Mercedes operation. (Image courtesy of Premier Gold Mines).
Premier Gold Mines (TSX: PG) announced that since restarting operations in June at its Mercedes operation in Mexico, the mine is generating positive cash flow under its revised production plan.
The recovery follows a two-month stoppage caused by the covid-19 pandemic, which led the Canadian company to come up with a simplified production plan whose focus has been on improving operating margins. To achieve such a goal, the miner reduced mill throughput and this resulted in lower costs and positive cash flow.
The second phase of this plan entails gradually increasing mill throughput back to the plant capacity of 2,000 tonnes per day.
“Based on the success to date, priorities are the continued development and mining of the Diluvio, Lupita and Lupita Extension zones,” Premier said in a media statement. “During the first half of Q3, Mercedes has delivered improved operating results and operating cash flow supported by higher than planned gold production and lower unit operating costs. While this is a successful initial step forward, our objective is to achieve stronger and predictable long-term performance and operating margins.”
According to the Thunder Bay-based company, ongoing exploration at Mercedes has returned positive results and is prioritized on extending mine life through the growth of reserves in proximity to existing mine workings and the delineation of future resources at the San Martin and Marianas zones.
Mercedes is an underground gold-silver mine located 250 kilometres northeast of Hermosillo in the state of Sonora in northern Mexico. Mineralization on the property is epithermal low sulphidation.