Silver Standard’s Pirquitas mine starts commercial production

Argentina’s largest silver mine has achieved commercial production, Silver Standard Resources (SSO-T, SSRI-Q) says.

At full production the mine in the country’s northern Jujuy province will produce an average of about 10 million ounces of silver and 2,500 tonnes of tin a year, making Pirquitas one of the largest primary silver mines in the world. The deposit remains open at depth.

“There aren’t a lot of primary silver producers in the world and we’re pleased to be one of them,” Robert Quartermain, the company’s president and chief executive, said in a telephone interview from Vancouver.

“The silver price is currently moving sympathetically with gold,” he added, noting that silver prices have moved up sharply from the lows of 2004 and 2005. “With the multiplicity of uses silver has, in addition to renewed investor interest, we’ll continue to see strong prices going forward.”

The mill will operate on oxide and transitional ore until the sulphide ore that is currently being exposed from the open pit is processed in the first quarter of 2010. Concentrates produced from the plant will be shipped to various smelters around the world.

Silver recoveries are surpassing 50% and silver concentrate is grading in excess of 22 kilograms silver per tonne.

Pirquitas — at an elevation of 4,100 meters — is reached by two all-weather roads. The mine is powered primarily by natural gas, which is supplied by a 42-km-long natural gas pipeline from the mine to an existing Trans-Andean pipeline.

Based on reserves published in May 2008, the mine will have a lifespan of about fourteen and a half years.

Proven in-pit reserves total 10.7 million tonnes grading 194.5 grams silver per tonne (for contained silver of 67.1 million ounces); 0.26% tin and 0.70% zinc.

Probable in-pit reserves tally 19.3 million tonnes grading 201.7 grams silver (for contained silver of 125 million ounces); 0.20% tin and 0.90% zinc.

At presstime in Toronto Silver Standard was trading at $23.97 per share. Over the last year it has traded in a range of $9.88-27.69 and has 71.7 million shares outstanding.