Palmarejo

Palmarejo, the world’s 5th largest primary silver mine, is located in the state of Chihuahua and its operations consist of open pit and underground facilities. The deposits at the mine have silver in the upper parts and gold in the deeper parts, along with base metal mineralization, and are classified as epithermal deposits.

Valentín Ruiz Corredor, of indigenous origin, discovered the mine in 1818 when he came across pure silver rocks while walking around the Periquera Hill. Tomas Pelayo, an experienced miner, joined forces with him and began the legal procedure to exploit the mine. Ruiz Corredor later sold his stocks to Tomas Pelayo and other shareholders, with Pelayo going on to buy the stocks from each of them until he was the sole owner of the mine. When Pelayo died the mine was passed on to his heirs, who sold the mine in 1823. Palmarejo was a large silver producer between 1878 and 1880, under the ownership of Justina Almada Gonzales de Sayas. When Mexican President Porfirio Díaz increased the opportunities for foreign investment in Mexican mining, the Palmarejo Mining company was created by Eduardo Apelgarth, and mining activities continued under Apelgarth. The mine was exploited in the 1970s by Minas Huruapa, a company from Zacatecas, but the company abandoned operations in the 1980s when it was thought that the deposit was depleted. Palmarejo was taken over by Coeur in 2009, which quickly disproved the depletion theories.

Palmarejo produced 8.2 million ounces of silver and 106,038oz of gold in 2012. Total metal sales in 2012 were US$442.1 million, representing about half of the company’s total metal sales. Coeur Mining expects 2013 production at Palmarejo to be 7.7 to 8.3 million ounces of silver and 98,000 to 105,000oz of gold.

The company spent $19.9 million in the Palmarejo district in 2012 to discover new silver and gold mineralization and define new ore reserves. Underground and surface drilling was conducted around the Palmarejo mine, and the Guadalupe, La Patria and Independencia deposits within the district. As a result of this exploration investment, Palmarejo’s proven and probable reserves totaled 53.1 million ounces of silver and 665,000oz of gold at year-end. Silver and gold measured and indicated resources grew 169% from 17.0 million to 45.7 million ounces of silver and 370% from 205,000 to 964,000oz of gold compared to year-end 2011. Inferred resources totaled 22.1 million ounces of silver and 457,000 oz of gold. The exploration budget for Palmarejo for 2013 is US $15.8 million.