La Negra - Lead (Pb)Summary:
Assuming we eventually get a 60 million silver resource from La Negra deposit overall, I have calculated that we could get about 7.8 million additional (equilvalent) silver ounces from the lead content. We should be able to get a couple of million in eq silver from the gold content as well. This would all bring the silver equivalent today up to around 70 million ounces (from a silver only content base of 60 million).
We could either use the secondary metals as by-product credits to reduce cash cost per silver oz even further or we could use them as add on ounces to boost our total production volume per year.
Analysis:
Pan American Silver will likely move its Alamo Dorado conventional processing plan over to La Negra, once La Negra is ready for production. Alamo Dorado produced silver, gold, lead and copper in the past. As such, it should have the processing capabilities in place to produce lead.
It looks like the La Negra deposit (overall) will post an average of somewhere around .5% lead.
Essentially, 10,000 ppm (parts per million) is 1.0% lead. As such, 5,000 ppm would be .5%
Here is the lead content for some of the larger intercepts drilled by Pan American recently at La Negra:
* DH 42 - .47% (4,730 ppm) Pb (lead) over 122.15m
* DH 43 - .23% (2,260 ppm) Pb over 38m and .10% (1,009 ppm) Pb over 45.5m
* DH 44 - 1.08% (10,789 ppm) Pb over 54.45m
* DH 45 - .73% (7,283 ppm) Pb over 20m
* DH 46 - .33% (3,246 ppm) Pb over 60.75m
* DH 47 - .52% (5,221 ppm) Pb over 17.05m
* DH 48 - 1.09% (10,916 ppm) Pb over 7.5m and .12% (1229 ppm) over 28.05m
* DH 50 - .68% (6,782 ppm) Pb over 33.95m
* DH 53 - .63% (6,303 ppm) Pb over 27.15m
Let`s assume we will eventually get a silver resource at La Negra of 60 million ounces with an average silver grade of 120 g/t silver.
That resource profile would mean we get 15,552,000 tonnes of ore. We can use this tonnage to work out our lead content.
15,552,000 * .5% lead (Pb) = 77,759 tonnes of lead
There are roughly 2,205 pounds (lbs) in one tonne of lead.
77,759 * 2,205 = 171,458,000 pounds of lead resource overall at La Negra
Let`s use US $1.00 for lead price per pound and US $22 for silver price per ounce.
171,458,000 lbs * $1.00 = $171,458,000 lead resource value at La Negra
$171,458,000 / $22 = 7,794,000 equivalent silver ounces for our lead content at La Negra
It means that if our silver content comes to, say, 60,000,000 at La Negra, we would be able to add another 7,794,000 silver equivalent to represent the lead content within the tonnage mined - essentially making the metal content 68 million Ag Eq ounces.
How much of the lead we recover will be based on metallurgical testing at La Negra.
Our La Cigarra lead recovery tests were very impressive, with a lead recovery rate of .62%. And, that is with lead content of only .13%. La Negra is looking like it has a grade of .5% (meaningfully higher). As such, I`m hoping we can realize a lead recovery rate of 70% or greater for La Negra.
As a side note, we should get a couple of million silver equivalent onces from the gold content in the tonnage also.