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Sierra Metals Mexico
Sierra Metals Peru

Cusi Mine

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Summary

Location: Chihuahua, Mexico   Stage: Production
Size: 11,319 ha   Mill: Malpaso Mill (40km)
Ownership: 100.00%   Capacity (tpm): 19,500
Metals: Silver-Lead   Deposit Type: Low Sulphidation Epithermal Veins
By-product cash cost1: USD$5.29/oz silver    

Overview

The Company’s Cusi Property encompasses 60 concessions covering 11,319 hectares that include 12 inactive mines, each located on a mineralized structure, and which lie within 40 kilometres of the Malpaso Mill. These former mines produced high-grade silver but became inactive when silver prices dipped several decades ago. Management believes the district is under-explored and has not been subject to modern exploration methods, and is engaged in an active exploration programme to develop the various ore bodies on the property.

During the exploration and development stage, Dia Bras has been able to utilize the Malpaso Mill to generate revenues from the sale of development mineralized rock. The Company optimized the vat leaching circuit at the Malpaso Mill in order to achieve the combined flotation/leaching recovery above 85% for transitional rock, meaning partially oxidized rock.

The Companys goal is to reach a constant production rate of 500 tons per day in 2014.

Production Summary

Cusi Production 3 Months Ended
  Sep 30, 2013 Sep 30, 2014 % Var.
Tonnes processed (t) 25,516 36,845 44%
Daily Throughput 292 421 44%
Silver (oz) 127,093 133,296 5%
Flotation  127,093 133,296 5%
Lead  (000 lb) 253 359 42%
Gold (oz) N/A 173 N/A

(For a detailed summary of production please click here)

NI 43-101 Resources

On March 27, 2014 the Company announced an updated NI 43-101 resource estimate on the Cusi Mine. These resources are in two areas of the Cusi mine currently in commercial production, Promontorio and Santa Eduwiges, as well as in other mines where the Company is doing underground development, such as La Gloria/Minerva, Monaco/Milagro and others as well as in two prospective areas, La India and San Juan.

The cut-off data for data used in this resource estimate was December 31, 2013. A summary table of the NI 43-101 resource estimate is provide below using a 90 g/t cutoff grade.

Indicated Resources
Tonnes
Ag grade
(gpt)
Ounces
Ag
 
Au
(gpt)
Pb
(%)
Zn
(%)
Santa Eduwiges
457,000
248.5
3,649,000
0.07
0.88
0.72
Promontorio
920,000
234.7
6,941,000
0.04
0.3
0.33
La India
170,000
184.9
1,012,000
0.16
0.13
0.25
Monaco/Milagro
46,000
201.8
298,000
0.81
0.88
1.58
San Nicolas
35,000
286.2
320,000
0.07
0.38
0.31
San Juan
37,000
165.7
196,000
0.01
0.17
0.15
Total Indicated Resources
1,665,000
231.9
12,416,000
0.08
0.46
0.46

 

Inferred Resources
Tonnes
Ag grade
(gpt)
Ounces
Ag
 
Au
(gpt)
Pb
(%)
Zn
(%)
Santa Eduwiges
275,000
167.5
1,480,000
0.06
0.8
0.63
Promontorio
1,314,000
280.5
11,848,000
0.07
0.27
0.26
La India
248,000
162.2
1,293,000
0.14
0.13
0.25
La Gloria/ Minerva
309,000
178.5
1,774,000
0.11
0.2
0.07
Monaco/Milagro
191,000
127.9
787,000
0.14
0.53
0.76
San Nicolas
333,000
234.6
2,512,000
0.06
0.22
0.2
San Juan
67,000
151.3
326,000
0.01
0.17
0.14
Total Inferred Resources
2,737,000
227.5
20,020,000
0.08
0.31
0.30

Geology

Rocks in the Cusi area are mainly volcanic rocks of the Sierra Madre Occidental, predominantly volcanic rocks of Eocene-Oligocene age, continental deposits of the Upper-Middle Tertiary, and in smaller proportion, Quaternary deposits. The geologic column comprises a sequence of volcanic rocks, with a minimum thickness of 750 m in “La Bufa” mountain, but possibly thicker since its base is not exposed nor it has been reached by the deepest mining operations. Volcanic rocks in the area are of the Lower Volcanic Series, the base of which is represented by felsic lavas and tuff dated at 37 Ma. They overlie a sequence of 37 Ma old agglomerates and andesitic lavas with a smaller amount of intercalated volcano-clastic sediments and andesitic tuffs.

The Upper Volcanic Series unconformably overlies the earlier series and is represented by felsic, intermediate and mafic volcanic rocks with an age range of 36-27 Ma. The mafic rocks originated during periods of faulting and are represented by andesitic basalts dated at 28 Ma. The rhyolitic rocks, such as tuffs, breccias and ignimbrites, belong to the Sierra Madre Occidental Superior Volcanic Group.

The rocks are intruded and altered by monzonitic intrusions and cut by rhyolitic dykes associated with Ag-Pb-Zn-Cu-Au mineralization.

Epithermal (silver dominant) and base-metal veins occur as hydrothermal fissures filling faults and fractures. The veins are generally narrow, vuggy and chalcedonic and fill major structures.  The faults that host veins are undulatory in both strike and dip and fracturing and brecciation increase at inflection points that often correlate with cross structures/veins.  Broad zones of disseminated silver mineralization occur at some of these structural intersections, most notably at the Promontorio mine.

The length of the major structures varies between 500 to 2,000 m, with high grade zones and also barren sections.  Second and third-order faults are of much shorter length, on the order of tens to a few hundred meters.  Alteration is mainly silicification, oxidation and  chloritization.

Going Forward

Currently, the Company is completing an aggressive drill programme to expand the disseminated silver type mineralization at the Promontorio Mine and test other high priority targets on the project including the El Gallo and Santa Eduwiges targets. Additionally, at the Promontorio and Santa Eduwiges mines development work to extend ramps to depth and development of stopes to access high-grade ore will be completed. 

Footnotes

1 For the three months ending June 30th, 2014

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