Sierra Metals advances towards tripling production at its Cusi mine during 2013 and announces new silver expansion plans beyond 2014, Chihuahua State, Mexico
TORONTO, May 28, 2013 /PRNewswire/ – Sierra Metals Inc. (TSX-V:SMT)(BVL:SMT) (“Sierra Metals” or the “Company”) is pleased to
report that the Company is on track to triple production at its Cusi
property during 2013. Development of new access drifts at the La India
mine and Minerva Mine is on time and daily production is now double
that of 2012. The Cusi operation is scheduled to continue to expand
and reach production of at least 500 tonnes per day within 4 months.
Press Release Highlights:
-- Continued development of the Santa Eduwiges mine to depth has revealed high grades of silver on Level 10A, with silver grades up to 5,836 g/t silver and 4.1 g/t Auover 0.9 m width. -- Development of the La India mine (Candelaria, 20 de Noviembre, Durana and Saturno veins) is well advanced with the access drift now 200 m along the Candelaria vein. Grades up to 1,496 g/t silver and 5.4 g/t gold over 0.4 m have been encountered along the drift. -- The Fatima cross-cut drift has cut the Candelaria vein and a newly-started drift along the vein has returned silver grades up to 189 g/t and 1.1 g/t gold over 1.0 m width. -- Development of the Minerva Mine from a new adit has advanced 58 meters and cut the Minerva vein. Samples from Level 1 of the mine in an older drift returnedsilver grades of up to 1,237 g/t and gold up to 22.5 g/t over 0.3 m width. -- Development at the La India Mine has advanced 168 m -- The San Juan Mine has been developed and production will commence during the fourth quarter at a rate of 80-100 tpd.
“Our Cusi operation continues to advance on time with the objective of
reaching production of at least 500 tonnes per day by October this
year”, stated Daniel Tellechea, President & CEO of Sierra Metals.
“This will complete Phase One of our development of this large silver
district, which was the acquisition, exploration, development and pilot
mining of the property to reach commercial production and mill
throughput of 500 tpd. At that rate and with our budgeted silver grade
and recovery, the objective is to have an annualized silver production
of over 1,000,000 ounces per year. Phase Two will begin during 2014,
consisting of exploration and development with the objective of
achieving production of at least 2,000 tpd by 2015 with a new mill on
site. For each 500 tpd increment in mine production, we expect a
similar proportional increment in silver production. The Cusi project
will be the major driver for increasing the Company’s global silver
An NI 43-101 resource report is in progress and is expected to be
completed during the third quarter of this year. The decision to
construct a new mill will be subject to an economic study and financing
in place. The Company’s Cusi Property encompasses 60 concessions
covering 11,319 hectares that include 12 inactive mines, each located
on a mineralized structure, and which lie within 40 kilometres of the
Malpaso Mill. These mines produced high-grade silver but became
inactive due to revolution, silver price collapses and world-wide
depression in the first half of the 20(th) Century.
The Company’s objective for the Cusi property in 2013 is to advance
underground development from five mines, the Santa Eduwiges,
Promontorio, La India, Minerva and San Juan Mines to allow mining and
development both laterally and at depth. This will bring to five the
total of producing mines at the Cusi project. Management believes that
Cusi is only starting to reveal its full silver potential.
MINE DEVELOPMENT ACCELERATES AT CUSI IN FIVE MINES
Sierra Metals is advancing development of the Minerva Mine, San Juan
Mine, Promontorio Mine, La India Mine (Candelaria, 20 de Noviembre,
Durana and Saturno veins) and Santa Eduwiges Mine to achieve production
from these mines of 500 tonnes per day or more in the fourth quarter of
2013 (http://files.newswire.ca/1167/CusiMiningArea.pdf). Development work is being done by a combination of the Company’s
employees plus contractors. Production during the first quarter of
this year has already nearly doubled from that of last year, reaching
315 tpd (see press release of April 30, 2013) as opposed to an average
of 170 tpd during 2012. This increase in production is due mainly to
expanded production from the Santa Eduwiges Mine with additional
production from the Promontorio Mine.
