The Cusi Mine had remained in care and maintenance since April 1, 2020, due to the government-mandated shutdown to contain the advancement of COVID-19. This care and maintenance period allowed the management team to complete an optimized review of the entire mine operation. These changes have included an updated interpretation of the geological system at the Santa Rosa de Lima structure from a stockwork tonnage system to a vein model system. This change is expected to better control and improve head grades and reduce dilution. Mine development to bypass the previously announced area of subsidence and provide access to economic ore to provide feed for the mill has been advanced during this period.
The Company is currently drilling from the surface targeting its recently announced discovery of a new high-grade silver zone in an area called Northeast - Southwest System of Epithermal Veins adjacent to the Santa Rosa de Lima zone, as mentioned in the press release dated June 18, 2020. Plans to drill an additional 1,000 meters to understand better the mineralization of the new zone are underway.
As of its last National Instrument 43-101 published report in Dec 2017, Cusi has over four million tonnes of mineral resources in the Measured and Indicated category, with an average silver grade of 224 grams per tonne providing for contained metal of 59 million silver ounces. Management expects to update the mineral resource estimates which will include the latest available drilling information.
Silver production at Sierra Metals
Management expects that silver will become a significant contributor to the Company's revenue mix with the restart of the Cusi Silver Mine when combined with the silver by-product credits from the Company's Yauricocha and Bolivar Mines and the recent marked improvement in the silver metal price.
In 2019, Sierra Metals produced a total consolidated output of 3.4 million ounces of silver derived from its three mines. The Yauricocha mine in Peru was the largest contributor to the silver production with 1.8 million ounces, followed by Cusi with a production of 936,000 ounces, and Bolivar in Mexico with 640,000 ounces.
Copper is the most significant contributor to the Company's consolidated sales revenues, followed by precious metals then zinc and lead.
Quality Control
All technical data contained in this news release has been reviewed and approved by Americo Zuzunaga, FAusIMM CP (Mining Engineer) and Vice President of Corporate Planning is a Qualified Person and chartered professional qualifying as a Competent Person under the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves.
Augusto Chung, FAusIMM CP (Metallurgist) and Consultant to Sierra Metals, is a Qualified Person and chartered professional qualifying as a Competent Person on metallurgical processes.