VANCOUVER, March 27, 2014 /PRNewswire/ – Sierra Metals Inc. (TSX:SMT)(BVL:SMT) (“Sierra Metals” or the “Company”) is pleased to announce an updated silver resource estimate on its Cusihuiriachic property (“Cusi”), Chihuahua State, Mexico. These resources are in two areas of the Cusi Mine currently in commercial production, Promontorio and Santa Eduwiges, as well as in other mines where the Company is doing underground development, such as La Gloria/Minerva, Monaco/Milagro and others. This resource estimate was prepared by Gustavson Associates, LLC (“Gustavson”) of Lakewood, Colorado.
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“These results are a very important milestone for Sierra Metals’ growth plans in silver production”, stated Daniel Tellechea, President & CEO of Sierra Metals. “Silver resources at our Cusi Mine have increased significantly in volume and quality to a level that provides strong justification for a prefeasibility study contemplating an important expansion of production capacity from our current 400-500 tonne per day levels.
”We are adding value to Sierra Metals by delivering a rapid growth in high-quality silver resources at Cusi in an exploration drive that we believe is still far from over given the size of the silver mining district, the increased access to wider zones of high-grade mineralization at depth, and multiple mining and development fronts that Sierra Metals has been opening over the past two years.”
“Sierra Metals has consistently increased resources annually in our three mines: Yauricocha in Peru, Bolivar in Mexico and Cusi in Mexico.”
In 2014, investment in mine infrastructure and equipment (shafts, headframes, hoists and mine trackless equipment) will be done with the objective to increase future production and reduce cash production costs. Also, this year, the exploration program will consist of continued drilling, both surface and underground, underground development and detailed surface mapping and sampling in high-priority areas identified during the 2013 surface exploration program.
The Cusi Mine produced 423,000 ounces in 2013 mostly from processing development rock with an average grade of 167 grams of silver per tonne. The average throughput in 2013 was 305 tonnes per day at our Malpaso mill. Current throughput continues to increase and is well on track to reach the production goal of 500 tonnes per day this year.
This resource estimate report incorporates drilling and underground sampling done from January 1 to December 31, 2013. Since the last resources report (filed on August 23, 2013), a total of 24,776 metres was drilled; 20,415 meters from surface and 4,361 meters underground.
Methods of Estimation
The effective date of this resource estimate is December 31, 2013. The mineral resource estimate was completed by Gustavson. Thomas Matthews, MMSA QP, Senior Resource Geologist with Gustavson, is the Qualified Person responsible for this resource estimate. The resource estimation method used at Cusi is based on interpreted wireframes encompassing a series of mineralized structural zones. Within each zone, resource has been estimated using ordinary kriging. Gustavson considers the resource to meet industry standard practices, and to be CIM and NI 43-101 compliant.
Table 1: Indicated Resources of the Cusi Project at 90 gpt Ag cutoff
|Tonnes|| Ag grade |
|Total Indicated |
Table 2: Inferred Resources of the Cusi Project at 90 gpt Ag cutoff
|Tonnes|| Ag grade |
|La Gloria/ Minerva||309,000||178.5||1,774,000||0.11||0.2||0.07|
|Total Inferred |
Resources are presented at a 90 g/t silver cutoff, which corresponds to the economic cutoff grades used for the current operations at the Cusi Mine. This reflects an average silver price of $22 per ounce and metallurgical recoveries for silver of 79%. Cusi is a primary silver mine, with gold, lead, and zinc credits. Resources are presented for all four potentially economic metals.
Quantity and grade are estimates and are rounded to reflect the fact that the resource estimate is an approximation. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted to mineral reserves. Quantities may not sum due to rounding.
The Cusi property has an historical production of 100-200 million ounces of silver between 1680 and 1940. Production was interrupted multiple times by Indian raids, wars, revolution, depression, etc. Historical operators needed grades of 1,000 g/t silver or more to be economic and many areas were left un-mined. There are multiple high-grade silver veins open to depth.
In 2012, pilot mining production at Cusi processed 84,028 tonnes at 157 g/t silver (avg. 240 tpd). Commercial production was announced on January 1, 2013 and mined 106,856 tonnes at 167 g/t (average daily throughput 305 tpd) that year. Mining is done by cut-and-fill method. The Company plans to release a National Instrument 43-101 (“NI 43-101”) complaint resources report in Q2 2014.
The Company’s objective for the Cusi property in 2014 is to advance underground development at five mines – the Santa Eduwiges, Promontorio, La India, La Gloria/Minerva and Milagro/Monaco mines – to allow mining and development both laterally and at depth. This will bring the total of producing mines at the Cusi project to five. Management believes that Cusi is only starting to reveal its full silver potential.
Method of Analysis
Drill samples were prepared at the ALS Chemex lab facility in Chihuahua, Mexico, and analyzed by ICP and AA methods at their facilities in Vancouver, Canada. Diamond drill samples sent for analysis consisted of NQ-size and BQ-size diamond core split on site, prepared by the ALS Chemex sample preparation laboratory in Chihuahua, Mexico, and assayed for Au by 50g fire assay with AA finish. Assays for Ag, Pb, Zn, Cu and trace elements are analyzed by Induction Coupled Plasma (ICP-41) on 50g split sample at the ALS Chemex North Vancouver Laboratory. Over-limits of Ag and base metals are assayed by OG-46 method. Higher results of Au & Ag are assayed by GRA-21 method.
The quality assurance-quality control (QA-QC) of Sierra Metals at Cusi has been described in detail in Gustavson’s NI 43-101 report dated August 23, 2013.
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 Mine in Mexico. In addition, Sierra Metals is exploring several precious and base metal targets in Peruand 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 thestate 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 the Toronto Stock Exchange under the symbol “SMT”.
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 atwww.sedar.com.
SOURCE Sierra Metals Inc.