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REGIONAL NEWS - LATIN AMERICA First Majestic Starts Up at Del Toro The recent startup of First Majestic Silver's Del Toro mine in Mexico will help drive the company's 10-year silver production total past the 10-million-oz mark in 2013. First Majestic has four other active silver mines in Mexico. First Majestic Silver produced the first silver at its new Del Toro silver mine in the state of Zacatecas, Mexico, in January 2013. Initial production at Del Toro is from a 1,000-mt/d flotation circuit, which is expected to achieve commercial production by April. A 1,000-mt/d cyanidation circuit is scheduled for completion by mid-year 2013. First Majestic also remains on schedule to double Del Toro mill throughput to 4,000 mt/d (2,000 mt/d flotation and 2,000 mt/d cyanidation) by the third quarter of 2014, when it will become the company's largest operation, producing 6 million oz/y of silver and significant amounts of lead and zinc. Three underground mines—San Juan, Perseverancia/San Nicolas and Dolores— deliver ore to the Del Toro processing plant. First Majestic has four other producing silver mines in Mexico: La Parrilla, San Martin, La Encantada and La Guitarra. Del Toro is located 60 km southeast of La Parrilla. First Majestic produced 9.1 million silver equivalent oz during 2012 (8.3 million oz of silver) and is forecasting production of 12.3 million to 13 million silver equivalent oz (11.1 million to 11.7 million oz of silver) during 2013. First Majestic President and CEO Keith Neumeyer said, "The start-up of the Del Toro silver mine marks a very important 14 E&MJ; • MARCH 2013 milestone for First Majestic. This year, the company will celebrate its 10-year anniversary by breaking through 10 million oz of silver production as a result of Del Toro coming on stream." Chesapeake Sees Major Mine Potential for Metates Chesapeake Gold Corp., a Canadian junior company headquartered in Vancouver, has reported the results of an NI 43-101-compliant prefeasibility study (PFS) of its 100%-owned Metates gold-silver project in Durango state, Mexico. The study describes a $4.36-billion, 120,000-mt/d mining project based on proven and probable mineral reserves of 18.5 million oz of gold, 526 million oz of silver, and 4.2 billion lb of zinc. Metates mine life is estimated at 25 years, with production averaging 659,000 oz/y gold, 15.9 million oz/y silver, and 190 million lb/y zinc over that time frame. Average life-of-mine gold equivalent cash cost is estimated at $489/oz, net of zinc credits. The Metates project is located 160 km northwest of the city of Durango and 175 km north of the coastal resort city of Mazatlan. The PFS contemplates a conventional truck-and-shovel, open-pit mining operation with a nominal 120,000 mt/d throughput. Crushed ore will be fed to a conventional SAG and ball mill circuit followed by a single-stage flotation plant to produce a bulk sulphide concentrate. The comminution and flotation circuits will be built as two separate lines, each rated at a nominal 60,000 mt/d. The sulphide concentrate will transported downhill via a 126-km-long slurry pipeline for further processing at a site at Ranchito southwest of Metates. At Ranchito, the sulphide concentrate will be treated in a pressure oxidation plant, followed by cyandiation and Merrill-Crowe recovery of gold-and-silver doré. High-purity oxygen to feed the pressure oxidation plant will be manufactured on site in a dedicated plant owned and operated by a third party and provided under an "across the fence" arrangement. Acidic solutions from the pressure oxidation process will be neutralized with ground limestone and lime produced from an onsite quarry and then co-disposed with the cyanide leach tailings in an adjacent storage facility. Zinc will be recovered from the pressure oxidation solutions via solvent extraction/ electrowinning methods to produce Special High Grade zinc ingots. Overall gold and silver recoveries from ore through doré production are estimated at 89% and 76%, respectively. Overall zinc recovery to ingots is estimated at 85%. Chesapeake has identified a number of opportunities that could further enhance the viability of the Metates project going forward. These include: • Further evaluation of electric power supply options. • Evaluation of a staged development option, where capital to fund expansion from a 60,000-mt/d to a 120,000-mt/d ore processing rate is funded out of cash flow. • Assessment of alternative technologies for the production of high-purity oxygen, with potential savings in both capital and operating costs. • Optimization of the layout of site facilities at both the Metates and Ranchito sites to minimize capital costs and enhance operating efficiencies. • Appraisal of the opportunities for liquefied natural gas to fuel the mine haulage fleet. Chesapeake is sufficiently financed to advance the Metates project toward completion of a full feasibility study. www.e-mj.com