Reduction in silver reserves in Goldcorp’s Peñasquito Mine and Primero Mining’s San Dimas Mine resulted in a decline in Silver Wheaton’s proven and probable reserves as of Dec. 31, 2011.
Author: Dorothy Kosich
Posted: Tuesday , 03 Apr 2012
RENO (MINEWEB) – Silver Wheaton reported a 144-million ounce decrease in attributable proven and probable silver reserves as of Dec. 31. 2011, as well as a 0.03 million-ounce decrease in attributable proven and probable gold reserves.
However, attributable measured and indicated resources increased by 86 million ounces of silver and 0.14 million ounces of gold. Attributable inferred resources decreased by 139 million ounces of silver, but increased by 0.02 million ounces of gold.
Silver Wheaton announced total year-end 2011 attributable proven and probable reserves of 798 million ounces of silver and 0.22 million ounces of gold, attributable measured and indicated resources of 452 million ounces of silver and 0.38 million gold ounces, and attributable inferred resources of 355 million ounces of silver and 0.07 million gold ounces.
The decrease in 2011 attributable reserves was partially due to depletion from record production during the year, as well as a reduction in silver reserves at Goldcorp’s Peñasquito mine and Primero Mining Corp.’s San Dimas mine.
“As per Goldcorp’s February 15, 2012, disclosure, the reduction in silver reserves at Peñasquito occurred as a result of increased cut-off grades due to higher operating costs than those estimated in the original 2006 feasibility study,” Silver Wheaton said. “In 2012, exploration at Peñasquito will target additional high-grade mineralization in mantos beneath open-pit bottoms, in addition to testing the potential for block cave mining in deep mineralized zones.”
Silver Wheaton also noted Primero’s March 28, 2012, disclosure that the company has elected to utilize block modeling to estimate its mineral reserves and resources rather than the polygonal method. “The estimates made using the new approach resulted in a reduction in both silver reserves and inferred resources at the San Dimas mine, as of December 31, 2011.”
“Primero believes that the new estimation approach will improve mine planning, and that further drilling and mine development will result in mineral resources being converted to mineral reserves, a reasonable amount of the exploration potential being converted to inferred resources, and new mineral discoveries being realized,” said Silver Wheaton.
“San Dimas has produced in excess of 580 million ounces of silver in its greater than 100 years of operation and aggressive exploration, particularly in the Sinaloa Graben region, continues to yield excellent results,” said Silver Wheaton CEO Randy Smallwood. “We are confident that San Dimas will deliver solid production results, and that Primero’s efforts to improve mine planning will ultimately add value to this impressive asset, including the potential for significantly expanded long-term production levels.”
Smallwood observed, “We are in a period where commodity price gains are often largely offset by industry wide operating cost pressures, which can result in reserve reductions. In an inflationary environment such as this, the strength of our ‘fixed operating cost’ business model, which continues to generate amongst the highest cash operating margins in the precious metals industry, is apparent.”
“Our core assets are mainly comprised of long-life and lower-cost mines, with proven records of reserves replacement and resource conversion, and we are confident that ongoing exploration program will continue this trend into the future,” he stressed.