Table 1: Selected Samples from Cusi project, Chihuahua
_______________________________________________________________ |Sample #| Sample |Ag g/t|Au g/t| Pb %| Zn %| Mn %|Mine or Vein| | |Width (m)| | | | | | | |________|_________|______|______|_____|_____|_____|____________| | 14642 | 0.90 |5,836 | 4.1 |1.366|1.273|0.475|S. Eduwiges | |________|_________|______|______|_____|_____|_____|____________| | 14643 | 0.40 |2,700 | 1.1 |1.393|1.046|0.661| " | |________|_________|______|______|_____|_____|_____|____________| | 14644 | 0.30 |1,709 | 0.3 |1.635|0.942|0.064| " | |________|_________|______|______|_____|_____|_____|____________| | 14645 | 0.70 |1,639 | 0.3 |1.342|2.686|0.863| " | |________|_________|______|______|_____|_____|_____|____________| | 14646 | 0.50 | 322 | 0.8 |0.486|0.588|0.569| " | |________|_________|______|______|_____|_____|_____|____________| | | |_______________________________________________________________| | 208629 | 0.60 | 199 | ind* |0.164|0.458|2.869| Candelaria | |________|_________|______|______|_____|_____|_____|____________| | 208630 | 0.80 | 448 | ind |0.506|0.551|5.312| " | |________|_________|______|______|_____|_____|_____|____________| | 450140 | 0.60 | 165 | ind |0.206|0.423|3.784| " | |________|_________|______|______|_____|_____|_____|____________| | 450141 | 0.50 | 120 | ind |0.105|0.351|3.757| " | |________|_________|______|______|_____|_____|_____|____________| | 450142 | 0.80 | 127 | ind |0.210|0.304|2.236| " | |________|_________|______|______|_____|_____|_____|____________| | 1803 | 1.00 | 189 | 1.2 |0.066|0.075|1.334| " | |________|_________|______|______|_____|_____|_____|____________| | 1804 | 0.40 |1,496 | 5.4 |0.359|0.157|2.122| " | |________|_________|______|______|_____|_____|_____|____________| | | |_______________________________________________________________| | 12055 | 0.30 |1,237 | 22.5 | 1.36| 0.15| 3.03| Minerva | |________|_________|______|______|_____|_____|_____|____________| | 12057 | 0.25 | 536 | 3.3 | 0.50| 0.05| 2.68| " | |________|_________|______|______|_____|_____|_____|____________| | 12059 | 0.35 | 281 | 1.2 | 0.11| 0.03| 1.66| " | |________|_________|______|______|_____|_____|_____|____________| | 12061 | 0.45 |1,987 | 3.8 | 0.23| 0.08| 4.98| " | |________|_________|______|______|_____|_____|_____|____________| | 12075 | 0.60 | 349 | 2.3 | 0.14| 0.03| 2.04| " | |________|_________|______|______|_____|_____|_____|____________| | 12078 | 0.50 | 272 | 1.5 | 0.03| 0.03| 1.02| " | |________|_________|______|______|_____|_____|_____|____________| | 12080 | 0.80 | 364 | 7.2 | 0.09| 0.04| 0.36| " | |________|_________|______|______|_____|_____|_____|____________| | 12081 | 0.40 | 674 | 3.3 | 0.17| 0.03| 2.04| " | |________|_________|______|______|_____|_____|_____|____________| | 12083 | 0.25 | 257 | 2.3 | 0.09| 0.04| 0.85| " | |________|_________|______|______|_____|_____|_____|____________| | 12089 | 0.65 | 408 | 1.8 | 0.14| 0.09| 3.34| " | |________|_________|______|______|_____|_____|_____|____________| | 12091 | 0.80 | 558 | 3.8 | 0.47| 0.13| 3.28| " | |________|_________|______|______|_____|_____|_____|____________| | 12092 | 0.80 | 262 | 1.6 | 0.19| 0.09| 1.58| " | |________|_________|______|______|_____|_____|_____|____________|
*ind = less than detection limit
Santa Eduwiges Mine: This mine is where the bulk of pilot mining production was done last
year. As development has progressed to deeper levels at Santa Eduwiges
this year, silver grades have increased as Table 1 shows. Development
of Level 10A of the Santa Eduwiges Mine continues to encounter high
grades of silver, as shown in the sample map (http://files.newswire.ca/1167/SantaEduwigesMine.pdf).
Promontorio Mine: Development of the new access ramp has reached Levels 5 and 7 and
accessed the block known as “La Azucarera” (the sugar bowl), which has
an average silver grade of 284 g/t and will provide significant
mineralized rock when production reaches 500 tonnes per day.
