The Escobal mine is located in southeast Guatemala, approximately 40 km east-southeast of Guatemala City. The deposit is an intermediate-sulfidation silver-gold-lead-zinc vein deposit hosted in Tertiary andesite and volcaniclastic sedimentary rocks. Continuous precious- and base-metal mineralization extends over wide (10m to locally 50m) zones defined over 2,400m laterally and 1,200m vertically. As of January 1, 2017, Measured and Indicated mineral resources for the Escobal deposit totaled 368 million silver ounces at an average grade of 323 grams per tonne (g/t), with significant quantities of lead, zinc and gold. Proven & Probable Reserves are 23.7 million tonnes at an average grade of 351 g/t silver, containing 267.5 million ounces of silver.
Tahoe is mining the Escobal deposit by underground longhole stoping methods with processing by differential flotation to produce precious metal-rich lead and zinc concentrates. In 2016, the Escobal mine produced a record 21.2 million ounces of silver in concentrate at total cash costs per ounce of silver produced net of byproduct credits of $5.84, with all-in sustaining costs (“AISC”) of $8.06.per ounce produced net of byproduct credits. The mine is currently operating at the expanded design rate of 4,500 tonnes per day (tpd).
In 2017, silver production at Escobal is targeted at between 18 and 21 million ounces with target ranges for total cash operating costs and AISC net of byproduct credits of $7.00 to $8.00 per ounce and $9.50 to $10.50 per ounce, respectively. The 2017 production and cost guidance for Escobal is similar to the initial guidance for 2016 issued in January 2016.
Escobal is approximately three km from San Rafael las Flores, a town of approximately 3,000 people and approximately 70 km southeast of Guatemala City by paved road. Access to the area also is possible from the northeast on a paved highway via the town of Mataquescuintla. The local climate consists of two major seasons; a rainy season between May and November and a dry season between November and May. Mining activities are conducted year-round.
The project area lies within mountainous terrain interspersed with rolling hills and valleys. Elevations range from 1,300 m in the valley on the west end of the Escobal Vein to 1,800 m at the easternmost portion of the vein identified to date. The high mountain range of Montaña Soledad Grande north and east of Escobal rises to an elevation of 2,600 m.
Vegetation is characterized by natural mountain forest species that consist of oak, pine and cypress varieties and lower strata scrub brush species. Agricultural products in the area include corn and beans for local consumption and commercial production of onions, tomatoes and coffee.