Dolores is an open pit silver-gold mine located in Chihuahua, Mexico, and was acquired in 2012 as part of Pan American’s acquisition of Minefinders Corporation Ltd.
- Location: Chihuahua, Mexico
- Mine Type: Open Pit
- Ownership: 100%
- Products: Silver and gold doré
- Capacity: 16,200 tpd
- Deposit Type: Epitermal veins, stockworks, breccias, and replacements
Silver and gold mineralization is present as structurally controlled, low to medium sulphidation epithermal veins, silica stock works, breccias, and replacements. Mining at Dolores is currently by standard open pit methods using shovels, loaders, and haul trucks. The mine currently uses conventional cyanide heap leaching technology to produce gold and silver doré.
In May, 2015 the Board of Directors approved an expansion project that, when completed, will include the construction of a pulp agglomeration treatment plant and an underground mine. Underground mining is expected to occur concurrently with open pit mining, and will be developed to commence production using open stoping mining methods at approximately the same time as the pulp agglomeration plant installation is completed. A preliminary underground schedule based on the underground mine plan targets a production rate of approximately 1,500 tpd to feed the pulp agglomeration circuit in tandem with the high grade portion of the material from the open pit mine. The planned schedule indicates underground development commencing in 2015 with full production achieved in 2018 and a mine life of approximately 12 years, including construction time. The projected mine life of the expanded operation may increase if additional mineral resources are defined and can be converted to mineral reserves.
The expansion project involves increasing the overall processing rate from 16,200 tpd to 20,000 tpd by processing the high grade portion of the mined material through a pulp agglomeration treatment plant and conveying the agglomerated material with the crushed lower grade portion of the mined material to the heap leach pads for leaching. The pulp agglomeration plant will be comprised of crushing, grinding, particle size classification, thickening, filtration, agglomeration, and reagent facilities. The pulp agglomeration process of liberating metals by grinding has the advantage of improved leaching kinetics and ultimate recovery of precious metals in the high grade ore relative to the current heap leach method. The improvement in recovery of the high grade fraction due to pulp agglomeration is estimated at around 19% for silver and 13% for gold. This results in an overall improvement in metal recovery of around 7% for both silver and gold for the entire mineral inventory.
The Company anticipates meeting a scheduled start-up of the pulp agglomeration plant by mid-2017, while ramping-up underground operations to the full 1,500 tpd design capacity by the end of 2017. Apart from the expansion project, the projects team has also initiated the next phase of the leach pad sustaining capital expansion at Dolores, which is scheduled for completion by mid-year 2016, and will provide an additional 18 million tonnes of ore stacking capacity.
The Dolores expansion project is anticipated to require total incremental capital of approximately $112.4 million and sustaining capital over the life of the mine of approximately $173.9 million. At metal prices of $16 per ounces of silver and $1,100 per ounce of gold, the incremental after tax net present value is estimated at $38.8 million at a 10% discount rate, with an internal rate of return of 19.9%, and a payback period of 3.1 years. At metal prices of $19 per ounce of silver and $1,200 per ounce of gold, the incremental after tax net present value is estimated at $65.6 million at a 10% discount rate, with an internal rate of return of 27.4% and a payback period of 1.7 years.
The Dolores Technical Report, on which the foregoing is based, is a preliminary economic assessment. The results of this preliminary economic assessment are preliminary in nature, in that it includes inferred mineral resources that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the assessment will be realized. Mineral resources that are not mineral reserves have no demonstrated economic viability.
For more information on Dolores operations, please see our most recent Quarterly Report.