Telson Mining Corporation (CVE:TSN) (OTCMKTS:SOHFF) is shifting its focus to the company’s 100%-owned Tahuehueto gold project in Durango State, Mexico, the miner announced Wednesday afternoon.
The company’s flagship asset, Tahuehueto is a district-scale epithermal mineralized system that Telson believes has the capability to become a substantial gold asset.
According to a January 2017 resource estimate, Tahuehueto has a total measured and indicated resource of nearly 490,000 ounces of gold at a grade of 2.5 grams per ton.
The decision to focus on advancing Tahuehueto comes after Telson said it has decided to curtail operations at its Campo Morado zinc mine in Guerrero State, Mexico following a work stoppage at the site.
Telson is concerned about the health and welfare of its Campo Morado workforce following a work stoppage, it told shareholders on Wednesday. The company said that a number of local workers have resigned, making it difficult to continue mining operations.
Falling zinc prices have also impacted Telson’s decision to curtail operations for the time being, it said in a statement.
“Neither of these issues alone would have necessarily led to the decision to curtail operation at Campo Morado, however, Telson's management and Board of Directors believe that the Company's focus in an improving gold market should be to complete construction of the Company's Tahuehueto gold mine in Durango State, Mexico,” the company added.
“Tahuehueto is Telson's flagship asset and once in production will shift the market's perception of Telson from primarily a base metals producer to a gold producer.”
Telson said that it is committed to working with the local community in and around the city of Arcelia, saying that it is “hopeful” that the community at large will recognize the benefit of having long-term production.
Exploration work at Tahuehueto has identified numerous veins outside of the current published reserves and resources. Once funding is secured, Telson plans to conduct an extensive drill campaign with the goal of increasing the resources and evaluate the possibilities of expanding Tahuehueto operations.
Telson envisions Tahuehueto as a 1,000 ton per day operation. Mine construction has advanced to nearly 70% completion.
Shares of Telson were trading at C$0.28 at Wednesday's close in Toronto.
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