Luca completes Mexico gold mine build

Luca Mining (TSXV: LUCA; US-OTC: LUCMF) is aiming for commercial production to start in September now it has completed construction of the new Tahuehueto gold mine in Durango state, Mexico.

It joins to the Campo Morado mine in Guerrero state as the company’s second producing asset in the country, Luca said in a release on Thursday.

Tahuehueto is a fully permitted underground mining operation with a nameplate processing capacity of 1,000 tonnes per day. To date, about US$30 million has been invested between exploration, prefeasibility study (PFS) and mine development.

The mine was completed within budget and has been successfully producing on a pre-production basis for several months, Luca stated. Processing rates will now start to ramp up to commercial levels of 800 tonnes per day from around 450 tonnes.

“Tahuehueto is set to become the second cornerstone asset at Luca,” CEO Dan Barnholden said of the milestone. “We are ultimately targeting at least 50,000 oz. gold-equivalent annual production from this mine.”

Shares in Luca Mining gained 2¢ apiece to 57¢ in Toronto on Friday afternoon, valuing the company at $95.1 million. They’ve traded in a 52-week range of 20¢ to 68¢. 

Underground drilling

While it ramps up the mine’s production capacity, the company will continue its underground development efforts. Resource drilling from underground is expected to start in the coming weeks, Luca said.

Tahuehueto covers 121 sq. km and hosts an epithermal gold vein system with less than 10% of the prospective ground explored so far, Luca said. It lies in a historical mining region that hosts the San Dimas gold mine, which has a similar style of mineralization and has produced over 11 million oz. to date.

Mineral reserves at the Tahuehueto deposit are estimated to total 3.6 million tonnes at grades of 2.55 grams per tonne gold and 50.1 grams silver for 294,000 oz. of gold and 5.8 million oz. of silver. A 2022 PFS outlined an 11-year mine averaging annual production of approximately 26,000 oz. of gold and 454,000 oz. of silver.

Campo Morado produces copper-zinc-lead concentrates with precious metals credits. The operation is currently undergoing an optimization program to improve its recovery and grades.

This year, the company expects to produce between 60,000 to 70,000 oz. of gold equivalent, including 43,000-50,000 oz. from Campo Morado and 17,000-20,000 oz. from the new Tahuehueto mine.