Escobal
The Escobal Project is located in Guatemala, approximately 70 kilometres southeast of Guatemala City. All of the known mineral resources for the Escobal Project are located on the OASIS license, one of three Escobal Exploration Licenses. Tahoe operates the project from the town of San Rafael las Flores, located three kilometers from the project site.
Through 01 November 2010, 256 drill holes, totaling 70,442 meters, have been completed on the OASIS license of the Escobal Project. Drill campaigns in 2010 focused on infill drilling to upgrade the Inferred resource and step-out drilling to expand the resource. The Escobal Vein, which is predominately composed of sulphide mineralization, has now been intersected by drilling over 1700 meters along strike and 800 meters along dip; the vein remains open at depth and open to the east and west, where it is covered by alluvium and post-mineral volcanic rocks.
An updated NI 43-101 compliant resource estimate for the Escobal project, completed by Mine Development Associates (an independent mining consulting firm) reports Indicated Mineral Resources of 300.3 million silver equivalent ounces at an average grade of 612 AgEq g/t, representing a 144% increase in Indicated silver ounces from the previous resource estimate. Inferred resources total 95.2 million silver equivalent ounces at an average grade of 359 AgEq g/t. Significant exploration opportunities remain at Escobal and at numerous other regional vein targets.
The updated resource estimate is the basis for Tahoe’s recently issued Preliminary Assessment for the Escobal project, which was authored by M3 Engineering and Technology. The Preliminary Assessment envisions a 3500 tonne per day underground mine producing lead and zinc concentrates over a production life of 18 years, with the vast majority of precious metals reporting to the lead concentrate. The Preliminary Assessment forecasts production to average more than 19 million ounces of silver annually at a total cash cost of less than US$3.00 per ounce of silver, net of by-product credits, using metal prices of $18.00 per ounce silver, $1100 per ounce gold, $0.95 per pound lead, and $0.90 per pound zinc. After tax net present value at a 5% discount rate is $1.729 billion, with an after tax internal rate of return of 51% on initial capital costs of $326.6 million. The contemplated operation would provide direct employment of approximately 500 employees in Guatemala.For additional information regarding the updated resource estimate and Preliminary Assessment, refer to SEDAR.
Work to advance the Escobal Project to a feasibility stage is proceeding, with advanced engineering and metallurgical work underway. Tahoe anticipates initiating underground exploration in the first half of 2011 to establish underground drilling platforms to further delineate the known resources and explore for extensions of the Escobal vein.
Escobal PA (PDF – 9.6M)
About the Region
Escobal is approximately 3 km from San Rafael las Flores, a town of approximately 3,000 people and approximately 70 km southeast of Guatemala City by paved road. Access to the area also is possible from the northeast on a paved highway via the town of Mataquescuintla. The local climate consists of two major seasons; a rainy season between May and November and a dry season between November and May. Mining activities are expected to be conducted year-round.
The project area lies within mountainous terrain interspersed with rolling hills and valleys. Elevations range from 1,300 m in the valley on the west end of the Escobal Vein to 1,800 m in the drilled east extension. The high mountain range of Montaña Soledad Grande north and east of Escobal rises to an elevation of 2,600 m.
Vegetation is characterized by natural mountain forest species that consist of oak, pine and cypress varieties and lower strata scrub brush species. Agricultural products in the area include corn and beans for local consumption and commercial production of onions, tomatoes and coffee.