Operations

El Mochito Mine
Operations
The El Mochito property is located in northwest Honduras, near the town of Las Vegas, approximately 88 km southwest of San Pedro Sula and 220 km northwest of the capital city, Tegucigalpa. Production began in 1948 and has continued for 70 years almost continuously. The property consists of an underground zinc-lead-silver mine and a concentrator producing separate zinc and lead concentrates. Concentrates are trucked daily to Puerto Cortes for storage and then shipment once sufficient material is stockpiled.
Optimization Activities

The Ascendant management team has taken detailed review of current mine operations with the mine staff and its technical consultants to construct a plan to optimize operations at the El Mochito Mine with the goal of delivering sustainable profitability. The Company has identified several immediate optimization opportunities that should have a material impact on cash flows in the near-term and based upon the review to date, management remain highly confident that the mine production rates in excess of 2,200 tpd combined with lower unit costs to the mid or low $50/t range can be achieved over the next 12 to 18 months.

The Company is currently focused on immediate opportunities to increase mine production and underground development, improve maintenance programs, review equipment status and focus on an overall reduction of operating costs. The initial optimization plan target areas are listed below:

Underground Safety
Underground Safety
We remain committed to improving the overall safety standards at El Mochito. Ascendant has continued to instill an improved safety culture at the mine and addressed deficiencies in various safety areas such as adding fire extinguishers, refuge areas and emergency signage underground.
Unproductive Time
Reduce Unproductive Time per shift
Currently it is estimated that up to a third of every shift is lost in unproductive time due to logistics, poor planning and communications. Ascendant management believes an improved focus on scheduling, more detailed supervision and accountability should reduce this lost time to more acceptable levels, adding additional productive hours per day.
Horizontal Development
Horizontal Development
During the latter part of 2016 horizontal development was reduced to very low levels. In order to ensure sufficient working areas and to gain access to new higher grade zones management are aiming to accelerate underground development in excess of 1,000 ft per month. Increased underground flexibility should support a more stable operating environment moving forward.
Haulage Logistics
Haulage Logistics
Maximizing ore tonnes per truck trip and increasing the number of trips per shift can be achieved, including appropriate staffing of vehicles to maximize productive hours per day. Various programs are being implemented including driver priority at shift change, better truck loading and better underground planning to ensure over utilization of the fleet is maximized. For every additional truck cycle per shift management estimates that this could add approximately 48tpd per truck. As such assuming 7 trucks are available this could add more than 350 tpd of combined ore and waste movement.
Fleet Availability
Fleet Availability and Utilization
Continued improvement in the maintenance programs remains a priority given the age of much of the fleet. A lack of preventative maintenance in the past has resulted in lower availability which Ascendant is currently addressing. Once availability is enhanced, the focus will shift to improving fleet utilization. We note fleet availability rates have already begun to show improvement and are now closer to 70% as compared to 60% in the second half of 2016 given more focus on preventative as opposed to reactive maintenance. That said, overall utilization rates remain low at closer to 55% due planning and communication issues. As part of this process we plan to undertake a review of the fleet to determine the optimal size which may lead to fleet renewal to support sustainable long-term production targets.
Operating Costs
General Operating Costs
Ascendant is placing renewed focus on reducing costs related to production and to ancillary activities with an initial target of a 10% reduction. Ascendant is in the process of commencing several initiatives to reduce overall input costs, external service costs and extraneous expenses.
Site Facilities

Over its long mine life the site has evolved from a residential camp with all the supporting infrastructure and housing. That said, outside of some senior management and guest housing the bulk of the housing has been turned over to the local community and is now part of the town of Las Vegas. The operations consist of an underground zinc-lead-silver mine and a nominal 2,300 t/d flotation concentrator producing zinc and lead concentrates. The site has two shafts, one for production (3,500 tpd capacity of ore and waste) and one for men and materials. The Nameplate Capacity of the concentrator is reported to be 2,300 t/d, although current operations are somewhat below this level at around 2,000 tpd as underground development work is re-accelerated to better match mine production to milling capacity. The ability to expand the plant to 3,000 tpd is deemed possible for a relatively modest investment subject to increased resource development. Mineralized material is mined by underground methods from the Nacional, Santo Niño, Lower San Juan, Salva Vida, Yojoa, La Leona, Imperial and Canoe orebodies and is treated in a centralized processing plant. Zinc and lead concentrates are produced by differential flotation and shipped to a warehouse at the port of Puerto Cortés, 35 km north of San Pedro Sula on the Gulf of Honduras. Approximately 30% of process tailings are used as backfill for the mined stopes.

