Apex expands size of San Cristobal deposit

Drilling at the San Cristobal silver-zinc-lead deposit in southern Bolivia has resulted in yet another increase in reserves.

Apex Silver Mines (SIL-X) boosted the size of the deposit by half following more than 132,000 metres of drilling in the past year.

The proven and probable figure now stands at 259 million tonnes grading 70 grams silver per tonne, 1.57% zinc and 0.55% lead, equivalent to 509 million oz. silver, 4.1 million tonnes zinc and 1.4 million tonnes lead.

This represents a 132% increase in the amount of silver projected in the prefeasbility study, a 122% increase in the amount of zinc and a 127% increase in the amount of lead.

All estimates are based on prices of US$5 per oz. silver, US47 cents per lb. zinc, and US25 cents per lb. lead.

In addition, mineralized material in areas near the deposit is said to total 57 million tonnes grading 77 grams silver, equivalent to 140 million oz. silver.

Half of this year’s drilling, totalling 97,000 metres, consisted of stepout holes, chiefly in the vicinity of the Jayula and Tesorera zones. Most of the rest of the drilling concentrated on infill in the pit.

An initial feasibility study delineated enough reserves for annual production of 14 million oz. silver, 132,700 tonnes of zinc and 39,500 tonnes of lead over a minelife of nearly 12 years. The new reserves extend the life to 24 years, and the company is evaluating the possibility of increasing the planned daily throughput to beyond 30,000 tonnes.

A final feasibility study is expected in April 1999.

Apex says it may even raise daily throughput to 60,000 tonnes, within two or three years of startup. The degree to which such an increase would jack up capital costs (currently estimated at US$327 million) is uncertain. Construction is still targeted for mid-1999, with startup envisaged for 2001.

The company anticipates further reserve increases, as the deposit remains open in many directions as well as at depth. “San Cristobal will clearly be one of the largest silver mines in the world, as well as being the world’s largest open-pit producer of the metal,” says President Keith Hulley.

The company reported a third-quarter loss of US$3.4 million (or 13 cents per share), compared with a loss of US$4.5 million (or 22 cents per share) a year ago.