Tahoe (T.THO) aims for growth while ramping up Guatemala silver mine

Stockhouse Editorial
0 Comments| January 22, 2014


Emerging silver miner Tahoe Resources Inc. (TSX: T.THO, Stock Forum) aspires to be a dividend-paying growth story, spokesman Ira Gostin told an luncheon meeting with analysts in Vancouver, Tuesday.
 
But for now, the company aims to concentrate on ramping up its Escobal silver mine in Guatemala after recently reaching the commercial production stage.
 
A 40%-owned Goldcorp Inc. (TSX: T.G, Stock Forum) affiliate, Tahoe is headed by CEO Keith McArthur, and a team of former Glamis Gold and Hecla Mining Co. (NYSE: HL, Stock Forum) executives, who have been involved in the construction of several well known mines, including the Marlin gold mine, which is also located in Guatemala.
 
The immediate goal this year is to optimize the mill to the 3,500 tonnes per day level, a move that would enable the company to reach its targeted production rate of between 18 million and 21 million ounces of silver annually.
 
The company also plans to complete a study in the third quarter of this year, one that will look at the feasibility of raising production to a rate of 4,500 tonnes per day.
 
However, before making any moves on the mergers and acquisitions front, the company plans to pay down its $75 million debt, Gostin said.
 
He said the company hopes to grow its silver resources which now stand at 367.5 million ounces  in the indicated category, plus 36.7 million ounces of inferred silver.
 
Gostin said the company has taken a lot of pride in having been able to deliver the mine on schedule.
 
It currently employs 800 people, of which 96 per cent are Guatemalan nationals. “We will stack them up against any miners in the world,’’ he said.
 
Total production costs at the site are estimated at $10.50 to $11.50 per ounce, putting the mine in position to be profitable given that silver is trading at US$19.91 an ounce this week.
 
Trading at $19.54 on Tuesday, Tahoe has seen its stock price jump from under $13 in last June 2013. That’s up from $6 when the company launched an initial public offering in June 2010.
 
Gostin said the company does not fear that Goldcorp will cut its stake in order to fund a $2.6 billion bid for Osisko Mining Corp. (TSX: T.OSK, Stock Forum).

Disclosure: Tahoe Resources is a Stockhouse client. But the company has not paid for this content.


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