Western Silver works to double Penasquito resource estimate

Vancouver-based Western Silver (Amex: WTZ) is hopeful of doubling the resource estimate at its "premier" Penasquito precious and base metal property in Mexico's Zacatecas state, VP of investor relations Jay Oness told BNamericas. The current drill program underway at Penasquito's Chile-Colorado and breccia zones may boost the resource to 500Moz silver and 4M-5Moz gold, said Oness. SNC Lavalin and M3 Engineers analyses previously pegged Penasquito resources at more than 200Moz silver and 2Moz gold, he said. "We are looking at putting out a news release probably some time in January [with results and estimates] after all the data has been reviewed," Oness said. A project feasibility study is expected to wrap up end-2004, leaving room for a late 2006, early 2007 project start-up, Oness said. The company may "shortly" announce "very large financing," which would help progress Penasquito exploration. Western Silver already considers its wholly owned, 39,000ha Penasquito property to be "one of the world's largest silver resources," according to a March company statement that based the claim on the SNC Lavalin-led mineral resource estimate. The estimate calculates that Cerro Colorado contains an indicated resource of 159Moz of silver, 1.36Moz of gold, 450,000t of lead and just over 1Mt of zinc. An additional 58.6Mt grading 29g/t silver, 0.31g/t gold, 0.24% lead and 0.69% zinc using the same US$4/t NSR cutoff is inferred, the company said at the time. A scoping study released in July indicated potential metal recoveries from the project's Chile Colorado zone at 112Moz of silver, 744,095oz of gold, 760,996t of zinc and 284,782t of lead over 12.2 years. Mine production was eyed at 20,000t/d and capital costs at US$149mn. Operating costs, including mine, mill and general administration, were put at US$5.40/t.