Outcrop Silver targets 2027 pilot output after Santa Ana work plan approval
Colombia's mining agency approved the plan for up to 40 tonnes a day, while an environmental licence remains required before construction.
Mara Quinlan
Outcrop Silver & Gold Corporation TSEOCG OTCMKTSOCGSF FRAMRG said on Thursday Colombia's National Mining Agency approved the technical work plan for a Santa Ana pilot mine designed for up to 40 tonnes a day. The wholly owned Colombian project targets pilot production in 2027, but construction still requires an environmental licence.
Outcrop shares TSEOCG closed down 3.7 per cent at C$0.26 in Toronto at 4:00 p.m. EDT on Wednesday. That close preceded Thursday's announcement.
The approval covers the Programa de Trabajos y Obras for Concession Contract HFL-151. Outcrop has filed its environmental impact assessment with CORTOLIMA, the regional environmental authority, which must approve it and issue the licence before construction begins.
The pilot production decision is not based on a feasibility study of mineral reserves demonstrating economic and technical viability. Outcrop's interim financial statements show C$19.25 million in cash at May 31 and C$15.87 million of operating cash outflows over the nine months ended that date.
"We are targeting first production from the pilot operation in 2027, while continuing to drill with four rigs at Santa Ana to upgrade and grow mineral resource estimates," chief executive Rob Bruggeman said in the release.
The pilot would mine the La Porfía vein system through the La Ivanna portal using selective cut-and-fill mining with backfill. Outcrop plans to recirculate process water and store tailings in a dry-stack facility, returning a significant portion underground as backfill.
The planned circuit combines crushing and grinding with gravity concentration and flotation, followed by smelting and refining to produce silver-gold doré. It is designed to operate without cyanide or mercury.
Read more: GoGold Resources reports 1.86Moz silver-equivalent output and US$288M cash
Outcrop's Sept. 14 resource update reported 29.9 million ounces of silver-equivalent indicated resources and 27.9 million ounces of inferred resources. The estimate is effective Sept. 10, and resources that are not reserves do not have demonstrated economic viability.
Indicated resources average 519 grams per tonne silver-equivalent, while inferred resources average 369 grams per tonne. The estimate used a cut-off of 130 grams per tonne for veins evaluated with cut-and-fill mining.
A preliminary economic assessment is planned after filing the technical report for the updated resource. It will examine a medium-scale underground operation, with expansion subject to regulatory approvals and capital availability.
The pilot is intended to supply bulk metallurgical and operating data for that larger development scenario, including mining dilution, recoveries and costs. Project Argentum also includes a research and innovation centre in Falan, Tolima, which opened to the public on Oct. 4.
Outcrop expects CORTOLIMA's environmental licence in early 2027, before planned pilot construction and commissioning that year.
