TORONTO (miningweekly.com) – Mexico-focused miner Santacruz Silver Mining is on schedule to fully ramp up production at the refurbished Veta Grande mine to 350 t/d by the end of March, to produce lead and zinc concentrates, in addition to the main silver and gold output.

The TSX-V-listed junior producer said on Monday that commissioning of the plant circuits began in early January, alongside mine preparation and development that was started in November, with efforts focused on the La Flor, Armados, El Cigarrero and Veta Grande veins.

As a result, the first concentrate deliveries to offtake partners were completed early this month.

The company advised that commissioning and the production ramp-up will continue throughout February, with focus on increasing recoveries and the head grade of mill feed.

"The first phase of commissioning of the refurbished Veta Grande processing plant has gone according to plan. Going forward the mill feed for the plant is expected to be sourced solely from newly developed underground mine workings, which should result in a steady increase of the silver grades and improved recoveries," stated Santacruz CEO Arturo Préstamo.

Santacruz had entered into a definitive agreement with Minera Contracuña and Vetalinda Compania Minera (together Contracuña), under which Santacruz had secured a thirty-year right to explore, mine and operate Contracuna's Veta Grande and Minillas silver/gold/zinc/lead mineral properties, which covered about 1 100 ha within Zacatecas, in central Mexico.

Among other terms of the agreement, Santacruz would operate the properties on a 60%/40% net profits interest basis (NPI), with Santacruz holding 60% and Contracuña holding 40%. In the event the price of silver rose to greater than $22/oz, the NPI would change to 55%/45%.

Préstamo noted that the Veta Grande mine would also provide additional ore feed for the Rosario mine and mill, located about 180 km away by road, to take advantage of unused capacity and realise immediate increased cash flow to the company.

The operations were located in one of Mexico's most prolific silver, lead, zinc and copper regions, which included the Fresnillo silver mine, the Madero mine (operated by Peñoles) and the Cozamin mine, operated by Capstone Mining.

Santacruz produced 832 284 silver-equivalent ounces in 2015.