Apex picks power contract

Denver — Apex Silver Mines (SIL-X) has selected Nor Oeste Pacifico Generacion de Energia Limitada (NOPEL) to supply power for the proposed San Cristobal silver-zinc project in southwestern Bolivia.

NOPEL is the generating and transmission subsidiary of the US$750-million GasAtacama project, owned by Chile’s Empresa Nacional de Electricidad (Endesa) and CMS Gas Transmission. GasAtacama consists of a natural gas pipeline and a 740-megawatt power station at Mejillones, north of Antofagasta, Chile.

Apex Silver signed the definitive letter of intent, in which NOPEL will provide electricity to the US$430-million project over the life of the operation. Power costs are consistent with assumptions made in the San Cristobal feasibility study, the company said.

Bidding on the power contract began late last year as a step to completing financing for construction. The company also reached an agreement with the governments of Bolivia and Chile over construction of a road across Bolivia’s Altiplano, down to the coast of Chile. Concentrates from the mine would have free transit access to port, where they would be shipped for smelting and refining.

While Apex Silver requires executive and regulatory approvals for the power agreement, it received its environmental permits for the project earlier in the year.

At 40,000 tonnes per day, the project has reserves to last 17 years, producing up to 27 million oz. silver and 570 million lbs. zinc annually for the first five years of operation. The company is also considering expanding production to 60,000 tonnes per day.