This Preliminary Economic Assessment evaluates a staged increase in mill throughput at the Bolivar Mine in Chihuahua, Mexico, using existing processing infrastructure and proposed expansions.
Report context
The Preliminary Economic Assessment (PEA) for the Bolivar Mine was prepared with an effective date of December 31, 2019, and a report date of October 19, 2020. The Bolivar Property is owned by Sierra Metals and consists of 14 mineral concessions (approximately 6,800 ha) in the northern Mexican state of Chihuahua. The Property is in the Piedras Verdes mining district, 400 km south by road from the city of Chihuahua and roughly 10 km southwest of the town of Urique. The Property includes the Bolivar Mine, an historic Cu-Zn skarn deposit that has been actively mined by Sierra Metals since November 2011, as well as the Piedras Verdes processing plant, situated approximately 5 km by road from the mine.
Processing route
Proposed design
The PEA evaluated a conventional concentration plant consisting of crushing, grinding, flotation, thickening, and filtration of the final concentrate. The proposed design to increase throughput to 10,000 tpd (targeted for 2024) would require a temporary shutdown to overhaul equipment, purchase of mobile jaw and cone crushers, and overhaul and reintroduction of idle equipment. The plant expansion capital was estimated at US$67,500,000. The processing plant can be adapted to process 10,000 tpd. The PEA considered the use of tailings as backfill and included capital and operating costs for a backfill plant.
Historical operating data
The Piedras Verdes processing facilities started operating in November 2011 at 1,000 tpd of nominal throughput. The mineralized material processing capacity was expanded to 2,000 tpd in mid-2013. The mill has been upgraded since and the current nominal throughput capacity is 3,500 tpd although the mine has exceeded this throughput on many occasions and in 2020 has achieved 5,000 tpd.
During 2019, the Piedras Verdes processing plant consistently produced copper concentrate of commercial quality with copper grade ranging between 21.7% Cu to 28% Cu, silver content in concentrate ranging from 392 g/t to 677 g/t, and gold content in concentrate ranging from 3.2 g/t to 7.9 g/t. Metal recovery for copper, silver, and gold averaged monthly 82.9%, 78.3% and 62.3%, respectively.
During 2019, production of copper concentrate consistently ranged between approximately 2,370 t/m and 3,850 t/m, equivalent to roughly a 2.9% mass pull. The monthly average concentrate consistently reached commercial quality with copper grade averaging 24.1% Cu and credit metals content in concentrate averaging 531.6 g/t silver and 5.57 g/t gold.
Run of mine mineralized material feed in 2019 totaled 1,269,697 t, equivalent to an average of 105,000 tonnes per month, or 3,500 tpd. The plant has repeatedly demonstrated that it can process 5,000 tpd and is doing so in 2020.
Flotation tails are disposed of in a conventional tailings facility and future tailings (mid-2020) will be deposited as dry-stack tailings. The site is installing an additional thickener and filter presses to allow additional water recovery. Thickened tails (60% solids) are being placed currently. After the filter presses are constructed, dry-stack tailings will be placed in the TSF starting in the latter part of 2020.
Testwork
The PEA references metallurgical testing conducted as part of the mineral processing and metallurgical testing program. The recovery estimate assumptions used in the PEA are: Cu at 88% recovery; Ag at 78.6% recovery for Mineral Resource estimation and 78.7% for NSR factors; Au at 62.9% recovery for Mineral Resource estimation and 62.43% for NSR factors.
Net Smelter Return factors used in the economic analysis include: Cu at US$48.8171/t/%, Ag at US$0.4444/t/g/t, Au at US$28.1940/t/g/t. Concentrate grades used in NSR calculations: Cu 25%, Ag 570 g/t, Au 6.8 g/t.
Key reported parameters
| Parameter | Value (Proposed Design) | Value (Historical Actual) | Basis |
|---|---|---|---|
| Mill throughput | 10,000 tpd (2024 target) | 3,500 tpd (2019 average); 5,000 tpd (2020 achieved) | Design; actual |
| Copper recovery | 88% | 82.9% (2019 monthly average) | Testwork; actual |
| Silver recovery | 78.7% | 78.3% (2019 monthly average) | NSR factor; actual |
| Gold recovery | 62.43% | 62.3% (2019 monthly average) | NSR factor; actual |
| Concentrate copper grade | 25% | 24.1% (2019 monthly average) | Design; actual |
| Concentrate silver grade | 570 g/t | 531.6 g/t (2019 monthly average) | Design; actual |
| Concentrate gold grade | 6.8 g/t | 5.57 g/t (2019 monthly average) | Design; actual |
| Plant expansion capital | US$67,500,000 | Not applicable | Proposed |
| Tailings management | Dry-stack tailings (from mid-2020); backfill plant considered | Thickened tails (60% solids) currently; conventional TSF in operation since 2011 | Proposed; actual |
Project website: https://miningdataonline.com/property/1011/Bolivar-Mine.aspx
Project website: https://www.tierragroupinternational.com/projects/bolivar-mine
Project website: https://quantecgeo.com/dia-bras-plans-major-geophysical-surveys-at-its-bolivar-property/
Technical qualifications
The reader is reminded that PEA studies are indicative and not definitive and that the resources used in the proposed mine plan include Inferred Resources that are too speculative to be used in an economic analysis, except as allowed for by NI 43-101 in PEA studies. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no certainty that Inferred Resources can be converted to Indicated or Measured Resources or Mineral Reserves, and as such, there is no certainty that the results of this PEA will be realized.
A Mineral Reserve has not been estimated for the project as part of this PEA. The PEA includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves.
The operating cost estimate is based on site specific data and has been factored to account for an expansion to 10,000 tpd. The economic analysis for this PEA was prepared by Sierra Metals and reviewed by SRK. The analysis is based on Mineral Resources only and includes Inferred Mineral Resources.
The report notes that there is a high level of month-to-month variability for both tonnes and head grade input to processing. Additional work is needed in the processing facilities to stabilize the operation, including implementation of a preventive maintenance program and training programs to improve operators’ skill.
Source: Preliminary Economic Assessment, Bolivar Mine, Mexico, effective December 31, 2019, report date October 19, 2020. Sections 1.4, 1.8, 1.11, 1.12, 1.13.2, 13, 17.
