Pan American’s La Colorada mine plan: capex, schedule and method shifts for engineers
Reviewed by Joe Ashwell
First reported on MINING.com
30 Second Briefing
Pan American Silver has cut initial capital for the La Colorada Skarn expansion in Zacatecas to $1.9 billion from $2.8 billion, with a revised after-tax NPV of $2.6 billion, 17% IRR and mine life potentially extended to 2068. The new plan replaces a 50,000 t/d block cave with staged development centred on a 15,000 t/d plant and more selective long-hole mining of higher-grade skarn zones, targeting peak output of 19.1 million oz silver per year over five years. The skarn currently hosts 265.4 million indicated tonnes at 36 g/t Ag, 2.85% Zn and 1.37% Pb, plus 61.7 million inferred tonnes at 30 g/t Ag, 2.55% Zn and 0.95% Pb.
Technical Brief
- Revised development swaps the original 50,000 t/d block cave for staged, selective long-hole stoping.
- New 15,000 t/d plant is central to Phase 1, deferring higher-tonnage infrastructure to a later phase.
- Development period is estimated at six years, funded from cash flow of Pan American’s existing operations.
- Existing La Colorada mine is forecast to produce 5.8–6.25 Moz Ag in 2026 at AISC $33.25–$35.75/oz.
- Skarn access will initially use a ramp driven from current underground workings, minimising new surface disturbance.
- Resource base includes 265.4 Mt indicated and 61.7 Mt inferred, containing ~368 Moz Ag plus Zn–Pb credits.
- Nearly 94,000 m of additional drilling post-resource cut-off is excluded from the current PEA, offering upside potential.
- Polymetallic skarn mineralisation (Ag–Zn–Pb–Cu) beneath and adjacent to existing workings supports future by-product revenue flexibility.
Our Take
With La Colorada already seeing at least four new high-grade veins identified in 2026 drilling, the enlarged skarn resource base (silver, zinc, lead) suggests Pan American Silver could keep flexing mine plans between skarn and vein ore to manage costs and grade over a life now stretching toward 2068.
The combination of large contained zinc and lead in the La Colorada skarn and Pan American’s exposure to price swings seen in the January 2026 precious-metals selloff means this Mexico and Central America asset could act as a partial hedge within the portfolio, giving more optionality to run the plant for base-metal credits when silver prices weaken.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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