The Mexican government has given its stamp of approval to an agreement Silver Eagle Mines (SEG-T, SVEGF-O) has reached with its union to temporarily shut down the company’s Miguel Auza mine in Zacatecas state.
Depressed prices for silver, lead and zinc have rendered the operation unprofitable and the closure is expected to last until at least June 15 and could be extended beyond that, the Toronto-based miner said.
The government’s approval means Silver Eagle can suspend operations and temporarily lay off workers without having to terminate their employment.
Silver Eagle says it intends to reinstate its workers and resume operations as soon as market conditions improve. At presstime, the spot price for silver was US$10.85 per oz.
Silver Eagle says it is reviewing all options and strategic alternatives, including raising additional capital, selling assets to improve its financial position, or completing a merger or acquisition.
The Miguel Auza property includes mineral rights to 415 sq. km and hosts past-producing mines.
In September, Silver Eagle started commissioning the expanded processing plant at the Miguel Auza mine.
When commissioning is completed, the plant is designed to process up to about 600 tonnes per day, and produce saleable concentrates containing silver, lead and zinc.
Miguel Auza hosts 1.95 million tonnes of probable reserves grading 137 grams silver per tonne, 2.15% lead and 2.25% zinc. In addition, the mine has an estimated inferred resource of 0.86 million tonnes grading 0.23 gram gold per tonne, 242 grams silver, 1.55% lead and 2.42% zinc.
At presstime, Silver Eagle was trading at 5.5¢ per share in a 52-week trading range of 3-96¢ per share.
Silver Eagle has 55.5 million shares outstanding.
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