Kuya Silver unveils Peru mine development plan
Kuya Silver Corp. [KUYA-CSE, KUYAF-OTCQB, 6MR1-FSE] has released details of a toll milling agreement and development plan for its Bethania Silver Project in Peru.
Kuya said Compania Minera San Valentin (CMSV) has pledged to process run-of-mine material at their plant located 20 kilometres by road from the Bethania project. “This same plant processed material from Bethania between 2013 and 2015, and has a nameplate capacity of 500 tonnes per day,’’ Kuya said in a press release.
Kuya shares were unchanged at 26 cents on Monday and currently trade in a 52-week range of 77 cents and 19.5 cents.
The Bethania Silver project is located on the Cordillera Central in Central Peru, approximately 316 kilometres by road from Lima. It is a region that contains prolific and prospective base and precious metals belts.
The project consists of four concessions covering 1,750 hectares that are accessible year-round via a four-hour drive from the city of Huancayo.
The mine was in production until 2016, toll milling its ore at various concentrate plants in the region.
Historically, the mine produced silver-lead and zinc concentrates from the run-of-mine material until it was placed on care and maintenance due to market conditions and lack of working capital.
In December 2020, Kuya Silver acquired 100% of the issued and outstanding shares of S&L Andes Export SAC, the Peruvian company that owns the Bethania mine and holds the mining concession, permits and other rights.
Referring to the toll milling agreement, Kuya said CMSV will have up to three concentrate production circuits available for production, specifically silver-lead, zinc and copper-silver. The terms of the agreement are guaranteed for 24-months, and renewable upon mutual agreement, beginning from the date of first delivery of material to the mill. There is no minimum production obligation for Kuya Silver.
Under the deal, Kuya will commit to an upfront payment of US$230,000 to CMSV prior to the commencement of toll milling operations.
Meanwhile, the company said it plans to engage in preparatory work necessary to restart production over the coming months to recondition and upgrade the underground working areas which have seen little to no traffic for the past seven years. The pre-production work is expected to include removal and replacement or reinforcement of certain underground supports, water pumping (dewatering), removal of broken rock material, tunnel, rail and ventilation maintenance.
The company said initial production is planned to focus on areas with existing underground infrastructure and will transition over time to newly developed areas. This work is required in advance of any production from Bethania.
According to a 2022 maiden resource estimate, Bethania an indicated resource of 5.8 million ounces of silver equivalent at an average grade of 451 g/t silver equivalent (AgEq) contained in 404,000 tonnes. On top of that is an inferred resource of 8.0 million ounces of AgEq at an average grade of 356 g/t contained in 700,000 tonnes.
A preliminary economic estimated (PEA) envisages 1.37 million ounces of silver equivalent (AgEq) in the first year, and life of mine production of 8.68 million ounces of AgEq.