Premier Gold terminates 40% of workers at Mercedes mine in Mexico

Premier Gold Mines (TSX: PG) announced that it is fully restarting operations at its Mercedes gold/silver mine in Mexico, but with a new strategy that requires letting go of a significant number of employees.

In a press release, Premier said that after the mine was shut down for months due to the covid-19 pandemic, management developed a series of plans aimed at increasing production margins.

According to the miner, the new strategy entails consolidating production to one mine portal from five, reducing the mining rate to 1,200 tonnes per day from 2,000 tonnes and operating the processing plant on a campaign basis in alignment with the plan and crew rotations.

“This restructuring has resulted in a reduction of 40% of the employees required to operate the mine and 75% of mining-related contractors,” the media brief states. “The plan focuses on enhancing underground operating efficiencies and supervision in order to minimize dilution and improve ore quality. The success of future exploration and delineation drill programs will allow the production rate to increase toward nameplate capacity over time.”

Mercedes was placed into care and maintenance due to the covid-19 pandemic at the end of 2020’s first quarter and activities remained halted for most of the second quarter. The mine was gradually reopened but only certain activities, such as limited ore and waste development as well as delineation and exploration drilling, were allowed to limit the number of people on site.

Ore that was produced upon restarting the mine in June remained in stockpile until processing resumed in early July.

Premier said that the phased restarting of the mine will continue with the completion of key access ramps to the Diluvio West and Lupita Extension stoping areas and the delineation/definition drilling at the Marianas and Diluvio West, and San Martin delineation drilling.

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