First Majestic Silver Corp.: Major Expansion Launched at La Encantada Silver Mine
June 10, 2008
Majestic Silver Corp. is pleased to announce that ground breaking and
construction of a new 3,500 tpd cyanidation circuit at the La Encantada
Silver Mine, located in Coahuila Mexico will commence next week. The
final permit from the Mexican authorities was received last week
allowing for this expansion to begin immediately.
Construction of the new cyanidation circuit is expected to be completed
by February 2009. The total budget for this major plant expansion is
US$21.6 million and has an undiscounted Internal Rate of Return (IRR) of
80% representing a payback period of 14 months based on the assumption
of US$15.00 per oz silver.
Historically, the La Encantada mill has had a capacity of 800 tpd and
has been processing oxide ores from the mine through a flotation circuit
to produce a lead/silver concentrate. The construction of the new 3,500
tpd cyanidation circuit will allow the Company to increase its
recoveries of silver and to produce Doré bars as a finished product
instead of concentrates. Due to the historically low recoveries yielded
from the past 30 years using flotation at La Encantada, a large Resource
has been created in the form of tailings that was defined in the
Company’s NI 43-101 report dated March 19, 2008. That 43-101 report
defines 4,916,085 tonnes of tailings with an average grade of 150 g/t.
Commencing in the first quarter of 2009, silver production will come
from combining ore from the mine with tailings from surface. This
expansion, will allow production to be expanded to 3,500,000 ounces of
silver in 2009 and 4,000,000 ounces of silver in 2010. Production will
be in the form of Silver Doré rather than concentrates which will
significantly reduce smelting, refining & transportation costs of
the finished product and thereby increasing the profitability of the La
The metallurgical testing for the cyanidation process was executed at
the SGS Metallurgical Laboratory in Durango, Mexico which included the
testing of the different ores present and the tailings to be processed.
This metallurgical testing confirmed historical tests completed by
Peñoles in 1985.
The mixture of ore and tailings as defined by the Company’s expansion
plan will consist of 700 tpd of raw ore from the mine with an average
grade of 350 g/t with a recovery of 78%, plus 2,800 tpd of old flotation
tailings with an average grade of 150 g/t and a recovery of 50%,
resulting in combined recoveries of 60%.
This expansion project illustrates First Majestic’s commitment to
maintaining its aggressive plans of continuing the growth at each of its
operations, of which management believes will bring substantial
benefits to the Company’s shareholders. La Encantada will be doubling
its silver output in the coming year and will produce 100% silver in
the form of Doré bars, reducing smelting treatment and freight charges
and increasing the Company’s leverage to the value of this important
The Company’s ongoing aggressive development and exploration program at
La Encantada is continuing with the purpose of increasing both the oxide
and sulphide Resources within the mine. In addition to this mill
expansion, a total of 8,160 metres of underground development is
scheduled for 2008. Presently, three diamond drill rigs are working
underground and are scheduled to complete 7,600 meters of drilling in
2008. Additionally, to compliment this development and exploration
program, a Geophysics team is presently on site at La Encantada
completing a 46 kilometre regional geophysics program.
The exploration potential within La Encantada’s 2900 hectare property
boundary is very high as all the operations of the mine and the present
Reserve/Resource are located in a small portion of the property covering
only approximately 100 hectares. The Company’s current development and
exploration program is focusing on the definition of known areas and
testing of new targets and is expected to result in significantly
improved Reserves/Resources. The Company anticipates the next updated NI
43-101 Report on the La Encantada Silver Mine will be completed by late
First Majestic is a producing silver company focused in Mexico and is
aggressively pursuing its business plan to become a senior silver
producer through the development of its existing assets and the pursuit
through acquisition of additional assets that contribute to achieving
its corporate growth objectives.
FOR FURTHER INFORMATION contact firstname.lastname@example.org, visit our
website at www.firstmajestic.com
or call our toll free number
FIRST MAJESTIC SILVER CORP.
President & CEO
This press release includes certain “Forward-Looking Statements” within
the meaning of section 21E of the United States Securities Exchange Act
of 1934, as amended. All statements, other than statements of historical
fact, included herein, including without limitation, statements
regarding potential mineralization and reserves, exploration results and
future plans and objectives of First Majestic Silver Corp. are
forward-looking statements that involve various risks and uncertainties.
There can be no assurance that such statements will prove to be
accurate and actual results and future events could differ materially
from those anticipated in such statements.