Vancouver — A Mexican subsidiary of Hecla Mining (HL-N) has purchased a recovery plant for the San Sebastian gold-silver property in Durango, Mexico.
“This couldn’t be a better project,” says Arthur Brown, Hecla’s CEO. “It’s low-cost, with no significant cash outlay at the outset, and we’re confident we will be able to expand reserves.”
The price tag for the mill came in at US$7.4 million. This is being financed by the International Finance Group through a series of payments over a five-year period. Hecla has secured the loan with the mill and three exploration concessions.
The company expects to produce 1-5 million oz. silver and 25,000-29,000 oz. gold from the San Sebastian area during 2001. The average cash cost over a four-year period is estimated to hit US$1.15 per oz. silver. The 500-ton-per-day agitated cyanide leach mill includes countercurrent decantation and Merrill Crowe precipitation. Equipment for a flotation circuit is also on-site, as well as equipment for refining precipitate to dore.
“We’re optimistic we can turn this into a long-term mining operation,” says Brown. “In the meantime, it is a self-funding exploration project and is expected to return some cash flow to the corporation.”
An in-house estimate puts the indicated resource for the Francine vein at 440,000 tons grading 16 oz. silver and 0.15 oz. gold per ton. In addition, an inferred resource of 800,000 tons grading 10 oz. silver and 0.13 oz. gold is located on the Francine, Profesor, Middle and North veins.
During the fourth quarter of 2000, Hecla cranked out 177,000 oz. silver and 3,400 oz. gold from San Sebastian. The ore was processed on a contract basis at the nearby Velardena mill. Metal recovery came in at 91% for gold and 85% for silver.
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