Details map
Photos
El Mochito mill photo 1
El Mochito mill photo 2
Reserves and Resources

Over its long mine life the site has evolved from a residential camp with all the supporting infrastructure and housing. That said, outside of some senior management and guest housing the bulk of the housing has been turned over to the local community and is now part of the town of Las Vegas. The operations consist of an underground zinc-lead-silver mine and a nominal 2,300 t/d flotation concentrator producing zinc and lead concentrates. The site has two shafts, one for production (3,500 tpd capacity of ore and waste) and one for men and materials. The Nameplate Capacity of the concentrator is reported to be 2,300 t/d, although current operations are somewhat below this level at around 2,000 tpd as underground development work is re-accelerated to better match mine production to milling capacity. The ability to expand the plant to 3,000 tpd is deemed possible for a relatively modest investment subject to increased resource development. Mineralized material is mined by underground methods from the Nacional, Santo Niño, Lower San Juan, Salva Vida, Yojoa, La Leona, Imperial and Canoe orebodies and is treated in a centralized processing plant. Zinc and lead concentrates are produced by differential flotation and shipped to a warehouse at the port of Puerto Cortés, 35 km north of San Pedro Sula on the Gulf of Honduras. Approximately 30% of process tailings are used as backfill for the mined stopes.

The economic mineralization at the El Mochito mine occurs as both manto and chimney skarn deposits in Lower Cretaceous limestones. The El Mochito property is located in northwest Honduras, near the town of Las Vegas, approximately 88 km southwest of San Pedro Sula and 220 km northwest of the capital city, Tegucigalpa. Production began in 1948 and has continued for 70 years almost continuously. The property consists of an underground zinc-lead-silver mine and a concentrator producing separate zinc and lead concentrates. Concentrates are trucked daily to Puerto Cortes for storage and then shipment once sufficient material is stockpiled.

The ore deposits are structurally controlled with the manto deposits are typically flat dipping, following the bedding of the host rock, and are relatively extensive in horizontal dimension, rendering them suitable for room and pillar stoping methods. Chimney deposits are typically steeply dipping and cut across the host rocks over a significant vertical distance. In general, the chimneys are of higher grade than the mantos. The chimneys are mined principally by longhole stoping methods.

The last published mineral resources and mineral reserves for El Mochito were released by the previous owner, Nyrstar, as at the end of 2015 in a news release dated 27 April, 2016. The historical resources estimates are provided below.

2015 Historical Mineral Reserve Statement

Metal

Unit

Measured
Resources

Indicated
Resources

Measured
Plus
Indicated
Resources

Inferred
Resources

 

Mt

1.38

4.03

5.40

3.86

Zinc

%

5.22

4.72

4.85

5.11

Lead

%

1.93

1.65

1.72

1.38

Silver

g/t

62.10

38.80

44.70

35.00

Nyrstar, 2016b, 2015 Mineral Resource and Mineral Reserve Statement 27 April, 2016.

 

2015 Historic Mineral Reserve Statement

Metal

Unit

Proven
Reserves

Probable
Reserves

Total
Mineral
Reserves

 

Mt

0.57

1.34

1.91

Zinc

%

4.59

4.94

4.84

Lead

%

2.63

2.27

2.38

Silver

g/t

77.40

47.60

56.50

Nyrstar, 2016b, 2015 Mineral Resource and Mineral Reserve Statement 27 April, 2016.

 

The mineral resources and mineral reserves presented are historical in nature, as described in National Instrument 43-101 - Standards of Disclosure for Mineral Projects (NI 43-101). They were prepared prior to the agreement to acquire the property by Morumbi and a Qualified Person has not yet verified them as current. At this time, the relevance and reliability of the estimates are not known. The estimates are classified using the categories set out in the Canadian Institute of Mining, Metallurgy and Petroleum's CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines as required by NI 43-101. However, Morumbi is not treating the mineral resources or mineral reserves as current.

The mineral resources are reported inclusive of mineral reserves. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

The 2015 mineral resources and mineral reserves are not supported by a recent NI 43-101 Technical Report. The most recent NI 43-101 report was filed by Breakwater Resources Ltd. in March, 2010.

Scientific and Technical Information

The scientific and technical information contained on this website relating to the El Mochito Mine is supported by, is derived from, and in some instances is a direct extract from the technical report entitled "NI 43-101 Technical Report on the El Mochito Zinc-Lead-Silver Mine, Honduras" dated September 9, 2016 (effective date of December 31, 2015), prepared by Bogdan Damjanovic, P.Eng., B. Terrence Hennessey, P.Geo., Christopher R. Lattanzi, P.Eng., David Makepeace, M.Eng., P.Eng. and Jane Spooner, P.Geo. found HERE.

Exploration

The known ore deposits at EL Mochito are structurally controlled along known fault lines providing clear exploration targets to expand total resources at site, albeit at greater distances from the shaft locations. The mine has a long and successful track record of finding new manto and chimney deposits along the prominent fault and mineralized trend systems, suggesting that the geological model should continue to serves as a guide for finding future resources. These trends, along with long surface drill holes, have provided good exploration targets to find addition mineralization. In addition to exploration near mine, the El Mochito property comprises six mining concessions totaling approximately 11,000 ha, much of which has not undergone significant exploration in recent years and serval historical targets are available to follow up.

Exploration map
History map
Cross section