Pan American assays boost outlook at La Colorada

Pan American Silver (NYSE, TSX: PAAS) reported major drill results from its La Colorada mine in Zacatecas, Mexico, pointing to new high-grade silver veins that could expand mineral resources, extend mine life and improve economics.

The company’s shares rose 3.6% to $49.61 in Toronto on Monday morning, for a market capitalization of $20.8 billion. 

The 65,000-metre program across 170 holes targeting the eastern zone of La Colorada, its largest silver-producing mine, has expanded strike and vertical continuity in the Mariana, NC2, Cristina, and San Geronimo zones. Underground development advanced more than 300 metres east on four levels, establishing new drill bays to accelerate delineation and conversion, Canaccord Genuity said in a note. 

“Collectively, the eastern extensions, southeast corridor, and contact-related replacement discovery point to meaningful near-mine resource growth potential,” mining analyst Carey MacRury said. Tbey “support longer mine life with improved economics” ahead of an expected resource update, MacRury said. 

Seven-month program

The drilling completed between November 2024 and June extended the Mariana and NC2 vein systems, with Mariana now spanning roughly 1,000 metres and NC2 exceeding 2,000 metres. Both veins show significant vertical extents, reaching more than 350 metres and 500 metres respectively. 

The company also reported higher gold grades than previously seen, suggesting untapped gold potential in future operations. In addition, a new high-grade silver and base metal replacement zone was found at the contact between volcanic and sedimentary rocks in the southeastern section of the mine.

The breakthrough strengthens geological understanding of La Colorada and highlights a promising exploration target in the Cristina/San Geronimo corridor south of the current operation, Christopher Emerson, senior vice-president of exploration and geology, said in a release. 

“The discovery of a new high-grade replacement style of mineralization, and vein style mineralization, particularly in the San Geronimo and Cristina zones in the southeastern portion of the property, will be reflected in an update,” Emerson said.