Escobal

Overview

Escobal is a high-grade silver-gold-lead-zinc project located approximately 40 km east-southeast from Guatemala City in southeastern Guatemala.

There are hosted two small mining operations but the Escobal deposit was discovered only in 1996. Goldcorp conducted exploration work and published a resource estimate in 2010. Tahoe Resources the present day owner of the project is 40% owned by Goldcorp.

 A Preliminary Economic Assessment study was released in 2012. A 3,500 tonnes per day underground mine and milling operation would be built for $326 million and would be commissioned in 2013. Over the first 10 years of operations in the PEA expansion scenarios, Escobal is expected to produce 20 million silver equivalent ounces per year at a total cash cost of less than $5.00 per ounce.

The underground mining operation would involve open stoping while processing would be a conventional flotation operation.

On October 21, 2011, the project EIS was approved and construction commenced in November. Full operating permits are expected in 2012.

Location

Escobal is located approximately 40 km east-southeast from Guatemala City in southeastern Guatemala. It is also 3 km east of the town of San Rafael Las Flores in the Department of Santa Rosa. The town is connected by a paved road to the country's capital city Guatemala. Nearby towns could provide basic services but there is no local workforce experienced in mining operations.

The project lies in mountainous terrain with elevations ranging from 1,300 m to 1,800 m. Surrounding mountains ranges raise to an elevation of 2,600 m asl.

Vegetation consists of oak, pine and cypress trees and brush.

Climate is marked by two distinct seasons: a rainy season between May and November, and a dry season the rest of the year. 

Geology & Mineralization

Guatemala comprises two distinct geologic terrains formed as a result of a convergence event: the North American plate that covers the northern part of the country, and the Carribean plate that comprises the southern half. Escobal lies within the Carribean plate. It is within a Tertiary mafic eruptive units that trend parrallel to the Montagua fault system.

The Escobal deposit represents an intermediate sulfidation epithermal quartz vein system of probable Upper Miocene to Lower Pliocene age. The vein is better constrained in the volcanic host rocks and more diffuse and unconstrained in the sediment host rocks.

The mineral deposit has been defined over a 1,700 m strike lenght and 800 m vertically. The silver, gold, lead and zinc mineralization is hosted within quartz veins, stockwork zones and hydrothermal breccias.

Escobal hosts an Indicated silver resource of 367.5 million ounces at 422 g/t average grade, and an Inferred silver resource of 36.7 million ounces at 254 g/t average grade.

Mining & Operations

The proposed mining methods at Escobal are transverse and longitudinal long-hole stoping. Both will require use of cemented backfill as an integral part of the mining cycle. The mined stope voids will require backfill to ensure stability before mining adjacent pillars.

Transverse stoping will be used in wider parts of the deposit. Longitudinal stoping will be used in narrower parts of the deposit up to 15 meters wide.

The major mine equipment will include R1700 and R2900 Caterpillar LHDs with 7.3 cubic meter buckets and equipped for remote operation production and development fleet. Forty-five (45) tonne Caterpillar trucks will be used for hauling ore and waste out of the mine. Atlas Copco two-boom electric hydraulic jumbos will be utilized to drive the development headings and stope development headings. Ground support will be installed in all headings with a fleet of Atlas Copco electric-hydraulic jumbos capable of installing split set, and swellex bolts. Cable bolting will be done using Atlas Copco Simba drills which will also be the primary production drill in the long-hole stopes. Cubex track-mounted drills equipped with a V-30 reaming head will be used for drilling breaking slots in the stopes. 

Support equipment will include shotcrete remote spray jumbos and mixer trucks, scissor lifts, explosives trucks, and various materials handling vehicles are included in the fleet.

Development waste that is not placed in the mined stopes as backfill will be trucked to surface for use in facilities construction or placed in a development rock storage facility. The waste rock encountered in the development headings has a high net neutralizing potential and is unlikely to generate acid.

Process 

The process selected for recovering the gold, silver, lead and zinc can be classified as conventional. A front end loader dumps ore in a hopper. Refuse is being crushed in a primary crusher followed by a secondary crusher. Grinding is being done by a ball mill. Conventional flotation circuit would produce two concentrated lead and zinc with silver reporting to the lead concentrate. Concentrates are dewatered before being shipped out. 

Two concentrates are going to be produced:

-          17,000 tonnes per year lead concentrate grading 25,600 g/t silver; and,

-          25,000 tonnes per year zinc concentrate.

Tailings are dewatered with water being treated in a treatment plant and reused as process water. The dry tailings are stacked in the Tailings Management Facility. Parts of the tailings are going to be used to backfill the underground mining works. 

Over the life of mine, approximately 29.9 million tonnes of the dry tailings will be produced; of which approximately 14.5 million tonnes will be mixed with cement and go back underground as paste backfill. The remaining 14.5 million tonnes of dry tailings will be placed in the Tailings and Development Rock Storage Facility, along with approximately 2,300,000 tonnes of development rock.

A 4,500 tonnes per day mill would produce over its 20 years life some 319 Moz silver, 273 Koz gold, 336.5 Mlbs lead, 596 Mlbs zinc as metals in concentrates. The mill is expected to produce 20 million ounces of silver per year in average over the first 10 years.

Environment & Community

Escobal provides responsible value through sustainable economic and social development in the communities where they operate.

As of 2012, 95% of its employees are Guatemalan. When fully operational average wages and salaries will average $17.1 million, royalties & taxes would exceed $50 million per year. Also goods and services that would be procured locally would amount to $25 million per year.