Moreover, the Promontorio ramp is nearing level 8 and will reach La
Azucarera in about 150 meters, after which development and mining of
this block will begin. Development of the ramp will then be extended
to level 9 for further development of La Azucarera and nearby veins.
Minerva Mine: This mine is being reopened and is where historically the highest gold
grades have been found in this mining district. Sampling of the
Minerva Mine supports the earlier reported high gold levels in that
mine (see press release of May 10, 2010).
Level 1 of the Minerva Mine, which was sampled in 2010, was re-sampled
this year in order to obtain manganese grades, which had not been
determined during the earlier work. The re-sampling numbers shown
above are within the same range and are consistent with the earlier
reported numbers, the highest of which were 32.7 g/t gold and 2,530 g/t
silver. The Minerva vein is being developed from a new adit located
about 100 m to the north of the sampled area with the objective of
reaching un-mined portions of the vein below the sampled area of Level
La India Mine: This mine is also being reopened. Development in the La India Mine
will result in near-term production from two separate veins, the Durana
and Candelaria veins (http://files.newswire.ca/1167/LaIndiaArea.pdf). The Fatima and Candelaria tunnels are developing the Candelaria
vein at locations about 400 m apart. The Candelaria tunnel has been
developed over a length of 200 m (http://files.newswire.ca/1167/CandelariaTunnel.pdf) and has encountered high grades of gold and silver, as shown in Table
The La India tunnel will eventually be extended about 100 m to reach the
Saturno vein, which will result in production in this mine from three
San Juan Mine: This mine is also in the process of being reopened this year. The San
Juan Mine has been developed and production will commence during the
fourth quarter at a rate of 80-100 tonnes per day.
Milling: At the present, mineralized rock is shipped 35 km to the Company’s
wholly-owned Malpaso mill. Construction of a mill on site will reduce
logistics and transport costs, and it is the Company’s objective to
have a 2,000 tpd mill operating on site by 2015. The decision to
construct a new mill will be subject to an economic study and financing
Method of Analysis
Samples were prepared at the Company’s lab facility at its Malpaso lab
and analyzed by atomic absorption for Cu, Zn, Pb, Bi, Co, Mn, Sb, Cd
and Fe. Gold and silver are analyzed by fire assay method. The
Malpaso laboratory follows the quality control methodology recommended
by CANMET of Canada, such as assaying of blanks, duplicate samples, and
check assays by commercial laboratories such as Chemex.
The technical content of this news release has been approved by Thomas
L. Robyn, Ph.D., CPG, RPG, a Qualified Person as defined in NI 43-101.
About Sierra Metals
Sierra Metals Inc. is a Canadian mining company focused on precious and
base metals from its Yauricocha mine in Peru, its Bolivar mine and Cusi
in Mexico. In addition, Sierra Metals is exploring several precious and
base metal targets in Peru and Mexico. Projects in Peru include Adrico
(gold), Victoria (copper-silver) and Ipillo (polymetallic) at the
Yauricocha Property in the province of Yauyos and the San Miguelito
gold properties in Northern Peru. Projects in Mexico include Bacerac
(silver) in the state of Sonora, La Verde (gold) at the Batopilas
Property in the state of Chihuahua, and Las Coloradas (silver) at the Melchor Ocampo Property in the state of Zacatecas.
The Company’s shares trade on the Bolsa de Valores de Lima and TSXV
under the symbol “SMT”.
This press release does not constitute an offer to sell or solicitation
of an offer to buy the securities in the United States or any other
jurisdiction. The Common Shares will not be and have not been
registered under the United States Securities Act of 1933, as amended,
and may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements.
Neither the TSXV nor its Regulation Services Provider (as that term is
defined in policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this release.
Except for statements of historical fact contained herein, the
information in this press release may constitute “forward-looking
information” within the meaning of Canadian securities law. Other than
statements of historical fact, all statements are “forward-looking
statements”, which involve various known and unknown risk and
uncertainties and other factors, including market conditions that may
affect the Company’s ability to execute its current business plan.
Actual results might differ materially from results suggested in any
forward-looking statements. The Company assumes no obligation to update
the forward-looking statements, or to update the reasons why actual
results could differ from those reflected in the forward-looking
statements unless and until required by securities laws applicable to
the Company. Additional information identifying risks and uncertainties
is contained in filings by the Company with the Canadian securities
regulators, which filings are available at www.sedar.com.
SOURCE Sierra Metals Inc.