Mining, Developing & Exploring

Operations / Mexico / Alamo Dorado

Alamo Dorado (100% Ownership)

Click here for map of Alamo Dorado

Project Description and Location

The Alamo Dorado open pit silver mine is located 45 kilometres south-southeast of the town of Alamos in the southeast corner of the state of Sonora, near the border with the state of Sinaloa in northwest Mexico. The mine consists of two contiguous mining concessions, the 509 hectare Alamo Ocho concession and the 4,865 hectare Alamo Dorado concession, and five exploration concessions covering 6,014 hectares, and surface rights covering 763.64 hectares.


There is no record of any modern exploration conducted on the Alamo Dorado mine prior to 1997, nor are there any records of production, although there is evidence of a few old adits in the general area. All recorded drilling at the property has been undertaken since 1997.

Geologists from Minera Corner Bay collected grab samples along a north trending ridge in 1997. After receiving positive assay results from those samples, Minera Corner Bay began a surface sampling program and made an agreement to purchase the Alamo Ocho concession from the previous owners. The surface sampling program outlined a 300 metre long north-south trending silver-gold anomaly situated along the east side of the Cerro Colorado Ridge.

Exploration at Alamo Dorado has been comprised primarily of reverse circulation drill campaigns conducted annually from 1998 to 2001. In 2000, a thorough mapping of surface exposures along drill access roads was undertaken. A more comprehensive 1:2500 scale geological mapping program was conducted in 2001 over an area of about four square kilometres in the project area. The results established the surface extents of the volcanic lithologic units, cross cutting dykes, and alteration patterns.

After acquiring the project, Pan American commenced an updated feasibility study in 2003 based on an updated mineral resource and reserve estimate and a conventional milling and leaching circuit. In 2005, we approved a $17.6 million project to construct the mine. Site construction commenced in April 2005 and completion of the open pit mine and the processing facility was reached in the fourth quarter of 2006. Total construction costs amounted to approximately $81.5 million. Silver production began in 2007 and the mine has since become our largest silver producing mine.

Geology and Mineralization

The Alamo Dorado mine is located in the Sierra Madre Occidental mountain range, a late Cretaceous to Tertiary age volcanic plateau that extends for hundreds of kilometres through northwestern Mexico. The volcanic sequence is divided into the Upper and Lower Volcanic Series. The Lower Volcanic Series is of late Cretaceous to early Tertiary age and consists of up to 1,000 metres of tuffs, flows, and volcanic breccias. The Upper Volcanic Series is of middle Tertiary age and consists of more than 1,000 metres of ash flow and ash fall tuffs that lie unconformably on the Lower Volcanic Series.

A period of particularly active tectonism, including intrusion and uplift, occurred between the deposition of the Lower Volcanic Sequence and the Upper Volcanic Sequence. Uplift and faulting of the Sierra Madre was accompanied by the intrusion of dykes along with the local emplacement of intrusive stocks and batholiths. Mining districts in the Sierra Madre are typically located along sheared and faulted structural zones formed in the Lower Volcanic Series, and to a lesser extent, within the underlying granitic intrusive. After emplacement of the granitic body, the area continued to be a centre of igneous activity, with at least seven distinct dykes or plugs post-dating the granitic intrusion. Uplift of the Sierra Madre continued following volcanism in the Tertiary. Erosion of the uplifted area has resulted in deep canyons and rugged topography.

In the area of the Alamo Dorado concession, the Upper Volcanic Series is present in the higher parts of the surrounding mountains, but has largely been removed by extensive erosion in the region. The rocks hosting mineralization at the mine consist of a sequence of deformed, steeply dipping, Mesozoic aged marine rocks that contain minor intercalated siliceous exhalite and pillow basalt. The Laramide Orogeny event probably caused at least the first phase of deformation which resulted in the development of a strong planar fabric and the metamorphism of the sediments to greenschist facies. Deformation of the rocks at Alamo Dorado was episodic and occurred before, during, and twice after the mineralizing events. The metamorphosed marine sedimentary rocks were intruded by a number of dykes and granodiorite stocks. Silver mineralization is mostly hosted by the metamorphosed volcanic rocks, but weak mineralization also occurs in a post-metamorphic porphyritic diorite dyke.

