Peru gives Silver Mountain OK to restart Reliquias mine

The company currently owns a 2,000 tpd processing plant and an operating tailings dam with enough capacity for at least 2 years at maximum throughput.

Silver Mountain Resources (TSXV: AGMR; US-OTC: AGMRF) has been given the green light to begin operations at the Reliquias mine and the Caudalosa plant in Peru after the project was recognized as an “active site” by the mining ministry. 

The ministry’s confirmation, said Silver Mountain, validates “the company’s efforts in demonstrating the operational history and readiness of the Reliquias-Caudalosa mining complex.” Mining at Reliquias was previously suspended due to low metals prices.

Once restarted, the Reliquias project would deliver about 2.2 million oz. of silver-equivalent production annually over a nine-year life, based on estimates presented by a preliminary economic assessment (PEA) earlier this year. Construction of the mine is expected to take 10 months, as all essential infrastructure is already in place.

The PEA estimates the project’s after-tax net present value to be US$85 million (at a 5% discount rate), with an after-tax internal rate of return of 51%. Initial capital costs are estimated at US$24.8 million, with a payback period of 1.8 years.

The project currently requires no further environmental clearances as existing permits from previous operations remain fully enforceable. Silver Mountain recently obtained an extension of the main environmental permit, allowing it to operate the mine until 2034.

Silver Mountain Resources shares were up 25% to 5¢ apiece on Thursday afternoon in Toronto, for a market capitalization of $16.7 million.