SILVERCO MINING LIMITED (Sico-TSXV, Sikov-OTCQB) in a Preliminary Economic Evaluation (PEA) of the Cusi Mine in Mexico determined that it is possible to restart operation with low capital and an annual production of 2.5 million ounces of silver. It is targeted to restart treatment in late 2026, with an extension to a full year by 2027.
The mine has an after-tax net present value of $104 million and an internal rate of return of 94% with a nine-month payback at a base silver price of $44.58 per ounce. “We believe the PEA confirms that Cusi is one of the most compelling primary silver restart opportunities globally,” said Mark Airanto, President and CEO of Silverco.
With low initial capital, quick redemptions and strong leverage from rising silver prices, Cusi is positioned to deliver near-term production and cash flow. Most importantly, ongoing drilling and restarting provides a clear upside to both volume and mine life. “We currently have sufficient funds on hand to fund the restart and continue our previously announced 30,000 meter drilling program which is testing strike and downhole extensions, in addition to drilling.”
He went on to say that work is also underway at the mine and mill to support the restart, including dewatering and mine rehabilitation, the recruitment of key discipline managers and the start of the bidding process for an underground mine contractor.
The PEA envisions less than US$20 million in initial capex for 2.5 million ounces per year of production at a sustaining cost (AISC) of US$26.75 per ounce.
The Cosi underground mine is located about 120 kilometers west of Chihuahua City and 20 kilometers south of Cuautomoc City. The site allows access to a pool of experienced workers with a population of over 1.0 million people. The ore will be transported from the mine via 30-tonne highway trucks to the company’s existing 1,200-tonne-per-day processing facility, located approximately 40 kilometers from the mining areas. The mine uses a conventional crushing and flotation circuit designed to produce high-value lead and silver concentrates.
Shares of Silverco Mining fell 2.9%, or 31 cents, to $10.20 in early trading Monday. Shares are trading in a 52-week range of $16.67 to $1.60.
Sierra Metals began commercial production at Cusi in 2014. In 2017, Sierra Metals discovered the Santa Rosa de Lima vein system – a stock vein structure suitable for bulk mining methods. Operations at the mine were suspended in 2020 due to the COVID-19 pandemic. During this period, excavations identified a lower extension in the Promontorio area. In 2023, Sierra Metals entrusted Cusi with care and maintenance, citing lower silver prices and a strategic shift towards metal-based production at its Bolivar and Yauricocha operations. In its final year of production, Cusi achieved record production of 1.5 million ounces of silver equivalent (AgEq) in 2022 at a sustainable cost of US$23.20 per ounce. Mill utilization that year was only 63%.
