Sierra Metals Inc. (TSX:SMT) announced that it’s increased the measured and indicated mineral resources for its Peru-based Yauricocha mine by 86 percent, or over 5,270,000 tonnes.
Sierra Metals Inc. (TSX:SMT) announced that it’s increased the measured and indicated mineral resources for its Peru-based Yauricocha mine by 86 percent, or over 5,270,000 tonnes. On the other hand, mineral reserves have been reduced by about 1,017,000 tonnes.
Highlights from the release include:
- Total Proven and Probable Mineral Reserves for Yauricocha are 5,377,000 tonnes averaging 75.5 g/t silver, 1.41% lead, 0.80% copper, 2.34% zinc and 0.92 g/t gold; down from 6,394,000 tonnes at October 1, 2013.
- Total Measured and Indicated Mineral Resources for Yauricocha, inclusive of the Mineral Reserves, are 11,411,000 tonnes averaging 55.4 g/t silver, 0.85% lead, 0.83% copper, 1.73% zinc and 0.76 g/t gold; up from 6,139,000 tonnes at October 1, 2013.
- The 16% reduction in reserve tonnage is due to several factors including the change in modelling methodology, the exclusion of 350,000 tonnes from Victoria and Ipillo Mines, the application of the current metal price and concentrate sales environments, and the elevated depletion of relatively higher grade reserves from the Mascota ore body since October 1, 2013.
- The 86% increase in resource tonnage is predominantly in the Indicated category of polymetallic mineralization and is the result of the successful exploration programs that have extended ore bodies at depth in the Central Mine area.
- The updated silver equivalent grade (‘AgEq’) for the Proven and Probable Reserves is 338.6 g/t. Although this cannot be directly compared with the previous AgEq estimate of 360.6 g/t, the reduction is indicative of the change to the current reserves based upon the existing metal prices and concentrate sales terms.
Audra Walsh, president and CEO of Sierra Metals, commented:
The latest estimate of resources and reserves for Yauricocha reflects several significant advances for Sierra and continues a 4-year track record of resource growth since we bought the Yauricocha Mine in 2011. Resources at the time of the acquisition were less than 4 million tonnes and they have increased to 11 million tonnes by the end of 2014. Our investment in exploration drilling has been complemented with investment in technical systems and training of our personnel. Together with our independent consultant we have improved the resource estimation methodology in line with best industry practice. With this change we are confident that our model better reflects the reality of the mineralization and that we have a reliable predictive tool for future business evaluation.
The resource and reserve grades have also been impacted by the focused production from the high grade Mascota ore body over the last year. Although we have exploration drilling that indicates its extension at depth, sufficient drilling was not performed prior to the cut-off date of this resource estimate. Our expectation is that the Mascota ore body will contribute positively to future resource and reserve estimates.
The exclusion of the reserve tonnages from Mina Ipillo and Mina Victoria is a conservative measure at this time and is deemed to be temporary, although Indicated Resources remain at Mina Ipillo. Additional evaluation of their associated operating and capital costs is required to consider them to be at the same level of confidence as our other reserves. We are in the enviable position of not relying on these deposits for business success in the foreseeable future, but will prioritize them relative to the other opportunities currently before us.