Cusi Mine Restart: Silver is Back and so is Sierra Metals’ Silver Production!

Restart of Production at Cusi Mine

On Tuesday July 28th Sierra Metals (NYSE:SMTS, TSX:SMT) announced that it has restarted operations and production at their Cusi Silver Mine in Mexico.  The mine has been in care and maintenance since April 1st, 2020 due to the government mandated shutdown of mining operations in the country because of COVID-19.

The management team expects to ramp-up ore throughput to a targeted rate of 1,200 tonnes-per-day by the end of the year.

During the care and maintenance period the company completed an optimized review of the entire operation at Cusi, the changes implemented include the following:

  • Updated interpretation of the geological system at the Santa Rose de Lima structure (stockwork tonnage system to a vein model system). This change will improve head grades and reduce dilution.
  • Mine development to bypass the previously announced area of subsidence and provide access to economic ore.

New Silver Zone a Game Changer

As we’ve highlighted on June 23rd, 2020, the newly discovered silver vein system at Cusi is a game changer for the mine, suggesting potential for reinterpretation of the geology and extensions of previously understood areas of mineralization.

The company is currently mining at 180 g/t silver at Cusi, the recent drill results are materially higher, which include: 428 g/t, 304 g/t and 1,140 g/t.

The company is planning to drill an additional 1,000 meters to better understand the mineralization of the new zone.  As of its last 43-101 report (Dec. 2017), Cusi had over 4 millions tonnnes of mineral resource (measured and indicated) with an average silver grade of 224 grams per tonne providing for contained metal of 59 million silver ounces.

Silver Production is a Big Contributor for Sierra Metals

In 2019, Sierra Metals produced a total of 3.4 million ounces of silver from its three main mines:

  • Yauricocha Mine (Peru): 1.8 million ounces
  • Cusi Mine (Mexico): 936,000 ounces
  • Bolivar (Mexico): 640,000 ounces

The combination of this large stream of production, the exploration upside at Cusi and higher prices will make silver a significant contributor of overall revenues at Sierra Metals.


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