Altaley Mining Corporation (TSX-V:ATLY) told investors that it expects a strong performance this year as it focuses on developing robust plans for each of the company’s sites following a change in management in September 2022.
Outlining Altaley’s operations plans for 2023, CEO Mike Struthers commented: “We expect 2023 to be a strong year for Altaley, turning the corner on performance at both sites and achieving some critical milestones at Tahuehueto.
“We are determined to transform Altaley into a successful mining company and achieve a significant re-rating in 2023 as a result. I look forward to providing more information on our progress in the coming weeks and months.”
READ: Altaley Mining welcomes pre-production results during mill commissioning at Tahuehueto gold mine project
Tahuehueto gold mine project
Altaley noted that changes to strengthen the organization at its Tahuehueto gold mine project in Durango State, Mexico, are underway – a new consulting construction manager has been appointed, and recruiting for a new site general manager is in process.
The advanced construction project is expected to achieve some critical milestones during 2023, ultimately achieving the nameplate 1,000 tonnes per day (tpd) capacity, with the construction of the initial 500 tpd operation expected to be completed in the second quarter, the company added. The 500 tpd stage is expected to be cash positive at the site level. Some of the remaining critical tasks to achieve the 500 tpd project are the installation of the final comminution equipment and construction of the definitive tailings storage facility.
Expansion up to the nameplate capacity of 1,000 tpd at Tahuehueto is expected to be completed in the fourth quarter of 2023, subject to funding.
In addition to installing a second ball mill and associated circuits, the scope of the 1,000 tpd project includes a third tailings filter press (as backup), a materials handling orepass in the mine to alleviate traffic congestion, and completion of the final stages of the definitive tailings facility.
Currently, the mine is in pre-production, averaging 300 tpd, and the plant is performing very well, Altaley said.
At the 1000 tpd capacity, the company said the mine is projected to produce on average 42,822 gold equivalent (AuEq) ounces (oz) per year, and generate annual average underlying earnings (EBITDA) of $28.1 million at a gold price of $1,900/oz.
Based on the updated 2022 Pre-Feasibility Study, the company noted that Tahuehueto producing at 1,000 tpd has an after-tax net present value (NPV) of $161.3 million (5% discount rate) and an internal rate of return (IRR) of 65%.
Campo Morado mine
Altaley said that plans for 2023 at the Campo Morado mine in Mexico's Guerrero State have strategically shifted focus towards the mining of higher-grade copper orebodies.
The higher-grade copper zones comprise the Fish and South-West orebodies, with copper head grades in the range of 0.7%-1.1% copper (Cu).
The company said mining in these areas will ramp up in February. Furthermore, additional 'Sub-A' flotation cells have been commissioned in the copper circuit, which in combination with mining higher-grade ore will result in an expected 5% increase in copper concentrate grade to 16% Cu.
The majority of silver also reports to the copper concentrate, with the result that copper concentrates are expected to contribute 40% of total revenue in 2023, the company said. The balance of approximately 60% of revenue comes from zinc and gold combined, within the zinc concentrates. Campo Morado's EBITDA for 2023 is projected to be $15.9 million.
The company also expects to make progress on implementing recommendations made by international engineers Ausenco to progressively improve plant performance at Campo Morado, following a detailed review of the plant in October 2022.
The mine has already implemented a Mine-to-Mill / Geometallurgy program, which is a vital component in successful volcanogenic massive sulphides (VMS) operations worldwide. The Ausenco engineers will continue to guide the process improvements during 2023 and beyond. Altaley noted that none of the performance improvements, such as increased recoveries, have been factored into plans for 2023, so they are all upside.
Total planned metal production for 2023:
Altaley said it expects to produce 15,433 tonnes (t) of zinc from Campo Morado this year, 2,967 t of copper, 2,142 t of lead, as well as 185 kilograms (kg) of gold and 25,810 kg of silver.
At Tahuehueto, it expects to produce 1,903 t of zinc, 545 t of copper, 1,454 t of lead, 289 kg of gold and 6,258 kg of silver.
Altaley Mining holds two wholly-owned Mexican gold, silver, and base metal mining projects. Tahuehueto is in northwestern Durango State, Mexico, and is generating gold, silver, lead, and zinc in concentrates.
Campo Morado is an operating polymetallic base and precious metals mine currently producing an average of 2,400 tpd and is currently estimated to be Mexico’s sixth largest zinc producer and is progressively increasing its copper revenues.
Contact the author at stephen.gunnion@proactiveinvestors.com