Sierra Madre Gold and Silver (SM.V) has confirmed the test mining and processing phase at its La Guitarra silver mine in Mexico. The plant has been in operation since June 25 and has processed almost 6,000 tonnes of rock and is currently running at 259 tonnes per day which is just over half its total official capacity of 500 tonnes per day. That 500 tpd rhythm will likely be achieved sometime in the fourth quarter of this year. The mine (and plant) currently employ almost 200 people and a substantial amount of them are locally hired ànd have previous work experience at La Guitarra.
There was an existing stock pile but the mining activities have started as well with four operating scoop tramps, a jumbo drill and a haul truck which are now all working in tandem using long hole and shrinkage mining techniques. Sierra Madre also disclosed the availability of its equipment was 88%, which is pretty good especially during the startup phase when teething problems are to be expected.
The current test mining phase will be important for the company to determine its plan forward. As a reminder, the average grade of the indicated resource at La Guitarra is just over 7 ounces of silver-equivalent per tonne of rock, so if/when the company reaches the 500 tpd milestone, it will be on track to produce a meaningful amount of silver and gold (in a 70/30 ratio) and the current precious metals prices will definitely be a tailwind.
Disclosure: The author has a long position in Sierra Madre. Sierra Madre is a sponsor of the website. Please read the disclaimer.
