San Cristobal Nearing Design Capacity

In an operations update issued June 2, 2008, Apex Silver reported that ramp-up to full production at the San Cristobal silver- zinc-lead project in the Potosí district of Bolivia was proceeding favorably, with design throughput rates expected to be consistently achieved by mid-year. During May, San Cristobal completed the 14-day throughput test provided for in the engineering, procurement and construction management contract. During the test, the plant achieved an average throughput of 43,000 mt/d over 14 consecutive days, with several days achieving rates of 50,000 mt/d, while confirming the functionality of plant components.

Apex initiated production at San Cristobal in August 2007. Ramp up was slowed by failed wells and pumps caused by excess salinity in the water. Some wells were redrilled, pumps were replaced as necessary, and as of early June the water well field was producing sufficient water to allow the plant to operate at design capacity. Installation of larger stainless steel casings and pumps during the third quarter 2008 is expected to provide a long-term solution to the problem. Improvements were also made in tailings density, and reclaimed water from the tailings impoundment is expected to result in additional water availability.

San Cristobal mill throughput during the first quarter was also constrained by variation in ore types, including fine and coarse material. Increasing amounts of fines caused material handling issues in the ore stockpile reclaim system, which reduced the amount of ore delivered to the concentrator. The company has changed its stockpile operating practices to improve the flow of ore through the reclaim system, thereby increasing plant availability and operations consistency. The variation in ore types also complicates the process of optimizing ore blends and recovery rates. Evaluation is continuing to determine the most appropriate methods for blending ores that include fine and coarse ore variations to improve metal recovery without impacting mill throughput.

San Cristobal is owned 65% by Apex and 35% by Sumitomo Corp. Proven and probable ore reserves recoverable by open-pit methods total about 231 million mt, containing about 450 million oz of silver, 8 billion lb of zinc, and 3 billion lb of lead. The orebody is open both laterally and at depth, and reserve expansion potential is considered excellent. The mill currently processes sulphide ore, with the oxide ore scheduled for processing later in the mine life.

As featured in Womp 08 Vol 6 - www.womp-int.com