Guanacevi Mine, Mexico

Highlights & Production Statistics

Highlights

• Large Plant - Modern mill at 1,200 tpd with opportunities for expansion.
• High Grades - 300+ grams/tonne Silver plus Gold credit of 0.70 gram/tonne.
• Good Widths - 3 metre average width
• Local Infrastructure
• Power and Water on property
• 5 km to paved highway and town of Guanacevi
• Trained work force on site
• Land Package - 4,076 hectares (10,071 acres)
• Low and Manageable Risks - Known geology, grades, metallurgy and mill operation

Production Statistics

YEAR	SILVER (oz)	GOLD (oz)	SILVER EQUIV. (oz)
2011	2,682,035	6,866	*****2,991,005
2010	2,449,000	6,036	****2,751,000
2009	1,870,000	4,877	***2,172,000
2008	1,858,000	3,788	*2,141,000
2007	1,907,000	3,957	**2,128,000
2006	1,350,000	2,493	**1,487,000
2005	950,000	2,332	**1,078,000
2004	350,000	650	****385,000

     *Gold converted to silver at a 75:1 ratio
    **Gold converted to silver at a 55:1 ratio
 *** Gold converted to silver at a 65:1 ratio
**** Gold converted to silver at a 50:1 ratio
***** Gold converted to silver at a 45:1 ratio

Production Costs - Cash costs were US$ 9.67 per ounce (net of gold credits) for the first three quarters of 2011 and $8.89 for 2010. The target is to reduce cash costs to the US$6.50 - $7.50 range as benefits from the expansion and capital expenditure programs start to take effect.

Reserves and Resources (as of December 31, 2010)

Guanacevi Silver-Gold-Lead-Zinc Resources (as of December 31, 2010)

Click here to see recent drill results

Maps & Sections

Map of North West Mexico	Concessions Map
Map of the State of Durango
Longitudinal Section Santa Cruz	Surface Map
Guanacevi Project Longitudinal Section

History

"Durango - the Spaniards dream - lies in the heart of the famous Sierra Madre Mountains. It's beautiful climate, ancient forests, graceful plains and above all, its wonderful wealth of gold and silver and copper- together with an abundance of water- have combined to make it a perfect Utopia.

This dream of the Spaniard was not that of everlasting youth or beauty, but it formed the basis upon which the boldest and most daring pioneers set out to conquer the wealth of new and unknown lands, and thus add new wealth and impetus to the old world, then in the zenith of its glory." (Las Minas de Mexico, J.R. Southworth, 1905)

Stoping for silver the old fashioned way

Mining in Guanacevi by the Spanish dates back to at least 1535 and as early as 1616, the Jesuit priest Francisco J. Clavijero stated the Guanacevi district was already famous for its minerals. Alexander von Humboldt, in his writings about New Spain in the early 1700's, described the district as a "rich mineral area" in the Sierra Madre Occidental. Some of the famous mines worked by the Spaniards include: Santa Cruz, Garibaldi, Sirena, Capuzaya, San Rafael y Fanny, Soto, Nueva Australia, Desengaño, Barradon, San Jose, Arianeña, Chamole, Mexicana, Predilecta and Paleros.

By the 1800's, several English and American companies worked in Guanacevi, including Restauradora Company at Arianena, Barradan y Cabras Company at Barradan, Guanacevi Mining Company at Hacienda Wilson, F.H. Husted at Anita, the United Mexico Company at Paleros and the Mexican Consolidated Mining and Smelting Company at the mines El Soto, Nuevo Porvenir and Nueva Australia in the San Pedro area. At its peak in the late 1800's, up to 50 small mines were feeding several local mills. A small mint was constructed in Guanacevi in 1844. However, by the early 1900's, many of the mines had closed.

Mexican ore carrier ascending ladder

"Guanacevi in Durango state is a very rich district, and many of the largest capitalists of New York have enormous interests in its mines. Considering the large number of once famous properties, there are comparatively few in operation. The cessation of development has been due to various causes, though not from lack of ore.

In some cases, it has been from lack of funds for the purchase of machinery, also when water in large quantities has been encountered. Another cause has been the heavy freight and smelter charges, still another, a lack of local treatment facilities of ores available only for milling. Local critics claim the failures were on account of bad management. Many of the mills were well constructed, but in most cases their erection was hurried, and carried out with no adequate concept of the metals to be treated." (exerpted from Las Minas de Mexico, J.R. Southworth, 1905)

Like most Mexican mining districts, Guanacevi closed after the Mexican revolution of Francisco I. Madero, Emiliano Zapata and Francisco (Pancho) Villa in 1910-1912. Industrias Peñoles subsequently acquired the Santa Cruz and Garibaldi mines in the 1920's and developed the 300m deep shaft plus several kilometers of underground workings but carried out little production. The Guanacevi Mining Company continued operating in the area until its closure in 1942. The district saw sporadic mining activity thereafter until the huge rise in the silver price in 1980 prompted renewed interest in the district.

In 1970, the Comision de Fomento Minero (the mine investment arm of the Mexican government) erected a 250 tpd flotation plant in Guanacevi to facilitate renewed production from some of the small mines in the district. The plant was expanded to 600 tpd in the early 1980's and then sold in 1991 to Metalurgica Guanacevi, who refurbished the plant and completed the addition of a 600 tpd cyanide leach circuit. Starting in 1992, Minera Santa Cruz y Garibaldi produced small amounts of high grade ore from the Santa Cruz y Garibaldi mines under a lease arrangement with Industrias Penoles.

The district of Guanacevi was reknowned for its high silver grades. Official records indicate a total historic production value of around 500 million pesos, which is equivalent to approximately 500 million oz silver and equivalents. That would make Guanacevi one of the top five historic silver mining districts in Mexico on the basis of past production.

Photo Gallery

Technical Reports

• Click to view Guanacevi NI 43-101 Report