La Colorada Property, Mexico

The La Colorada mine encompasses a trio of underground silver-lead-zinc mines situated in the Zacatecas state of Mexico. Among the mines, the Candelaria and Estrella mines are currently operational while the third, Recompensa, currently has no mining activity.

Pan American Silver is the owner of the project, whose mining history dates back to 1925. The area has seen various mining endeavours until 1997 and then Pan American secured an option agreement with Minas La Colorada and started commencing small-scale production in January 2001. The La Colorada processing plant currently employs two separate circuits for the treatment of sulphide and oxide ores.

The company is currently undertaking an expansion of mining operations into the La Colorada Skarn, a polymetallic skarn deposit positioned below and adjacent to the existing La Colorada mine. This Skarn project requires an initial capital investment of approximately $2.8bn.

The life of mine of the La Colorada property is estimated to extend till 2035.

Location of the La Colorada mine

The La Colorada property is located in the Chalchihuites district in the state of Zacatecas, Mexico. The property lies approximately 100km south-east of Durango city and 155km northwest of Zacatecas city.

Pan American’s interests span 56 mining concessions, covering a combined area of 8,840ha, inclusive of the La Colorada property.

Geology and mineralisation at La Colorada

The La Colorada property resides within the prolific Zacatecas mining district, part of the  Mexican Silver Belt. The Sierra Madre Occidental mountains and the associated volcanic belt host many significant deposits in the silver belt.

The La Colorada property specifically exhibits epithermal intermediate-sulphidation Ag-Pb-Zn vein, carbonate replacement deposits (CRD), and polymetallic skarn mineralisation. The majority of the mineralisation of economic significance is hosted in quartz veins with major mineralised veins strongly brecciated and locally oxidized.

Reserves at La Colorada

The proven and probable reserves at the La Colorada property are estimated at 9.2 million tonnes (mt), grading 294g/t silver, 0.20 g/t gold, 1.25% lead, and 2.18% zinc as of June 2023. The contained metal is estimated at 86.3 million ounces (moz) of silver, 59.2 kilo-ounces (koz) of gold, 114.5 kilo-tonnes (kt) of lead, and 199.3kt of zinc.

Mining method at La Colorada

Two primary mining methods are employed at La Colorada, which involve cut-and-fill and sublevel long-hole stoping (SLS). The methods used vary, based on local ground conditions and the dip of the veins.

The current life of mine (LOM) plan spans from 2023 to 2035, targeting specific production rates, followed by a ramp-down in 2036, the final year of the plan. Mining of lower-grade reserves is postponed, resulting in an average planned annual silver production of 6.5moz from 2024 to 2029, and 5.8moz from 2030 to 2035.

The main access ramps and haulage drifts are constructed at 3.5m in width and height. The long-hole mining sequence commences with the development of spiral declines, providing flexible access to the ore body at various elevations.

At the La Colorada mine, spiral declines of 4.0m width and 4.5m height are developed with a maximum gradient of ±15%. Sublevel access crosscuts are then created from the declines to intersect the vein at the desired elevation, enabling the development of sublevel drifts along the vein strike. Accesses are typically 3.5m × 4.0m while sublevel drifts are 2.6m × 3.8m, with a standard vertical sublevel spacing of 10m.

For the cut-and-fill method, the development sequence begins with the construction of accesses to the mineralised zones, designed with inclinations of up to ±15% from either the footwall drift or the main ramps, which are usually situated 100m from the veins.

Scooptrams facilitate ore and backfill tramming to and from stopes while haul trucks are utilised for underground haulage. Ore is hoisted to the surface using a shaft, exceeding 2,300tpd in capacity. Alternatively, ore can also be hauled to the surface via two access ramps in each mine.

Sulphide processing plant

The sulphide ore undergoes initial crushing in a C-100 primary jaw crusher, with the crushed product conveyed to a ball mill. The output is then directed to a trio of cyclones for size classification. The cyclone underflow is recycled to the ball mills for further grinding, forming a closed loop within the grinding circuit.

The cyclone overflow enters the lead flotation circuit, which consists of six tank cells, four for rougher flotation and two for scavenger flotation. Concentrates from the cleaner circuit proceed to a lead concentrate thickener, and the slurry underflow is directed to a filter press for dewatering. The resulting filter cake is stored in a lead-concentrate holding area, for shipment to a smelter.

Tailings from the lead scavenger circuit are introduced to the zinc flotation circuit conditioning tank, where reagents are added. The zinc flotation equipment and process are similar to those of the lead flotation circuit. Concentrates from the rougher cells move to the zinc cleaning circuit, with tailings directed to the zinc scavenger circuit. After filtering, the zinc concentrate is stored in a smelter for shipment.

Oxide processing plant

Oxide ore is initially crushed in a primary jaw crusher and then further reduced by a secondary cone crusher. The crushed ore is conveyed to a ball mill, and the milled product is pumped to cyclones for size classification.

The cyclone underflow is returned to the ball mill for additional grinding, with the product recirculated to the cyclone for classification. A dilute cyanide solution is introduced during the grinding process to initiate the leaching of gold and silver.

The cyclone overflow is fed to two primary leach thickeners. The resulting overflow is sent to the pregnant solution tank while the slurry underflow is sent to a series of seven agitated leach tanks. Following leaching, the leached solids are passed through rinse thickeners for further metal recovery, while also reducing the cyanide content of the tailings.

The pregnant leach solution (PLS) is channelled through clarifiers to remove suspended solids and then through a vacuum tower to extract dissolved oxygen. Zinc dust is added to precipitate gold and silver from the solution.

The solution, with metal precipitate, is passed through filter presses to separate the precipitate. The filtered precipitate is mixed with refining fluxes and smelted in a gas-fired furnace to purify the contained metal. The molten metal is then poured into moulds to form doré bars.

Site infrastructure at La Colorada

The La Colorada property is accessible from Durango via a 120km paved highway followed by a 23km gravel road. A similar road network connects the property to Zacatecas City.

Pan American has secured power supply agreements with the national power utility, Comision Federal de Electricidad (CFE), to meet current operational demands. The mine also maintains on-site diesel generators to provide backup power as needed.

Water for the mining operation is sourced from the underground mine dewatering systems, tailings facilities, and wells on the La Colorada property.

Details of the Skarn project

The Skarn deposit is proposed to be mined using the sublevel caving method, accessed via decline ramps and two ventilation shafts. The preliminary economic assessment (PEA) for the La Colorada Skarn project was announced in December 2023.

A 50,000tpd processing plant is proposed to be constructed that will use selective zinc and lead flotation to produce silver-bearing mineral concentrates. Production is estimated at an average rate of 2,003tpd of zinc concentrates grading 59% zinc and 846tpd of lead concentrates grading 61% lead.