Consolidated Zinc Ltd (ASX:CZL) is on track to start mining its Plomosas Zinc-Lead-Silver Project in northern Mexico by the end of the year.
Results of mining and cost studies underpin the company’s decision to refurbish the existing plant and begin stage I pilot plant production.
A stage II expansion is expected around seven months later in 2019.
READ: Consolidated Zinc secures funding to assist with restart of Mexican zinc project
CEO Brad Marwood said: “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 is well advanced in securing a funding solution for the development of the Plomosas mine.
“By fast-tracking the stage I production we seek to provide a return to our shareholders through providing cashflow which will also underpin expanding production.”
The capital cost for stage I is expected to be low at less than US$5 million based on tenders received for mining, plant refurbishment and tailings dam upgrades.
A mine plan and mining schedule have been completed for underground operations to start at the Tres Amigos deposit while environmental permits for operations are proceeding.
Results of the ongoing studies will be incorporated into a detailed costing study to be reported later this quarter and discussions are underway with potential offtake counterparties and funders.
Plomosas resource
Plomosas has a resource of 1.174 million tonnes at 16.1% zinc plus lead and 22.2 g/t silver for 189,700 tonnes of contained zinc plus lead metal in the indicated and inferred categories with the latter comprising 83.4%.
It is worth noting that Plomosas operated for 30 years to 1974 with no more than one year’s ore reserves in advance of mining, which provides support for the possible future conversion of the inferred resources to the indicated category.
Close to Chihuahua
The mine is a 75-minute drive from Chihuahua via a sealed highway.
It has a population close to 1 million and is the home of the automotive industry and other major USA supply companies utilising the highly skilled workforce available.
Chihuahua is a mining service centre similar to Kalgoorlie with extensive services available ranging from equipment suppliers to EPCM contractors.