Guanajuato Silver [AQSE:GSVR] has impressed with its first year silver production numbers, with 2.15 million silver-equivalent ounces; this included record production for the fourth quarter of 836,375ounces derived from 401,244 ounces of silver, 3,907 ounces of gold, 811,492 pounds of lead and 1,261,554 pounds of zinc.
This means that the miner, which is regarded as one of the fastest growing silver producers in Mexico, has delivered continuous quarter-over-quarter increases in silver-equivalent production since the inception of its precious metals processing program in 2021.
Who is Guanajuato Silver?
Aquis-listed Guanajuato Silver has four mines producing silver in Mexico and has reported a successful ramp up across the portfolio of projects. The company has reported record revenue for 2022 of $36.8m generated by a realised average price of $21.23 per silver ounce, $1,783 per gold ounce, $0.92 per pound of lead, and $1.42 per pound of zinc.
Silver recoveries continue to exceed historical rates; the average silver recovery for 2022 was 86%; the average gold recovery over the same period was 84.5%.
“Throughout 2022 we have exceeded many of our ramp-up targets, such as very strong process plant recoveries, and consistently larger throughput volumes of mineralised material,” said CEO James Anderson. “Our company’s rapid growth is demonstrated by our strong quarter over quarter silver and gold production increases, which we plan to accelerate throughout 2023.”
By way of guidance, in 2023, silver equivalent production is expected to range from 4.6 to 4.8 million ounces. Consolidated cash costs per ounce are expected to be slightly lower compared to 2022.
Reactivating historic mine workings in Mexico
Guanajuato Silver is engaged in reactivating past producing silver and gold mines in central Mexico. It produces silver and gold concentrates from the El Cubo Mine, Valenciana Mines Complex, and the San Ignacio mine. All three mines are located within the state of Guanajuato, which has an established 480-year mining history. Additionally, the company produces silver, gold, lead, and zinc concentrates from the Topia mine in northwestern Durango.
In March Guanajuato said that a US-based institutional investor had acquired a significant equity position in the company through the purchase of approximately 24,000,000 common shares representing the majority of the equity position previously held by Great Panther Mining. The remaining Great Panther equity position was purchased by other investors. The Great Panther shares were sold by a trustee appointed to represent the interests of the Great Panther stakeholders.
“The addition of this new strategic investor is a major endorsement for the quality of our projects, our vision for the future, and the ability of our management team to execute,” Anderson said. “The sale of this large share block to a significant long-term shareholder strengthens our capital structure as we look to further advance our production profile in Mexico.”
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Drill results from Great Panther acquisition
Gunajuato Silver also reported some significant drill results at its San Igancio mine, following that mine’s acquisition from Great Panther Mining last August. SI22-006 is being hailed as the best drill hole the company has drilled at any of its mines recently. With almost five meters of true width intersecting 1,219 g/t AgEq, which includes 0.42m true width of 6,981 g/t AgEq, this may represent a game changing result for the mine.
According to Anderson, the primary focus of the most recent San Ignacio drill program was to target the Melladito vein system with the goal of extending silver and gold mineralisation in the south and north areas of the mine.
This outstanding result will be followed up with additional drill holes attempting to follow the down dip extension of the vein within Guanajuato Silver’s 2023 drill campaign. In parallel, the company are in the midst of driving a 400-metre access ramp from Melladito to the analogous Purisima vein, which offers the potential for expanded production at San Ignacio.
