San Vicente

San Vicente

San Vicente is an underground silver-zinc mine located in Potosí, Bolivia.

Highlights

  • Location: Potosí, Bolivia
  • Mine Type: Underground
  • Ownership: 95.0%
  • Products: Silver rich zinc and lead concentrates
  • Capacity: 750 tpd
  • Deposit Type: Epithermal veins
San Vicente Map

Pan American holds a 95% interest in Pan American Silver Bolivia (“PASB”). The remaining 5% of PASB is owned by Urion Holdings (Malta) Ltd., an affiliate of Trafigura Baheer B.V. PASB has a joint venture agreement (Contrato de Riesgo Compartido) with Corporación Minera de Bolivia (“COMIBOL”) the state mining company of the Plurinational State of Bolivia, pursuant to which PASB holds a 62.5% interest in the cash flow from the operations and is the operator of the San Vicente Property. Silver, zinc, and lead mineralization is present as epithermal veins, replacements in brecciated conglomerates, and mineralization in dacitic dykes.

Ore is extracted at the San Vicente underground mine using conventional shrinkage stoping and long hole mining.

San Vicente operates a 750 tonne per day nominal capacity plant using a standard flotation process to produce a silver-zinc concentrate and a silver-lead concentrate.

Operating Update

In 2015, a total of 348,200 tonnes of ore were processed with metallurgical recoveries of 92.6% for silver, 77.5% for zinc, and 80.5% for lead. Total metal production for the year was approximately 4.3 million ounces of silver, 7,200 tonnes of zinc, and 900 tonnes of lead.

San Vicente achieved record silver production of 4.1 million ounces in 2015, which was 4% higher than in 2014 due to higher throughputs which, when combined with higher base metal grades, also drove zinc production 17% higher to 6,800 tonnes, and lead production 68% higher to 800 tonnes.

2015 cash costs of $11.57 per payable ounce of silver declined 12% aided by lower royalties due to lower metal prices, along with higher zinc and lead by-product production, which were offset by the lower by-product metal prices.

2015 all in sustaining costs per silver ounce sold (“AISCSOS”) decreased by 14% to $11.91 from $13.78 in 2014. This decrease was primarily attributable to the lower royalty costs and treatment and refining charges that resulted from lower metal prices and increased by-product credits, which more than offset a 4% decrease in the number of silver ounces sold.

For a more detailed discussion of cash costs and AISCSOS and their calculations, readers should refer to the “Alternative Performance (non-GAAP) Measures”, section of the Company’s Management’s Discussion & Analysis for the year ended December 31, 2015.

2016 Forecast

Throughput rates at San Vicente are expected to increase up to 4% in 2016 while silver grades and recoveries are expected to be consistent with 2015 levels. The aggregate expected effect to 2016 silver production for the Company is a 4% to 6% increase to between 4.30 million and 4.35 million ounces, from the 4.1 million ounces produced in 2015. The increased throughput, improved zinc recoveries, and improved zinc grades are expected to drive increased zinc by- product production for the Company by 8% to 10%.

Expected 2016 cash costs per payable ounce of silver of between $11.25 and $11.75 are comparable to the 2015 cash costs of $11.57 per ounce, due primarily to the offsetting effects of expected increased operating costs and lower by-product metal prices on the positive effects of expected increased silver production, improvement in zinc production, and reductions in royalties from reduced metal prices.

The expected sustaining capital at San Vicente in 2016 is between $3.0 million and $4.0 million, which is consistent with the $3.3 million of sustaining capital in 2015. Major components of 2016 sustaining capital budget include $1.0 million on brownfield exploration, $0.7 million on mine equipment refurbishment and replacements, $0.4 million on a ventilation raise, and $0.3 million on environmental related expenditures including a water treatment plant.

AISCSOS at San Vicente for 2016 is expected to be between $12.00 and $13.30, comparable to the $11.91 AISCSOS reported in 2015. The same offsetting factors affecting cash costs along with expected sustaining capital investments are expected to result in a slight increase to AISCSOS.

For a more detailed discussion of cash costs and AISCSOS and their calculations, readers should refer to the “Alternative Performance (non-GAAP) Measures”, section of the Company’s Management’s Discussion & Analysis for the year ended December 31, 2015.

Cautionary Note Regarding Forward Looking Statements

Mineral Reserves & Resources

Management estimates that mineral reserves at the San Vicente mine, as at December 31, 2015, are as follows:

San Vicente Mineral Reserves1,2,3

Reserve CategoryTonnes (Mt)Grams of Silver per tonne% Zinc% Lead
Proven2.04822.660.35
Probable0.45112.240.48
TOTAL2.44872.590.37

Notes:

  1. Estimated using a price of $17.00 per ounce of silver, $1,800 per tonne of zinc and $1,800 per tonne of lead.
  2. Mineral reserve estimates for San Vicente were prepared under the supervision of, or were reviewed by, Martin Dupuis, P.Geo., and Martin G. Wafforn, P.Eng., who are Qualified Persons as that term is defined in NI 43-101.
  3. Tonnes are shown for 95% of the San Vicente property as Pan American holds a 95% interest in PASB.

Management estimates that mineral resources at the San Vicente mine, as at December 31, 2015, are as follows:

San Vicente Mineral Resources1,2,3

Resource CategoryTonnes (Mt)Grams of Silver per tonne% Zinc% Lead
Measured0.91942.120.15
Indicated0.22072.570.16
Inferred2.23182.330.30

Notes:

  1. These mineral resources are in addition to mineral reserves. Estimated using a price of $17.00 per ounce of silver, $1,800 per tonne of zinc and $1,800 per tonne of lead.
  2. Mineral resource estimates for San Vicente were prepared under the supervision of, or were reviewed by, Martin Dupuis, P.Geo., and Martin G. Wafforn, P.Eng., who are Qualified Persons as that term is defined in NI 43-101.
  3. Tonnes are shown for 95% of the San Vicente property as Pan American holds a 95% interest in PASB.

Click here to see Pan American’s full mineral reserves and resources at December 31, 2015
Mineral reserves and resources are as defined by the Canadian Institute of Mining, Metallurgy and Petroleum.
Mineral resources that are not mineral reserves have no demonstrated economic viability.
Cautionary Note to US Investors

Technical Information

San Vicente Technical Report