Consolidated Zinc Accelerates Production Timeline for Plomosas

Despite its original plans to begin production by 2019/2020, Consolidated Zinc (ASX:CZL) announced Friday (August 10) that its Plomosas zinc-lead–silver project in Mexico could be ready to go by the end of 2018.

According to a press release, the results of recent mining and cost studies along with a review of the existing processing plant gave the company encouragement to reexamine its production plans.

Because of those results, the company has decided to move forward with refurbishing the existing plant and starting stage one pilot plant production by the end of this year. Meanwhile, a stage two expansion will take place about seven months later, in 2019.

Consolidated Zinc expects capital costs for stage one to be minimal at US$5 million, based on tenders received for mining, plant refurbishment and tailings dam upgrades.

A recent assessment of the project’s assets indicate a stage one mineral resource of 20,400 tonnes at 13.8 percent zinc and 2.4 percent lead, all of which is in the indicated category.

Plomosas as a whole has a mineral resource estimate of 1.17 million tonnes at 16.1 percent zinc and lead and 22.2 g/t silver for 189,700 tonnes of contained zinc and lead, both in the indicated (16.6 percent) and inferred categories (83.4 percent).

CEO Brad Marwood spoke highly of the production bump up, highlighting the benefits it will provide for both the company and its shareholders.

“The mining and scheduling scoping study presents a preferred mine implementation plan that CZL will work towards implementing in 2018. The mature mining industry in Mexico has developed proven pathways for funding mining projects and CZL are well advanced in securing a funding solution for the development of the Plomosas mine,” he said.

“By fast tracking the stage 1 production we seek to provide a return to our shareholders through providing cash flow which will also underpin expanding production,” Marwood added.

The company is currently working to establish offtake agreements with counterparties to help finance the mine’s development. Approximately 40 percent of the necessary US$5 million for stage one comprises tailings dam expenditure required by local authorities, which the company says is a major driver in the potential timing advancements.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.