Bolivar Mine

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Summary

Location: Chihuahu, Mexico   Stage: Production
Size: 6,616 ha   Mill: Piedas Verdes (6 km to mine)
Ownership: 100.00%   Capacity: 30,000 tpm (expanding to 60,000 tpm)
Metals: Copper-Zinc-Silver
 		   By-product cash costs1: USD $1.25/lb of Copper
 

Overview

Bolívar comprises 12 mining concessions covering approximately 6,616 hectares within the municipality of Urique, in the Piedras Verdes mining district of Chihuahua, Mexico. During 2011, the Company completed the construction of the Piedras Verdes Mill, which is located only 6 kilometres from the Bolivar Mine and has an initial capacity of 1,000 tpd, resulting in a declaration of commercial production on November 29, 2011. A construction project to increase production to 2,000 tpd is expected to be completed in the first half of 2013. 

Production Summary

  3 Months Ended 12 Months Ended 
  Jun 30, 2012   Sep 30, 2012   Dec 31, 2012   March 31, 2013   March 31, 2013
Copper (000 lb) 1,910   1,473   2,163   1,885   7,431         
Zinc (000 lb) 3,817   1,267   904   259   6,246         
Silver (oz) 52,544   39,239   55,143   54,062   200,988         

(For a detailed summary of production please click here)

With the planned expansion to 2,000 tpd in mid-2013 the Company will continue to add value to its Mexican Operations with increases in base and precious metals production at the Bolivar Mine.  

NI 43-101 Reserves and Resources

On August 30, 2012 an updated NI 43-101 compliant resource estimate was released on the Bolivar mine property. This updated resource report has substantially increased the life of mine at Bolivar and shows the upside of potential of the property at depth and along strike. A summary of the NI 43-101 resource estimate is provided below. 

  Cutoff
CuEq (%)		 Tonnes Cu % Ag (g/t)  Zn % CuEq (%)1 Au (g/t) 
Proven and Probable Reserves  0.66% 7,456 0.76% 19.52 0.33% 1.04% 0.23
Measured and Indicated
Resources 		 0.66% 15,404 0.79% 19.40 1.01% 1.26% 0.2
Inferred Resources  0.66% 6,164 0.73% 18.10 0.93% 1.17% 0.3

1 Gold content was not considered in the Copper Equivalent ("CuEq") calculation
2 Measured and Indicated Resources include Proven and Probable Reserves 

(To see the full NI 43-101 resource tables please click here)

Geology

The Bolivar Property is situated within the Piedras Verdes Mining District, which is within the major north-northwest trending Sierra Madre Precious Metals Belt extending across the states of Chihuahua, Durango and Sonora in northwestern Mexico. Lower Cretaceous sedimentary and volcanic rocks underlie the district. These rocks are also considered as the “basement rocks” in the area and are overlain by an up to 3 km thick sequence of Upper Cretaceous to Lower Tertiary predominantly intermediate to felsic volcanic rocks of the Lower Volcanic Suite (LVS).  

In the Bolivar area the LVS is reported to be approximately 750 m thick. The rocks of the LVS are overlain by younger continental rhyolitic and dacitic ignimbrites (up to 1.5 km thick) of the Upper Volcanic Suite (UVS), which are interpreted to be Middle Tertiary in age. In general, rocks in the area trend northwest and dip gently to the northeast. These rocks are also cut by several northeast trending faults.

Skarn-type Cu-Zn-Ag-Au mineralization in the Bolivar area is structurally controlled and forms mineralized zones that are close to structures. Mineralized zones occupy pre-existing fault structures and extensional openings formed during mineralization. The mineralized zones are dominated by calc-silicate minerals and variable quantities of quartz, calcite, and chlorite. Sphalerite and chalcopyrite are the predominant sulphides, commonly ranging from 5% to 30% (combined), with occasional massive sulphide zones. Sulphides occur within the carbonate rocks, which they replace, a common feature in skarn-type mineralization.

Going Forward

Currently, an exploration drilling programme is underway at the Bolivar mine to continue expanding known mineralization along the copper-magnatite horizon within the lower Skarn at Bolivar. Sierra Metals is also expanding the mill at Piedras Verdes mill and plans to ramp production up to 2,000 in mid-2013.

Footnotes

1 For the twelve months ended December 31, 2013