The Northern Miner: Cyprium Picks Up Momentum at Potosi

Cyprium Mining (TSXV:CUG) recently started small-scale mining at the past-producing underground Potosi silver-lead-zinc mine in northern Mexico, with plans to further increase throughput.
Potosi is in Chihuahua’s historic Santa Eulalia district. Discovered in the 1500s, Santa Eulalia ranks as one of Mexico’s top silver and base metal producing districts.
In the past 100 years, Santa Eulalia churned out nearly 500 million oz. silver along with large amounts of lead and zinc, Alain Lambert, the company’s chairman and CEO, says. The 48 sq. km district is also the largest carbonate replacement deposit in Mexico.
Currently, three companies control Santa Eulalia, which is divided into three camps.
Cyprium’s business plan — similar to other Canadian miners in Mexico such as First Majestic Silver and Endeavour Silver (TSX:EDR; NYSE:EXK) — calls for acquiring past-producing assets in Mexico. “The two key criteria we have are these mines can be brought back into production inexpensively and rapidly. And that they need to have very good exploration potential,” Lambert says.
The past-producing Potosi mine fits the bill. Last October, Cyprium bought 53% of the joint venture that owned the Potosi mine, the nearby San Guillermo processing facility and La Chinche from Valenzuela.
In exchange, Cyprium agreed to commit US$2.5 million on Potosi by the end of 2016. So far, it has spent US$1 million, and expects to raise the remaining amount through financings, Lambert says.
To date, Cyprium has focused its exploration efforts in the mine on the upper Tunel body, particularly on levels 2 and 4, the oxide zinc body on level 14, and the larger sulphide mineralized Santo Domingo body, which was partly mined in the past on levels 6, 9, 10, and 11.
In May, the junior completed rehabilitating the Potosi No. 3 shaft and improved infrastructure and security at the mine. The No.3 shaft allows the junior to access all the levels from 0 to 4.
Come July, Cyprium kicked off small-scale mining at Potosi, by extracting broken mineralized material left in stopes on levels 1 and 2 by past mining activities, at an extraction rate of 20 tons (18 tonnes) per day.
Cyprium aims to increase the extraction rate to 80 tons (72.5 tonnes) per day, after it receives the final explosive permits to begin blasting.
The company originally expected to get the explosive permit by August, but Lambert says he’s confident that Cyprium will receive it shortly.
“Once we get the explosive permit, we can have a bigger tonnage. Then we are going to start hauling whatever’s stockpiled and whatever comes out of the mine to the Aldama plant for treatment,” Lambert explains, noting Cyprium has been stockpiling the earlier extracted material.
The company has an exclusive right to use the 100-tonne-per-day plant, sitting 42 km from Potosi, until May 2019. It will sell all the lead and zinc concentrates with silver content produced at the plant to Trafigura Mexico.
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