Sunshine boosts production forecast

Exploration at the Sunshine silver mine in northern Idaho has enabled Sunshine Mining & Refining (SSC-N) to increase production estimates to more than 5.2 million oz. in both 1999 and 2000. The previous estimate was 4 million oz.

Much of the work has been focused on the West Chance vein. Says company Chairman John Simko: “We have found additional high-grade West Chance reserves below our previously estimated lowest mining depth.” This mineralization, together with exploration on the “09” and “F” veins, resulted in the higher production forecast.

The news is especially welcome considering last year’s disappointing exploration results, which forced the company to write down the US$50-million carrying value of the mine against third-quarter earnings (T.N.M., Nov. 23-29/98).

By year-end, however, the mine had cranked out 5.8 million oz. silver — its best performance since 1971. Production in 1999 could top 5.5 million oz., with 5.2 million anticipated in 2000. The net cash cost of production is forecast at US$4.60 per oz. silver.

Meanwhile in northern Argentina, Sunshine has boosted silver reserves at the Pirquitas silver-tin project. The figure now stands at 20.1 million tons grading 5 oz. silver per ton, 0.29% tin and 0.44% zinc, equivalent to 101 million oz. silver, 58,000 tons of tin and 89,000 tons of zinc.

The company continues to evaluate the zinc-enriched halo surrounding the core silver-tin mineralization.

Preliminary results from a bankable feasibility study indicate capital costs for a 5,000-ton-per-day open-pit operation would be US$120 million. Net cash costs would be US$2 per oz. over a 10-year mine life. Metallurgical recoveries are estimated at 82% for silver, 63% for tin and 48% for zinc.

Sunshine is considering increasing throughput to 6,000 tons per day.

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