Vancouver — With a development plan in hand and a clear path to financing, Denver-based Apex Silver Mines (SIL-V) is set to proceed with development of its flagship San Cristobal silver-zinc-lead project. The project is situated in the Potosi district of southwestern Bolivia.The San Cristobal project, which could see production as early as 2007, will be developed as a large open-pit mine.The mine plan is based on US$5.75-per-oz. silver, US$1,100-per-tonne zinc and US$660-per-tonne lead.
The mine is expected to produce some 22 million oz. silver at US$1.31 per oz. cash cost in the first five years. This includes lead credits of 85,000 tonnes. Another 180,000 tonnes of zinc a year at $0.39 per lb. cash cost will be co-produced.
San Cristobal hosts approximately 450 million oz. silver and 8 billion lbs. zinc and 3 billion lbs. of lead contained in the proven and probable reserve categories. The orebody is however believed to have good expansion potential as it is still open at depth and laterally.
The project involves construction of a 40,000-tonne-per-day mill which will process some 229 million tonnes of material grading 63.28 grams silver, 1.60% zinc and 0.59% lead to produce zinc and lead concentrates over the project’s 16-year mine-life. The average stripping ratio for the mine is 1.56:1.
The US$585 million estimated cost of the project includes pre-stripping, engineering, procurement, construction, freight, and taxes. It does not include the cost of the mining fleet which will be contracted out nor advances to power and port facilities.
The total project funding is estimated at US$620 million.
Apex Silver plans to use some of the US$38.6 million in net proceeds from a recent offering to finance part of San Cristobal’s construction and development.
The company recently retained Barclays Capital and BNP Paribas to arrange the commercial bank debt financing for the project.
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