Pan American Silver restarts two mines in Peru

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Pan American Silver Corp. [PAAS-TSX, NASDAQ] said Wednesday September 30  that production has resumed at its Huaron and Morococha underground silver mines in Peru.

“Over the past couple of weeks, Pan American has been gradually redeploying its workforce at Huaron and Morococha following implementation of intensive health screenings and testing for the COVID-19 virus,” the company said in a press release.

Pan American, currently the world’s second largest primary silver producer, owns and operates mines in Mexico, Peru, Canada, Argentina and Bolivia. Its portfolio includes the Escobal mine in Guatemala, which is not operating right now.

In Canada, the portfolio includes the Timmins West and Bell Creek (together Timmins) operations, which were recently taken off the selling block.

Last year, Pan American reported consolidated annual silver and gold production of 25.9 million ounces and 559,200 ounces respectively.

Back in March, 2020, Pan American suspended normal operations at its mines in Peru, Argentina and Bolivia in order to comply with mandatory national quarantines. The suspension order was applied to four mines in Peru (Shahuindo, La Arena, Huaron and Morococha).

Operations at two Mexican mines — Dolores and La Colorada — were also suspended in early April.

However, in a June 1, 2020, press release, Pan American said operations had resumed at the Mexico mines following the restart of the Shahuindo and La Arena mines in May. By the end of Q2 2020, the company said all of its suspended operations had resumed production. However, the Huaron and Morococha operations were returned to care and maintenance on July 20, 2020, after several workers at the mines tested positive for COVID-19.

In May, 2020, due to uncertainties related to the impact of the COVID-19 pandemic, Pan American withdrew its 2020 annual production, cash cost and all-in-sustaining cost and capital expenditure forecasts.

When Pan American released its Q2 results August 5, the company said it expects to produce 19-22 million ounces of silver this year, as well as between 525,000-575,000 ounces of gold. The forecast all-in-sustaining cost (AISC) for the silver operations is US$10.50 to US$12.50 an ounce. The AISC forecast for the gold operations is US$1,050 to US$1,125 an ounce.

Pan American reported Q2 2020 consolidated silver production of 2.8 million ounces and gold production of 96,600 ounces. Revenue in the second quarter was $249.5 million.


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