Tahoe Resources has released an NI 43-101 compliant preliminary economic assessment (PEA) for its underground Escobal silver project in southeastern Guatemala that indicates potential for the project to become one of the world’s premier silver mines in terms of size, cost and economics. Feasibility-level test work on the sulphide resources has demonstrated recoveries of 87% for silver, 75% for gold, 83% for lead and 83% for zinc, with the majority of precious metals reporting to lead concentrates.

Based on current test results, the lead concentrates are expected to contain between 15,000 and 30,000 g/mt of silver, with very little in the way of penalty elements. The project will also produce zinc concentrates. Silver contained in concentrates is projected to average more than 19 million oz/y over the first five years of production. Concentrates will be bagged and delivered to port in sea containers.

Escobal’s mine life is estimated at 18 years at a planned production rate of 3,500 mt/d. Total cash cost of production is expected to average $3.05/oz of silver produced over the 18-year mine life, net of gold and base metal by-product credits. Over the life of the project, mine production is expected to total 22.6 million mt at average diluted grades of 415 g/mt silver, 0.47 g/mt gold, 0.71% lead and 1.22% zinc. Capital cost to develop the project is estimated at $326.6 million.

The Escobal project feasibility study is currently under way, and Tahoe expects to complete it in 2011. Baseline studies and environmental documentation have been ongoing for nearly two years. Permitting for full mine operations is scheduled concurrently with the feasibility study, and Tahoe anticipates the project can be fully financed and ready for a construction decision by May 2012.

Mining at Escobal will utilize longhole stoping methods, with paste backfill used to fill open voids. The mine will be developed via two primary development declines for the transportation of personnel, equipment and materials, as well as transport of the mined resources to the surface for processing. Additional primary development will include two ventilation shafts and drifts connecting the primary declines. A total of 13,000 m of primary and secondary underground development is contemplated during the 18-year mine life. The primary declines will also serve as platforms for exploration and definition drilling during the feasibility phase of the project.

Mineral processing will use differential flotation to produce lead and zinc concentrates for sale to a third-party smelter.