Tahoe Resources Inc. (
TSX: T.THO,
Stock Forum), after releasing its first quarter results on Thursday, says it is on track to meet its 2014 production targets at one of the world’s largest silver mines in Guatemala.
Tahoe Chief Executive Officer Kevin McArthur made that pledge during a speech to the company’s annual meeting in Vancouver on Thursday morning.
Earlier in the day, the company released first quarter financial results which show that the company’s Escobal mine has successfully reached design capacity of 3,500 tonnes per day.
After producing 4.1 million ounces of silver in the first quarter at a total cost of $9.14 an ounce, McArthur said the company expects to reach a previously announced production target of between 18 and 21 million ounces this year.
“We expect to hit those numbers,’’ he said.
The wholly-owned Escobal project is located in southeastern Guatemala, approximately 70 kilometres from Guatemala City, near the municipality of San Rafael las Flores.
Having reached the commercial production stage in January 2014, the mine employs 850 people, of which 96% are from local communities.
Escobal hosts an indicated silver resource of 367.5 million ounces at an average grade of 422 grams per tonne.
As the company ramps up to 4,500 tonnes per day (at an additional cost of $46.2 million), Tahoe believes Escobal will produce an average of 20 million ounces of silver equivalent during the first 10 years in operation.
Meanwhile, Tahoe reported a first quarter net profit of $24.8 million or 17 cents a share on concentrate sale revenue of $89.9 million,
the company said in a press release. Silver is contained in a lead-rich concentrate, which is shipped out in bags, along with a zinc concentrate.
McArthur said the mine is expected to generate around $200 million in free cash flow, an amount that should enable Tahoe to deliver the highest dividend in the silver space.
Tahoe shares eased 1.5% to $23.68 Thursday, leaving a market cap of $3.5 billion, based on 146.5 million shares outstanding. The 52-week range is $27.16 and $12.44.
Disclosure: Tahoe Resources is a Stockhouse client.