Darren Pylot
CEO
Capstone Mining
/
View from the Top

Underground Highway Helps Boost Ore Production

Wed, 10/16/2019 - 18:26

Q: How will Capstone achieve its targeted 30 percent increase in production at the Cozamin mine?
A: By connecting some underground mining ramps into one large one-way loop underground, we are creating a “highway” underground to get more ore efficiently out of the mine. That is all we have to do: the mill already has the capacity to take on another 33 percent. The bottleneck has been getting the ore from the underground. Deeper into the mine we lose capacity in the shaft, so we have to increase our ramp capacity. The total cost of this work is about US$5 million and it will be completed at the end of 2020. To achieve this, we have hired a secondary mining contractor, a company specifically dedicated to complete the ramps and the ventilation shafts.
Q: How has zinc mined at the San Rafael zone impacted the economics of Cozamin?
A: We have a zone that is producing a very high-grade zinc and low-grade copper. At San Rafael, there is zinc that we mine to utilize surplus mill capacity and increase byproduct revenue. It has added more revenue and lowered our copper cost.
Q: What are your expectations for zinc and copper prices in the near term?
A: We are comfortably on schedule to re-estimate both resources and reserves and issue a new technical report by 4Q20. After discovering the MNFWZ SE-Ext. in 2016 we drilled for two years; culminating in a technical report to double the then three-year mine life. Subsequently, we set about infilling the significant inferred resources excluded from the mineral reserve and discovered a significant up-dip extension to the zone as well. Seeing the possibility to double mine life again we fast-tracked drilling in 2019 and will complete a technical report in 4Q20.
Q: At what stage are you in terms of extending the life of the Mala Noche Footwall Zone (MNFZ)?
A: In 2016, we found a significant new resource in the MNFZ and since that time we have been drilling the resource from virtual reserves. Last year, we added four more years of life. We believe we can drill over the next 12 months and obtain four to five years of reserves. You can comfortably see a 10-year margin of life ahead, at least with what has been discovered. We are drilling as fast as we can to convert that resource to reserve.
Q: What makes Cozamin such a remarkably low-cost mine?
A: It is a low-cost mine because the copper grade is quite high and we also produce zinc, lead and silver. An increase in silver prices has increased our revenue as well. The mining width is also favorable but the grade of copper is the key driver. We are also using technology and innovation to improve safety and lower our costs further. The main technologies we use are unmanned scoops and equipment. Underground mines are a high safety risk, so if our people do not have to be on the machine they are out of harm’s way. You also can operate more machines with fewer people. We have also been able to improve the recovery of our metals by innovating our rotation plan.
Q: What is your short-term strategy in Mexico regarding growth and how will you achieve this?
A: We would love to have more mines in Mexico. It is a great place to operate, it is a mining-friendly jurisdiction, and we understand the authorities clearly. There is some risk with the new government changing the Mining Law but we have not seen any issues so far. All in all, we want to continue at Cozamin and discover more ore. We started in 2006 with a three-year mine life running at 1,000t/d. Now, we are running at just under 4,000t/d with plenty of life left. The state of Zacatecas and its workers are incredible as well.