Alamo Dorado Plant - bit more infoLa Negra deposit appears to be closer to Pan American`s Dolores operating plant than it is to their Alamo Dorado plant. It appears to be about 110 km from Dolores and about 200 km from Alamo Dorado.
Regardless, I think the La Negra ore is going to Alamo Dorado and not Dolores, but it gives Pan American options (for processing). Dolores already has plenty of ore feed remaining. Alamo Dorado has essentially run out of ore feed.
Pg 26 of Pan American`s Corp Presentation shows that Alamo Dorado had only 2.9 million silver ounces in reserves at December 31, 2015 (and 12K ounces of gold). Pg 35 of the last MD&A (on SEDAR) shows that Pan American did not incur any sustaining capital and exploration costs for the first 9 months of 2015. It would suggest that Pan American has given up exploring for additional resources around the Alamo Dorado plant.
From the Alamo Dorado section of Pan American`s website: ``The plant’s nominal design treatment rate is 4,000 tonnes per day and in 2013 the mine milled 1.8 million tonnes of ore, producing 5.1 million ounces of silver and 17,600 ounces of gold.``
The Alamo Dorado plant`s nominal design treatment rate is 4,000 tpd, but it seems to have some flexibility. With 1.8 million tonnes of ore processed in 2013, it means the plant averaged close to 5,000 tpd in 2013.
The plant produced 5.1 million Ag and 17,600 Au ounces in 2013, which is about 6 million silver equivalent ounces.
The silver recovery rate at Alamo Dorado is similar to early test rate at La Negra.
La Negra has a bit of gold, but not too heavy with gold. La Negra`s silver grade will be substantially higher than the 65 g/t (or so) silver grade of Alamo Dorado. The potential of La Negra`s grade being, say, double that of Alamo Dorado`s grade could more than compensate for the higher trucking costs. In addition to the slight gold, La Negra could produce a bit of lead also, for byproduct credits.
It looks like the flexibility of the Alamo Dorado plant (potential to scale up to 5,000 tpd), applied to the higher grade Ag at La Negra, could allow production to come in at the 6 million (oz) Ag Eq production rate posted by Alamo Dorado in 2013 - potentially even higher.
Given that Pan American is not spending any exploration dollars at Alamo Dorado, and given the low Ag reserves at end of 2015, it is probably just a matter of time before they put the Alamo Dorado plant on care and maintenance.
I think there is plenty of motivation for Pan American to fast track the drilling, permitting and development (to production at Alamo Dorado) of the initial open pit at La Negra.