Mercedes
Operations
Mercedes is a fully mechanized, ramp-access underground mine with five active underground mining areas: Marianas, San Martin, Lupita, Diluvio, and Rey de Oro. Ore is hauled to and stockpiled on the surface near individual portals and then subsequently hauled to a common stockpile area near the jaw crusher.
Ore processing at the Mercedes mine consists of conventional milling and processing to recover gold and silver. Ore is crushed in three stages and fed to a mill. Milled ore undergoes agitated leaching, counter-current decantation, Merrill-Crowe precipitation, and smelting. Tailings undergo detoxification before deposition or being used as backfill in the mine.
Most Recent Operational Results
| Mercedes Operations | Q3 2024 (Three months ended September 30, 2024) | Year to Date |
|---|---|---|
| Gold ounces produced | 10,751 | 32,283 |
| Silver ounces produced | 76,939 | 161,872 |
| Gold ounces sold | 11,066 | 32,900 |
| Cash costs per gold ounce sold (1) | $1,285 | $1,349 |
| AISC per gold ounce sold (1) | $1,697 | $1,755 |
| Tonnes mined | 103,889 | 303,348 |
| Tonnes processed | 102,535 | 307,541 |
| Average gold grade mined (g/t) | 3.36 | 3.51 |
| Average gold grade processed (g/t) | 3.40 | 3.45 |
| Recovery rate gold | 96% | 95% |
| Average realized gold price (2) | $2,469 | $2,266 |
| Development (meters) | 2,025 | 7,374 |
1. Cash costs and AISC per gold ounce sold are Non-GAAP financial measures. Non-GAAP financial measures are not standardized financial measures under IFRS® Accounting Standards (“IFRS”) and might not be comparable to similar measures presented by other companies. Please refer to the Company’s most recent financial report for further explanation about Cash costs and AISC.
Production and Development
Mercedes’ Q3 2024 production was comprised of contributions from four main deposit areas: San Martin, Marianas, Diluvio and Lupita and totalled 10,751 ounces of gold and 76,939 ounces of silver. The San Martin deposit continued to contribute the majority of Mercedes’ Q3 2024 mined and processed tonnage. The average gold grade of ore processed during Q3 2024 was largely in keeping with the last two quarters, continuing the improvement in grade in comparison to the 2023 average of 2.77 g/t.
Silver production totaled almost 77,000 ounces during the third quarter, a substantial increase over each of the first two quarters of 2024 as well as the average quarterly silver produced from Mercedes since Bear Creek acquired the mine in 2022, as a result of favorable mineralogy at San Martin that allowed to significantly improve silver recovery rates.
Development totaled 2,025 meters during Q3 2024, a slight decrease from past quarters as development in the Marianas deposit was limited in favour of driving a new lateral ramp. This ramp was completed during the quarter and production from Marianas resumed toward the end of September 2024. Portal access to the Rey de Oro Alta deposit was also initiated during Q3 2024.
Planning for a new tailings storage facility (“TSF3”) continued during Q3 2024. A land use permit for TSF3 was issued during Q1 2024, however final permitting has been impacted by bureaucratic delays in the implementation of Mexico’s new mining law announced in 2023. Alternative plans for the deposition of tailings are underway, including utilizing a third-party engineering firm to engineer and design a dry stack tailings disposal option that is expected to move into the permitting phase during Q1 of 2025.
Production Outlook
Production from San Martin is expected to wind down during Q1 of 2025. Both the Marianas and Rey de Oro Alta deposits are expected to begin contributing ore in the later part of 2024 and be significant contributors in 2025. During the transition of production to these deposits in the near term, we expect production levels to be highly variable as we sequentially advance through differing grades in San Martin and advance development in Marianas and Rey de Oro.