Tahoe Resources Inc. (
TSX: T.THO,
Stock Forum) has announced the results of an independent feasibility study for its Escobal mine in southeastern Guatemala.
The company said proven and probable mineral reserves now stand at 31.4 million tonnes at an average grade of 347 grams per tonne, containing 350.5 million ounces in the mine plan.
It also said measured and indicated mineral resources stand at 433.9 million silver ounces at a grade of 346 grams per tonne, marking an 18% increase from a January 2012 estimate.
“The primary purpose of the feasibility study was to provide support for the mineral reserve estimate and the details of the life of mine plan,’’ said Tahoe Chief Executive Officer Kevin McArthur in a press release.
“Escobal achieved commercial production in January, and our goal is to produce 20 million ounces of silver in its first year of production,’’ he said. “Escobal forms a strong economic foundation for the future growth of the company,’’ he said.
The feasibility study forsees average annual production of 19.1 million silver ounces and 22.4 million silver equivalent ounces over the first 10 years of the mine life.
It also says that as of July 1, 2014, the remaining capital costs to expand the production rate from 3,500 to 4,500 tonnes per day are estimated at $24.3 million.
All expansion capital is expected to be funded by existing cash balance and projected future cash flow.
Escobal is an intermediate-sulfidation silver-gold-lead-zinc deposit which the company is currently mining via underground longhole stoping methods.
Production commenced in the fourth quarter of 2013 and reached the commercial production stage in January 2013.
The company expects construction and development to support the 4,500 tonne-per-day throughput rate to be completed by the middle of 2015. Production should reach that level by the end of 2015.
The Escobal mineral reserves were estimated by Blattman Brothers Consulting, LLC.
Tahoe Resources shares traded at $19.10 on Wednesday, leaving a market cap of $2.8 billion, based on 147.6 million shares outstanding. The 52-week range is $30.15 and $16.55.
FULL DISCLOSURE: Tahoe Resources is a client of Stockhouse Publishing.