The Escobal deposit is an intermediate-sulfidation silver-gold-lead-zinc vein deposit hosted in Tertiary andesite and volcaniclastic sedimentary rocks. Continuous precious- and base-metal mineralization extends over wide (10m to locally 50m) zones defined over 2,400m laterally and 1,200m vertically. As of January 23, 2014, Measured and Indicated resources for the Escobal deposit totaled 434 million silver ounces at an average grade of 346 grams per tonne (g/t), with significant quantities of lead, zinc and gold.
Tahoe Resources Inc. is mining the Escobal deposit by underground longhole stoping methods with processing by differential flotation to produce precious metal-rich lead and zinc concentrates. In 2014, the Escobal mine produced 20.3 million of silver in concentrate with 10, 900 of gold, 10, 400 tonnes of lead and 13, 400 tonnes of zinc. Mill feed was 1.25 million tonnes with average grades of 585 g/t silver, 0.42 g/t gold, 0.95 percent lead and 1.43 percent zinc. The mine is currently operating at the initial design rate of 3,500 tonnes per day (tpd) and preparing to increase the production rate to 4,500 tpd. Proven and Probable mineral reserves as of July 1, 2014 for the Escobal mine total 31.4 million tonnes at an average silver grade of 347 g/t, containing 350.5 million silver ounces in the life of mine plan.
The November 2014 Feasibility Study authored by M3 Engineering & Technology Corp. forecasts a 20-year mine life with annual production of 19.1 million silver ounces and 22.4 million silver-equivalent ounces over the first 10 years of the mine life at a total cash cost of about $7.20 per silver ounce (net of byproducts). After tax net present value of the Escobal mine at a 5 percent discount rate is $1.52 billion at metal prices of $18.00/oz silver, $1, 300.00/oz gold, $0.95/lb lead and $0.90/lb zinc.
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.