Western Silver looks to double resources

[G-khan]

Western Silver looks to double resources

By: Tim Wood

Posted: 2003/10/31 Fri 03:00 EST | © Mineweb 1997-2003

NEW ORLEANS -- Western Silver [WTZ] president and chief operating officer, Tom Patton, says the company expects to double resources at its Penasquito project in Mexico. The company is preparing a new resource calculation for release in January that could result in a rerating to bring Western into line with the other silver stocks it must compete with. The expectation is for half a billion ounces of silver and five million ounces of gold in a polymetallic deposit that a recent scoping study found economic at current metal prices. If that large a resource base is confirmed, then Western should show up well undervalued compared with its peers, more so because there is a clear intention to advance the project to production and because Mexico is a comparatively low risk area.

Patton says the district potential for Penasquito means it makes sense to keep drilling off the deposit on the premise that a higher mining rate could be achieved, rendering higher returns from the project since overall unit costs would decline. The current scoping study forsees a plant processing 20,000 tonnnes per day, but Patton would like to raise that to between 40-50,000 tonnes per day. “We’ll stop drilling when we know the size of the operation,” he says.

Meanwhile the company continues with engineering preparation in anticipation of production. The company is likely to close another round of financing before year-end. Further funding is available from in the money warrants following an earlier round of financing in the 2002 at 65 cents.

Patton says investors should be attracted to the “massive blue sky” in Penasquito underscored by his belief that it is morphing into a district scale project. With stability provided by proximity to the United States, a well-trained workforce, a nearby smelter that requires lead concentrate, local economic needs and pro mining politicians, Patton emphasis Penasquito’s obvious advantages relative to competitors, many of which are content to remain options on the price of silver.

Patton says he doesn’t place any store in the doomsday scenarios that are the foundation for massive metal price predictions, but he is confident of double-digit silver prices within twelve to twenty four months.



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