Canada’s Mandalay Resources Corp has started operations at its Cerro Bayo silver-gold mine in Chile.

The mine, acquired by Mandalay in August, is expected to produce 12,000oz of gold and 1.89 million ounces of silver in 2011.

Cerro Bayo is expected to achieve full production in the third quarter of 2011 with an annual saleable output of about 20,000–25,000oz of gold and up to three million ounces of silver.

Cerro Bayo mining operations had been suspended since October 2008 due to maintenance.