Pan American Silver has expanded its La Colorada mine in Mexico with the commissioning of a new sulphide ore processing plant.

The company estimated capital spending at the mine to total around $163.8m over the period 2014 to 2017.

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The plant started processing sulphide ore, achieving production throughput rates of more than 1,400tpd and more than 14,000t has already been treated.

Until the company completes the mine shaft and additional underground development, throughput rates are planned to be slightly reduced.

"The expansion should lead to lower-cost, higher-margin silver production for Pan American."

Pan American Silver president and CEO Michael Steinmann said: "I am proud of our team's ability to safely and successfully complete the new sulphide plant ahead of schedule and on budget without incurring a single lost-time accident.

"The expansion at La Colorada together with the expansion of our Dolores mine form our core areas of growth in Mexico, and should lead to lower-cost, higher-margin silver production for Pan American."

The expansion also includes construction of a new mine shaft, which is 618m-deep, and additional underground development to sustain production at 1,800tpd, as well as installation of a new 115kV power line.

Pan American said construction of the new mine shaft is progressing and commissioning is expected to occur towards the end of the third quarter of this year.

All surface work including headframe and hoist for the new shaft is functioning completely and shaft construction is also complete.

Mining and processing rates are expected to increase following completion of the mine shaft, increasing up to full processing rates of 1,800tpd of ore by the end of next year.

During 2018, annual production from La Colorada is expected to reach 7.7 million ounces of silver.