Bunker Hill surpasses 2,000 tons per day

At a time when many other base metal producers are paring back production or closing operations outright, Bunker Hill Mining (TSE) is continuing efforts to increase throughput. Production at the company’s lead- zinc-silver mine in Idaho’s Coeur d’Alene mining district reached as high as 2,300 tons per day in January.

Jack Kendrick, president of Bunker Hill, noted that he expected the mine to reach a target production rate of 3,000 tons per day (mining five days per week) by mid-year. He added that with the increase in production, mining and milling costs should drop to about US$22 per ton from the current level of about US$30 per ton.

At full production Kendrick expected yearly concentrate sales to reach 70,000 tons of 55% zinc concentrate and 25,000 tons of lead- silver concentrate grading 58% lead and 30 oz. per ton silver.

Although Kendrick has some concern over the trend in zinc prices, he noted that the company still has lots of room to manoeuvre with an estimated break-even price of US40 cents per lb.

Mill recoveries have been excellent, running 88% for zinc, 92% for lead and 95% for silver. Kendrick said the recoveries were augmented by a real time analyzer installed in the third quarter of 1989 at a cost of US$500,000.

Reserves in all categories at the mine total 11 million tons grading 6% zinc, 2% lead and 1.25 oz. silver.

In addition to the Bunker Hill mine, the company owns the nearby Crescent silver mine. Although this mine could be operated at a profit at current silver prices, Bunker Hill has opted to hold the mine on a care and maintenance basis in anticipation of higher silver prices at some point in the future.

The Crescent has total reserves of 170,000 tons grading 23 oz. and could be brought back into production within 30 days. Mining and milling costs for the operation are estimated at $80 per ton. The Bunker Hill mill has a separate circuit for Crescent ore with a rated capacity of 200 tons per day.

Recently trading at a 52-week low of $2 per share, Bunker Hill has about 16 million shares outstanding.