Stratiform, low sulphidation epithermal mineralization and alteration of the rocks at Alamo Dorado is controlled by a structural zone that has been folded and metamorphosed by regional deformation events. Silver and gold mineralization may have been associated with the emplacement of a diorite feldspar porphyry dyke and/or a granodiorite stock, both of which display hydrothermal alteration and contain silver mineralization.

Hypogene silver mineralization occurs predominantly as argentite with fine disseminated pyrite in quartz veins, within quartz crystals of siliceous gangue, and within fractures in siliceous gangue. It also occurs as tetrahedrite intergrown with pyrite, galena, and sphalerite. In the upper oxide environment the silver mineralization occurs in the form of silver chloride minerals, acanthite, and silver sulphosalts.

Mineral Resource and Mineral Reserves

Management estimates that the Proven and Probable mineral reserves for the Alamo Dorado mine, as at December 31, 2013, are as follows:

Alamo Dorado Mineral Reserves 1, 2

Reserve Category Tonnes (Mt) Grams of Silver per tonne Contained Ag (Moz) Grams of Gold per tonne Contained Au (Koz)
Proven 4.4 68 9.7 0.29 41.0
Probable 0.7 88 2.0 0.61 13.8
TOTAL 5.1 71 11.7 0.33 54.8


1. Estimated using a price of $22 per ounce of silver and $1,300 per ounce of gold.

2. Mineral Reserve estimates for Alamo Dorado were prepared under the supervision of, or were reviewed by, Michael Steinmann, P.Geo., and Martin G. Wafforn, P.Eng., as Qualified Persons as that term is defined in NI 43-101.

Management estimates that mineral resources at Alamo Dorado, as at December 31, 2013, are as follows:

Alamo Dorado Mineral Resources 1, 2

Resource Category Tonnes (Mt) Grams of Silver per tonne Contained Ag (Moz) Grams of Gold per tonne Contained Au (Koz)
Measured 1.0 43 1.3 0.22 6.8
Indicated 1.2 78 3.1 0.40 15.9
Inferred 0.0 39 0.0 0.54 0.0


1. These mineral resources are in addition to Alamo Dorado mineral reserves. Mineral resources were constrained within a pit shell using a price of $35 per ounce of silver and $1,400 per ounce of gold.

2. Mineral resource estimates for Alamo Dorado were prepared under the supervision of, or were reviewed by, Michael Steinmann, P.Geo., and Martin G. Wafforn, P.Eng., as Qualified Persons as that term is defined in NI 43-101.

Mineral reserve estimates are based on a number of assumptions that include metallurgical, taxation and economic parameters. Increasing costs or increasing taxation could have a negative impact on the estimation of mineral reserves. There are currently no known factors that may have a material negative impact on the estimate of mineral reserves or mineral resources at Alamo Dorado.

Mining and Processing Operations

Alamo Dorado is a conventional surface mine that utilizes hydraulic shovels, front end loaders, and mechanical trucks on benches 5 metres high. The mine has been sequencing towards an expansion to the northwest of the deposit. Ore control is carried out by sampling blast holes to provide closer spaced sample data for marking the ore and waste boundaries during mining. The mine stockpiles low grade and mineralized waste material. High grade material is processed first to maximize the return on investment. The mine life based on the current mineral reserves and processing rate is estimated to be 4.5 years.

