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Sierra Metals set to double mill capacity at Mexican mine and lower production costs

Published: 08:59 30 Sep 2013 EDT

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In a move set to reduce the per-pound cost of production, Sierra Metals Inc. (TSE:SMT) is to double mill capacity at its Bolivar copper, zinc and silver mine to 2,000 tonnes per day, the Vancouver-headquartered miner of base and precious metals announced Monday.

The doubling of capacity at the mill, six kilometres distant from the Mexican mine that comprises 12 mining concessions covering approximately 6,616 hectares, comes care of a new circuit, which went on-line on September 20, adding 1,000 tonnes per day (tpd) of capacity, equalling the original 1,000 tpd circuit and thus doubling the mill capacity.

The mill at Piedras Verdes has increased daily throughput as the new circuit is being tuned and adjusted, with throughput now over 1,700 tpd and on track to increase to 2,000 tpd during the upcoming month of October.

Sierra Metals took the additional measure of installing a leased, 1,250 kva generator in order to sidestep delays with the installation of the power substation that will provide power via the company’s newly-constructed 10 km power line. At present, the mill is operating on a combination of generator power and line power. 

When work on the power substation is completed, which is anticipated by year-end, the mill will operate off the national grid power system.

"The increase to 2,000 tonnes per day at the Piedras Verde plant is another important milestone achieved by the Mexico operating team,” said president and CEO, Daniel Tellechea, in a company statement released with the announcement.

“At this rate, we expect the production costs per pound of copper to be reduced significantly.”

The company plans to continue operating the mill at the new throughput rate throughout 2014, while evaluating an additional boost in rate that would take the per day rate up another 1,000 tonnes.

Shares in the company closed up the session prior to the announcement, adding 13 cents in Toronto to hit $2.25 per share, an increment of more than 6 per cent.

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