The La Colorada project includes construction of new mining infrastructure; development of new mining zones to reach deeper, higher-grade areas of mineralization; and expansion of the sulphide ore processing plant. The project will be built progressively, ramping up from the current mining and processing rates of 1,250 mt/d to 1,800 mt/d by the end of 2017.

A new 600-m-deep shaft will be raise bored between La Colorada’s main Candelaria area and its Estrella area. Pan American reported that a new shaft would have been required over the long term whether or not the company had decided to proceed with the expansion.

The shaft will increase hoisting capacity to 2,300 mt/d, accommodating ore and waste extraction as well as serving as the main access to working areas. Preliminary engineering work for the new shaft and hoist has been completed, and detailed engineering will begin in early 2014.

Construction of the shaft is scheduled to start early in 2015, following completion of sufficient underground development around the shaft bottom. Commissioning is scheduled for the later part of 2016. The shaft will be designed such that it can be deepened in the future if justified by future exploration success.

The La Colorada expansion plan contemplates production down to the 740 level in the east side of the Candelaria area, more than 200 m below the current deepest 528 mining level, and down to the 610 level of the Amolillo vein, nearly 250 m below the current deepest 365 mining level.

Mining at both the Estrella and Candelaria areas will continue to utilize the cutand-fill methods currently employed. The expansion plan includes the addition of 22 new pieces of mining equipment to the fleet and the hiring of more than 100 additional mining personnel.

The capacity of the mine’s ventilation and dewatering systems will be increased to handle the mine’s hot and wet ground conditions as mining operations extend at depth.

La Colorada’s processing plants currently produce doré bars from a conventional cyanide leach plant for the oxide ore and silver-rich lead and zinc concentrates from a flotation plant that treats the sulphide ore. Both circuits currently share a single crushing plant. While the oxide plant will not be modified due to La Colorada’s oxide production remaining at current levels for the rest of the mine’s life, the sulphide plant will be expanded to 1,500 mt/d to treat increased sulphide ore feed.

Expansion of the sulphide plant will be implemented through the installation of a new crusher and grinding mill. The existing zinc flotation cells will be converted to lead flotation, and a new zinc flotation circuit will be built.

The expansion plan also includes an upgrade and expansion of the plant’s dewatering circuits and installation of a new 115-kV power line connection to the national grid, replacing the existing 33-kV lines. Work on the plant expansion will begin in early 2015 and is scheduled to be completed by mid-2016.

Commenting on the La Colorada expansion, Pan American president and CEO Geoff Burns said, “We have had exceptional exploration success at La Colorada and have grown the mine’s reserves and resources considerably. La Colorada has become a core long-term asset for the company, and we are pleased to be able to turn this exploration success into an organic expansion project with considerable economic potential.

“Even at today’s silver price, it makes sense to invest a relatively modest amount of capital to significantly increase our lowcost silver production at this high-grade and long-life asset.”