Pan American Silver has commissioned new sulphide ore processing plant at the La Colorada mine in Mexico.

The La Colorada is an underground polymetallic silver mine located in the Sierra Madre mountain range in Zacatecas.

The commissioning is part of Pan American Silver’s expansion project at the La Colorada to increase the overall production rate to 1,800 tons per day (tpd) by the end of 2017.

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

The plant, which started processing sulphide ore, achieved production throughput rates of over 1,400tpd.  It has already treated more than 14,000t of sulphide ore.

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 forms our core areas of growth in Mexico, and should lead to lower-cost, higher-margin silver production for Pan American."

Pan American Silver expects the throughput rates at the mine to be slightly reduced until the mine shaft and additional underground developments are completed.

The expansion project also includes installation of a new 115kV power line.

Pan American is currently processing the new mine shaft, which is planned to be commissioned in third quarter of this year.In 2018, annual production from La Colorada is expected to reach about 7.7 million ounces of silver.