| Alamo Dorado Project, Mexico (100%)
The Alamo Dorado deposit is located in northern Mexico in the state of Sonora, approximately 200 miles from the state capital of Hermosillo.
History:
Corner Bay Silver, a Toronto-listed exploration company, began grassroots reconnaissance of the area in 1997, received encouraging surface mapping and assay results and conducted the first phase of confirmation drilling in mid-1998. In 1999 a preliminary resource was calculated and a scoping study prompted further infill drilling and metallurgical testing. Pan American Silver acquired Corner Bay and the Alamo Dorado project in February, 2003.
In 2004 Pan American revised the geological model of the deposit and initiated an alternative development plan for the property. In February, 2005 Pan American announced a positive production decision on the project based on its strong economics at then current silver prices and the positive outlook for long-term prices. In the second quarter of 2005, Pan American began construction of a primary crushing circuit, SAG ball mill, conventional cyanide leach recovery circuit and a dry, stackable tailings system. The mine also employs a tailings treatment process called AVR which neutralizes mine waste, thus reducing the mine’s environmental impact and future reclamation costs.
2006 - 2007
Construction of the mine was completed in November 2006, and commercial production began in April 2007.
Capital costs for the project to the end of 2006 were $81.5 million, within 6% of feasibility estimates. Alamo Dorado is expected to produce on average approximately 4.3 million ounces of silver and 10,000 ounces of gold annually over the life of mine, at an average cash cost of $2.82/oz of silver, net of gold by-product revenues.
Production from Alamo Dorado will generate approximately 75 percent of its revenue from silver with the remainder from gold, further strengthening Pan American's status as the premier primary silver producer.
Production Statistics:
| |
2007 |
|
|
| Tonnes Milled |
1,140,000 |
|
|
| Silver ounces |
3,809,000 |
|
|
| Gold ounces |
13,335 |
|
|
| Cash Cost per ounce |
$4.41 |
|
|
Mineral Reserves:
|
Tonnes |
Silver Grade
(g/tonne) |
Contained Silver
(ounces) |
Proven |
1,775,000 |
98 |
5,608,000 |
Probable |
9,444,000 |
114 |
34,605,000 |
Total |
11,219,000 |
106 |
40,213,000 |
Calculated as at December 31, 2007 using the silver price of US$11.00 /ounce.
Mineral reserve estimates for Alamo Dorado were prepared under the supervision of or were reviewed by Michael Steinmann, P.Geo., Senior Vice President Geology & Exploration, and Martin G. Wafforn, P.Eng., Vice-President of Mine Engineering, as Qualified Persons as that term is defined in National Instrument 43-101-Standards of Disclosure for Mineral Projects.
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