Altaley Mining Corporation (TSX-V:ATLY) said it is eyeing first revenue from its Tahuehueto mine in Mexico now that pre-production mining and mill commissioning has started.
The metals miner told investors that it was expecting first concentrate deliveries in several weeks, while one ball mill is now ready, capable of processing up to 500 tonnes per day (tpd).
Installation of a second 500 tpd mill to increase capacity to 1,000 tpd is planned to be completed in the third quarter of this year.
Ralph Shearing, Altaley's CEO, said the commissioning would bring the firm its "first revenue from the new, on-site Tahuehueto mineral processing facility".
"The Tahuehueto gold mine coming on-line is the realization and delivery to shareholders of the company's major goal of reaching production on its flagship asset," he added.
READ: Altaley Mining reports positive net income of $36.2M in 2021 thanks to $98.4M in gross revenue
"The robust cash flows anticipated from Tahuehueto should allow us to accelerate our debt repayments; our cash flow modeling suggests all loan debt may be repaid in under two years.
"We will also re-initiate exploration activities to expand reserves and resources, which exploration I am convinced, can unlock the hidden, undiscovered ultimate potential of this district-scale project allowing mine expansion and extension to the current life of mine."
From the first ball mill a bulk concentrate will be produced, and as soon as possible afterwards, a separate precious metal rich lead concentrate and a zinc concentrate. Copper concentrate production is planned to start in late 2022.
Altaley said it has stockpiled over 29,000 tonnes of ore to be used in the first phase and as soon as the plant has been optimized for maximum recoveries and throughput, higher grade run of mine ore will begin to be processed to maximize revenues.
Altaley's underground mining contractor has developed access to four stopes, two on the El Creston structure and two on the Perdido structure, the company noted.
"Underground development is continuing and will soon provide access to two additional stopes on Perdido and four additional stopes on El Creston at lower elevations and thereby will have completed access to at least 10 mining stopes capable of supplying mill feed to the 1,000 tpd operation," it added.
The Tahuehueto project sits in north-western Durango State. It lies around 25 kilometres (km) north of the Topia polymetallic-silver mine, 48 km northwest of the La Cienega gold, silver, base metal mine, 85 km southwest of the Guanacevi silver district, 280 km southeast of the Palmarejo silver and gold mine, and 150 km northwest of the San Dimas mining district, most notable for the Tayoltita silver and gold mine.
Elsewhere, the firm's Campo Morado property is an operating polymetallic base metal mine with mining and milling equipment currently producing at an average of 2,200 tpd and is currently estimated to be Mexico's sixth-largest zinc producer.
Contact the author at giles@proactiveinvestors.com