• Your Questions, Our Answers

Q:Bolanitos was for many years your most profitable mine but in the 1st quarter of 2019 the operating costs increased. What went wrong with the mine and what are you doing about it?

Answer: Bolanitos enjoyed many years of profitability as our lowest cost mine thanks to the discovery of shallow, high grade orebodies and their development into new, low cost mines. However, like our other mines, Bolanitos is now a mature mine operating at the margins of the orebodies with higher operating costs at a time when metal prices are depressed. That requires our mine site managers, supervisors and miners to be more productive in order for the mine to operate efficiently. During the 1st and 2nd quarters of 2019, Bolanitos significantly underperformed with lower mine output and ore grades. In April, we identified several operating deficiencies, including mine-site management and supervision, mine planning, equipment availability and high arsenic in the concentrates. As a result, we recently transferred our experienced and successful operations manager from El Compas to turn around Bolanitos. We replaced several mine supervisors, revised the mine plan and purchased or rented additional mining equipment. We also started blending high and low arsenic ores and using an arsenic suppressor in the flotation circuit to reduce the arsenic content to acceptable levels in the concentrates. It will take some time for all these changes to positively impact our financial performance at Bolanitos but we should see the benefits of these remedial actions in the 2nd half of 2019.

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