The Santa Elena Mine is located in northern Mexico approximately 150 km northeast of Hermosillo in Sonora State. First Majestic Silver became the project operator in 2015 when they acquired the previous owner SilverCrest Mines Inc.
Santa Elena is classified as a low sulphidation epithermal system with mining and exploration focused on a single wide vein. The mine began as an open pit, heap leach operation and transitioned to an underground mine and mill in early 2014. First Majestic is currently mining from three stopes to maintain 1,750 tonnes per day of underground production.
Ore is processed into gold-silver doré bars through a Merrill-Crowe processing facility with capacity of 3,000 tpd and recoveries averaged 92.5% for gold and 85.5% for silver during 2016. Excess capacity at the mill is being used to reprocess ore from the heap leach pads. The Probable Mineral Reserves as of Dec. 31, 2016 were 4.5 Mt at 77 g/t silver and 1.21 g/t gold for contained ounces of 22.2 Mozs of silver equivalent and the Indicated Mineral Resource is 4.5Mt at 89 g/t silver and 1.44 g/t gold for 26.1 Mozs of silver equivalent (145 g/t Ag-Eq cut-off).
Sandstorm has a gold stream agreement to purchase 20% of the life of mine gold production from Santa Elena for a per ounce cash payment of US$450. Sandstorm made an upfront payment of US$12 million in cash and 3.5 million common shares to acquire the stream from SilverCrest Mines in May 2009. In February 2014, Sandstorm exercised its underground mine option by making a $10 million payment to SilverCrest, allowing the company to purchase 20% of the payable gold from underground.