long mine life and significant exploration potential."
However, Navidad is located in the province of Chubut, which bans open pit mining. Pan American said it "continues to believe that the provincial government will introduce an amendment to the law, which would allow for the responsible development of Navidad. The PA is based on the assumption the ban will be lifted."
"The responsible development of Navidad will take into consideration the potential benefits and concerns of all stakeholders-provincial and federal governments, our Argentina employees, the local communities and of course our shareholders," Burns said.
Michael Steinmann, EVP of geology and exploration for Pan American said, ‘I believe that the drilling we have completed to date will result in an updated resource model, which will not only increase the value of the project but will also increase our confidence level in this world-class deposit. Furthermore, the potential to discover additional economic mineralization, particularly along the Argenta, Esperanza and Navidad trends is excellent."
"The known deposits are all located on the central Navidad mining claims, which cover only about 10,000 hectares of our total of 67,000 hectares of mining claims in the project's vicinity," he added. "I am confident that we will discover additional mineralization during the coming years in this new and prolific silver district."
The preliminary assessment calls for a 15,000 tpd conventional flotation processing facility which will produce silver-rich copper and silver-bearing lead concentrates. Production is anticipated to average 19.8 million silver ounces annually during the first five years of operation.
The study indicates the project will not have to impact in any way the water needs of the local communities. Energy would be supplied from twin 330 KV power lines that run 100 kilometers to the south.
Once in production, Navidad is expected to provide employment to 500 employees and contractors.
An assumption is made regarding a silver stream for part of the production from the Loma de la Plata deposit, which would deliver one million ounces of silver yearly to Silver Wheaton for 12.5 years. The discussions between Silver Wheaton and Pan American are currently ongoing.