Metals exploration and production company SilverCrest has reported that the final permanent connection of a 33 kV electrical powerline to its Las Chispas silver mine in Sonora, Mexico, has been completed.

"We are satisfied that the powerline is finally complete and fully energised to ensure adequate permanent electricity for Las Chispas.

“We look forward to concluding a milestone year, which has included the on time and on budget construction of Las Chispas, ramp-up of the mine and plant, declaration of commercial production, refinancing of debt and now the issuance of our inaugural Task Force for Climate Related Financial Disclosure (TCFD) and Water Stewardship reports," SilverCrest CEO N Eric Fier said on December 1.

SilverCrest president Chris Ritchie explained that the company chose to embrace the TCFD process early in the mine life so that the risks and opportunities that climate change posed to both the assets and the local communities in which the company operated could be better understood.

“This process enabled us to learn that water is the largest climate-related issue for us, which encouraged early development of a meaningful water stewardship strategy.  We are excited to work with our local farming and ranching communities to build long-term economic and social resilience," Ritchie said.

In May 2019, the SilverCrest board of directors established a safety, environmental and social sustainability (SESS) committee to oversee corporate performance regarding environmental, social and governance (ESG) and sustainability.

Since 2020, SilverCrest's ESG performance has been included in the corporate key performance indicators (KPIs) and directly relates to the compensation of the team.

The company has also established an ESG and climate management structure extending from its corporate headquarters in Vancouver, Canada, to the operational team in Mexico.

SilverCrest said that establishing this framework was a critical step to track, manage and disclose findings, as well as continuously look for ways to improve. 

POWERLINE

The Comision Federal de Electricidad (CFE) has now completed the refurbishment of a 27 km section of its infrastructure and connected it to the 54 km section owned by SilverCrest's subsidiary. As a result, Las Chispas now has full grid energisation at the design capacity of 7.6 MW, which is expected to be sufficient for the life-of-mine.

It is expected that the newly refurbished line will also improve the stability and reliability of the system. As a related benefit, the powerline replaces temporary diesel power generation with subsequent positive environmental impacts.

"We are also satisfied with the deployment of our contingency plan, which ultimately helped avoid material impacts to construction, commissioning or metal sales,” SilverCrest COO Pierre Beaudoin said.

TCFD REPORT

In terms of the TCFD, a third-party consultant was brought in to conduct physical and transition climate risk assessments to identify the key climate risks faced by SilverCrest and affected local communities.

The findings of the TCFD report, consultation with government agencies and third-party reports all identified that water was the key climate-related risk to the community, given the area's heavy reliance upon farming and ranching for livelihoods.

The climate risk assessment concluded that the three primary climate-related hazards were extreme heat, drought and flooding. Additionally, the climate models used highlighted water stress in the region and forecasted droughts to increase in severity and frequency.

As a result of the findings, SilverCrest and the SESS committee moved to develop a water stewardship strategy to address the identified vulnerabilities and opportunities. The Water Stewardship report provides standalone detailed disclosure on water issues faced by the community and shares the work, investments and progress that have been made relating to climate-related risks and water.

WATER STEWARDSHIP REPORT

In the Water Stewardship report, key operating metrics were established for the Las Chispas operation.

It was identified that the farming and ranching community relies heavily on ageing and deteriorating infrastructure that has become extremely vulnerable.

The inaugural water stewardship plan has been developed as a five-year plan during which SilverCrest has initially committed to invest a total of $1.5-million up to 2026.

Several key priorities were identified, which were to: ensure efficient transportation of water from the river to the aqueducts servicing the farmers and ranchers; upgrade the gravel aqueducts for efficient delivery so that farmers can connect water to their fields; fix the sewage system in the community; and work to register the community for water concessions so that they can become eligible for state and federal level funding for future projects.

SilverCrest's community-related efforts for this year included the refurbishment of the water intake valve, the upgrade of 1 km of aqueducts, the construction of 235 m of gabions to protect the aqueducts and 272 m of underground pipe for the water intake valve, the replacement of 800 m of the sewage system in the town of Arizpe, and the initiation of work to register the community for water-related permits.

From 2023 to 2026, SilverCrest plans to replace the sewage system in Arizpe, refurbish the aqueducts and work with the local and state level governments to identify and address projects that will benefit the community.

Next year will be the first full year of production for SilverCrest and it will serve as the company's baseline year in terms of tracking and disclosing ESG-related performance. The governance system created is intended to efficiently help monitor and disclose this key data so that the company can improve.