Ore is treated by conventional crushing and semi-autogenous and ball mill grinding followed by thickening, agitated cyanide leaching, leach residue filtration, direct electrowinning to produce a cathode sludge, AVR (acidify, volatilize, and re-neutralize) cyanide recovery and recirculation, leach residue washing with AVR product solutions, dry stack tailings, and conventional silver and gold doré production from melting of the cathode sludge. The nominal design treatment rate is 4,000 tonnes per day of ore on a 24 hour per day schedule, but Alamo Dorado regularly exceeds this processing rate. The mine’s tailings treatment process recovers approximately 97.5% of the sodium cyanide used and also neutralizes mill tailings, thus reducing the mine’s environmental impact and reclamation costs. During 2013, Alamo Dorado processed 1.8 million tonnes of ore, producing 5.0 million ounces of silver and 17,600 ounces of gold with metallurgical recoveries of 87% for silver and 89% for gold.

Capital expenditures at Alamo Dorado in 2013 totalled $7.6 million.

Activities in 2014
In 2014, we anticipate producing between 3.75 and 3.80 million ounces of silver and between 17,000 and 19,000 ounces of gold.

In 2014, we expect total capital expenditures to drastically decrease to $0.5 million. These capital expenditures will primarily be used for tailings dam and laboratory equipment replacements.


The original environmental permitting work for Alamo Dorado considered options developed for the 2002 feasibility study, and was provided by Corner Bay in conjunction with Aguayo Consultoría Ambiental, Corner Bay’s environmental consultant and coordinator. An EIS and risk assessment study, as well as ancillary documents were submitted by Corner Bay to SEMARNAT to identify potential major deficiencies and for appropriateness for permitting Alamo Dorado. SEMARNAT recommended a finding of no significant impact in the original impact statement/permitting document. Following completion of the updated feasibility study, the original EIS and risk assessment study documents were revised, resubmitted and approved by SEMARNAT. Project construction commenced in 2005 based on the approved EIS and an improved modification of the SEMARNAT Temporary Land Use Permit for the operation of a milling operation and disposal of non-toxic tailings in a dry stack tailings area.

MCB had an agreement with SEMARNAT for compensation activities for mitigation of the environmental impact of the Alamo Dorado project. MCB conducted its compensation activities on schedule during the term of the agreement (2005-2007) and within the framework of its agreement with SEMARNAT. Confirmation was received in August 2007 from SEMARNAT acknowledging the end of the third and final stage of the agreement.

The main environmental focus at the Alamo Dorado property is the stability of the tailings facility and mine water discharges.

Alamo Dorado has voluntarily participated in the PROFEPA “Clean Industry” Program which involves independent verification of compliance with all environmental permits and the implementation of good practice environmental management procedures and practices. All requirements of the program have been complied with and Alamo Dorado expects to be certified by PROFEPA in 2013.

A closure cost estimate for Alamo Dorado was prepared according to State of Nevada approved SRCE methodology in 2011 and is updated every year. We have estimated the present value of reclamation costs for the Alamo Dorado property at December 31, 2012 to be approximately $3.7 million.

Health and Safety

In 2005, an emergency response plan was developed for the Alamo Dorado project. The detailed plan outlines responses to safety and environmental emergencies. In 2006, Alamo Dorado completed MSHA (Mine Safety and Health Administration) training for all of our employees. In February 2007, a formal safety audit of the Alamo Dorado mine was completed by a third party consultant and Pan American’s Director of Health and Safety, followed annual audits including an internal audit conducted in October 2011. During 2013, personnel employed at Alamo Dorado attended approximately 10,300 hours of safety related training. Alamo Dorado was awarded the “Casco de Plata” award in the open pit category for the best safety record in Mexico during 2008 and during 2010. The mine has recorded only one LTI since the start of the project.

Operating highlights

2013 2012 2011
Tonnes milled (millions) 1.8 1.7 1.8
Silver million ounces 5.1 5.4 5.3
Copper tonnes 123 117 66
Gold ounces 17,600 17,966 16,607
Cash cost per ounce1 $7.45 $5.05 $4.80

1.Net of by-product credits. For purposes of calculating 2013′s cash costs, the Company used the following price levels for its by-product production: Cu $7,000/tonne, Au $1,200/oz.