Issue link: http://resourceworld.uberflip.com/i/1239546
A P R I L / M A Y 2 0 2 0 www.resourceworld.com 39 Peñoles comes to fruition, this could result in another record-breaking year for the company, given in 2019 production was 1.6 million ounces of silver equivalent. Next, re-commissioning the upgraded Veta Grande Mine should result in improved recoveries. In 2019, silver equivalent pro - duction during Q4 and for fiscal 2019 at the Veta Grande Project increased 50% and 140% respectively when compared to 2018. In large part this increased production reflected the company's access to mineral - ized material with higher head grades as a consequence of reaching the lower levels (Level 6 and 5 respectively) at the Garcia and Armados mines where in-situ mineral- ized material is now contributing to better head grades. During November and December pro- duction averaged approximately 420 tonnes per day (tpd) with an upward trend in the zinc and lead concentrates which is forecast to continue and by the end of February the milling capacity had risen to 650 tpd, while maintaining the head grades being fed to the mill. After re-commissioning, Silva antici - pates "the mill and TSF improvements are expected to increase the tonnage milling capacity, improve the recovery efficiencies and re-usage of wastewater from the TSF at Veta Grande making it a more efficient plant." Investors should watch for the results of the 3,000-metre drilling program underway at the Rosario Project aimed at improv - ing on the mine dilution that caused a 26% decrease in production in the second half of the year. The challenge here is to get the all-in costs lower. As of Q2, 2019 all-in costs were reported at US $16.84/oz while the project could produce up to 1.5 million ounces of silver equivalent at full production. And finally, watch for exploration news from the company's exploration proper - ties, which are divided into three almost contiguous concession groups, the Veta Grande properties, Minillas property and Zacatecas properties. Santacruz recently completed a Phase 1 diamond drill hole exploration program of 43 holes totaling 13,665.60 metres where significant mineralized intersections were encountered at the Veta Grande vein to the northwest and below the Garcia Mine workings. At this location, assay results range from no significant intersections in VG18-009 to 280.10 g/t silver over 1.59 metres in drill hole VG19-014A. Drilling within the Armados Mine from the gen - eral ramp below Level-4 resulted in several significant intersections of the Armados vein that range between 129.67 and 235.69 g/t silver over widths that range between 1.00 and 3.76 metres. Intersections into the Navidad vein intersected grades ranging between trace up to 668.64 g/t silver over 1.95 metres in NA18-006. To date, the Panuco deposit, one of several identified on the property, is the only mineral resource estimate calculated and reported for the Veta Grande Project. Applying a nominal cut-off value of 100.0 g/t silver equivalent for the Panuco deposit, the Inferred Mineral Resource estimate is 3,954,729 tonnes grading 136.00 g/t silver, 0.14 g/t gold, 0.012% lead and 0.110% zinc or 153.20 g/t silver equivalent which represents 19,472,901 ounces of silver equivalent. These recent exploration results would lead one to believe there is room for growth in the number of potential ounces. If all goes to plan, Santacruz will be back on track to be a mid-tier silver producer within the year, but ultimately the price for silver will be the determining factor. In April, the Bank of America revised down its average sliver forecast to US $16.56/ oz, a 9% cut from its previous forecast of $18.26/oz, although other analysts have forecast prices above US $20/oz. Analysts have noted that weak industrial demand will weigh heavily on the silver market. May silver prices last traded at $12.57/oz. Santacruz shares have ranged from 0.05- 0.21 cents over the past year and now range between 0.09 and 0.11 cents to capitalize the company at approximately $18.4 million. n MINING