Silver Mountain Resources (TSX: AGMR) is considering bringing a second underground mine into production sooner than anticipated, just over a month after restarting concentrate production at its Reliquias operation in Peru. The review follows new drilling at Caudalosa that returned 3.30 metres grading 569 g/t silver and 3.11% copper.
The company reported Thursday that it has received assay results covering the first 11,500 metres of a planned 17,500-metre drill program at the past-producing Caudalosa mine in central Peru.
The drilling identified mineralization across several vein systems, including shallow high-grade intersections that have prompted management to evaluate whether Caudalosa could supply additional ore to the company’s existing processing facility.
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Silver Mountain began producing bulk and zinc concentrates from Reliquias in September, using an initial stockpile of approximately 45,000 tonnes. The company is targeting processing throughput of 800 tonnes per day during the second half of 2027.
An earlier Caudalosa restart could provide another source of feed during that ramp-up, although Silver Mountain has not announced any revision to its throughput guidance.
The strongest reported interval came from the Paulinita vein, where Hole SMR-DC26-0019 intersected 3.30 metres grading 569 g/t silver, 0.83 g/t gold, 3.11% copper, 0.99% zinc, and 0.48% lead.
That interval included 0.55 metres grading 2,793 g/t silver, 3.15 g/t gold, and 9.83% copper.
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Other notable Paulinita results included: Hole SMR-DC26-0028 with 1.35 metres grading 919 g/t silver, 1.44 g/t gold, and 2.66% copper; and Hole SMR-DC26-0027 with 2.40 metres grading 262 g/t silver, 1.01 g/t gold, and 2.49% copper.
Drilling outside Paulinita also returned mineralized intervals. At the Caudalosa vein, hole SMR-DC26-0008 intersected 3.30 metres grading 172 g/t silver, 0.91 g/t gold, 2.39% zinc, and 1.12% lead.
Another hole at the same vein returned 2.20 metres grading 178 g/t silver and 1.10 g/t gold, while drilling at Cerro de Pasco intersected 1.15 metres grading 240 g/t silver and 3.34% lead.
According to the company, mineralization was also encountered beyond the area covered by Caudalosa’s historical resource estimate, suggesting that previously defined mineralized zones may extend into areas that have not yet been incorporated into an updated estimate.
Silver Mountain launched its Caudalosa drilling campaign in March with an initial planned program of 14,000 metres, targeting extensions of known veins and additional mineable zones.
The program has since increased to 17,500 metres, with assay results now available for approximately 66% of that total.
The potential restart is being considered alongside production ramp-up activities at Reliquias, where the company achieved its first concentrate production in mid-September. Silver Mountain said at the time that concentrate shipments were expected to begin in October.
Management’s latest assessment focuses on whether shallow mineralization at Caudalosa, together with existing mine infrastructure, could support an earlier return to mining and increase utilization of the operating processing facility.
Caudalosa has a historical inferred mineral estimate of 1.55 million tonnes grading 14.43 ounces per tonne silver, 2.80% zinc, 2.79% lead, and 2.12% copper.
Silver Mountain has not made a production decision for Caudalosa. Any restart remains subject to technical evaluation, permitting, and other requirements.
Silver Mountain last traded at $3.10 on the TSX.
