Telson Mining Corporation (CVE:TSN) (OTCMKTS:SOHFF) has revealed that, with improving market prices for zinc and good relations with the local community, it will be renewing mining operations at Campo Morado in Mexico.
Campo Morado is a polymetallic base metal project in the state of Guerrero, Mexico, which has mining and milling equipment capable of producing up to 2,500 tonnes per day. Four months after purchasing Campo Morado, Telson brought the mine back into operation initiating pre-production in October 2017.
It declared commercial production in May 2018, operating the mine continuously for 22 months until August 2019 when operations were stopped as a result of declining zinc prices.
In a statement, after the market close on Friday, Telson said that with “improving conditions” all necessary steps are being taken to restart mining and milling operations at the project.
The company added that over the next four weeks the mine will be taken out of care and maintenance and brought back into production. Telson anticipates initiating full mining and processing operations by the start of December.
"We are very pleased that we have achieved the conditions to restart productive operation in Campo Morado. The mine is ready to produce mill feed for more than two years without new underground development. During the care and maintenance period the processing plant received full maintenance and the crusher and SAG mill had new liners installed," said Telson Mining CEO Antonio Berlanga.
"With the addition of new reagents, we hope to increase the gold and silver recovery in the flotation concentrates and we will continue refining the testing process to potentially recover precious metals from the existing tailings and as soon as funding allows, advance the Leachox Process through second phase testing to determine the viability of installing this proven technology at Campo Morado,” he added.
The Telson Mining boss noted that the first phase of Leachox testing achieved up to 60% gold and 80% silver recoveries at Campo Morado and said it has the potential to transition Campo Morado from a base metal producer into a silver and gold precious metal producer.
Meanwhile, the company pointed out that, once Campo Morado is put back into commercial production, it expects to be able to start making outstanding payments to Nyrstar Canada (Holdings) Ltd and in the meantime is exploring other financing alternatives. Telson has an outstanding US$6 million debt under a loan agreement with Nyrstar which includes principal and interest.
Telson Mining is a Canadian mining company with two Mexican gold, silver and base metal mining projects. Aside from the Campo Morado polymetallic base metal mine, Telson's Tahuehueto mining project is located in north-western Durango State, Mexico.
Tahuehueto is a district-scale epithermal mineralized system that Telson believes has the capability to become a substantial gold asset.
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