Guanajuato Silver (TSXV: GSVR) this morning declared that it is shuttering some operations as a result of the oncoming acquisition of the Bolanitos complex from Endeavour Silver.
The operation in question is the Cata processing plant, which the company says it is closing on a temporary basis as a result of an optimization effort being undertaken. With the acquisition of Bolanitos, Guanajuato will now have three processing facilities within a 20 kilometre radius, resulting in the need for optimization and the realignment of transport routes within the current hub and spoke processing model.
Upon the close of the Bolanitos acquisition, Cata will no longer receive mineralized material from the San Ignacio mine. To streamline operations, ore from the Valenciana Mines Complex will now be re-routed to El Cubo for processing, negating the need for Cata.
“For comparison, in 2024, the last full year in which information is available, Bolanitos plant utilization averaged 73%; while Cata and Cubo plant utilization was 60% and 66% respectively. This re-routing measure will ensure maximum utilization of the Bolanitos and Cubo mills while reducing costs incurred by having Cata on standby,” commented James Anderson, CEO of Guanajuato Silver.
It is currently expected that it will take 15 days for Cata to be placed on care and maintenance, after which the future of the facility will be evaluated.
Separately, Guanajuato also said this morning that it has lost a court case in Mexico connected to the the installation and use of NucTech’s mineral sorting equipment at the San Ignacio Mine, with NucTech claiming compensation for future equipment rentals over a ten year period. The courts have made an initial ruling that Guanajuato’s local subsidiary is liable to pay NucTech US$6.96 million in damages and to reimburse the Mexican peso equivalent of US$3.34 million in costs.
Guanajuato however has indicated that it will appeal the decision, on the grounds that the court was not presented with the technical evidence demonstrating the failures of the equipment. The appeal process is expected to take an estimated eight months.
Guanajuato Silver last traded at $0.53 on the TSX Venture.
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