Silverco tables PEA results for Cusi mine in Mexico
Silverco Mining Ltd. [SICO-TSXV, SICOF-OTCQB] has confirmed in a preliminary economic assessment (PEA) of the Cusi mine in Mexico that a low-capital restart and annual production of 2.5 million ounces of silver are possible. Restart of processing is targeted for late 2026 with a full-year ramp up by 2027.
The mine has an after-tax net present value of $104 million and an internal rate of return of 94% with payback in nine months at base case silver price of US$44.58 an ounce. “We believe the PEA confirms Cusi as one of the most compelling primary silver restart opportunities globally,’’ said Silverco President and CEO Mark Ayranto.
With low upfront capital, rapid payback and strong leverage to rising silver prices, Cusi is positioned to deliver near-term production and cashflow. Importantly, ongoing drilling and restart work provide clear upside to both scale and mine life,’’ said Ayranto. “We have sufficient funds currently on hand to finance the restart and continue our previously announced 30,000-metre drill program that is testing for on strike and downthrown extensions, in addition to infill drilling.”
He went on to say that work is also underway at the mine and mill to support the restart, including dewatering and mine rehabilitation, hiring of key discipline managers and commencement of the bid process for an underground mine contractor.
The PEA envisages less than US$20 million in upfront capital expenditures for 2.5 million ounces per year of production at an all-in-sustaining cost (AISC) of US$26.75 an ounce.
The Cusi underground mine is located approximately 120 kilometres west of the city of Chihuahua and 20 kilometres south of Cuauhtomoc city. The location allows for access to an experience labour pool with a population of more than 1.0 million people. Ore will be transported from the mine via 30-tonne highway trucks to the company’s existing 1,200 tonne per day processing facility, located approximately 40 kilometres from the mining areas. The mine utilizes a conventional comminution and flotation circuit designed to produce a high-value bulk lead-silver concentrate.
Silverco Mining shares eased 2.9% or 31 cents to $10.20 in early trading Monday. The shares trade in a 52-week range of $16.67 and $1.60.
Commercial production under Sierra Metals at Cusi began in 2014. In 2017, Sierra Metals discovered the Santa Rosa de Lima vein system – a stockwork vein structure suitable for bulk mining methods. Operations at the mine were suspended in 2020 due to the COVID-19 pandemic. During this period, exploration drilling identified a downthrown extension at the Promontorio zone. In 2023, Sierra Metals placed Cusi on care and maintenance, citing low silver prices and a strategic shift towards based metal production at its Bolivar and Yauricocha operations. In its final year of production, Cusi achieved record output of 1.5 million silver equivalent (AgEq) ounces in 2022 with an all-in-sustaining cost of US$23.20 an ounce. Mill utilization that year was only 63%.