(Corrects headline and 1st paragraph to show costs increased by 50 percent, not doubled) (In US dollars unless noted)
TORONTO, Nov 26 (Reuters) - Canadian miner Silver Standard Resources Inc SSO.TOSSRI.O said on Monday its massive Pirquitas project in Argentina will cost 50 percent more to build, but will also produce more, than previously estimated.
The capital cost for Pirquitas in northwestern Argentina is now estimated at $220 million, plus individual voluntary arrangement, up from last year’s estimate of $146 million, plus IVA.
“A significant portion of the increase in capital cost is a result of increased costs in global construction materials and inflation pressures in Argentina, particularly labor,” Silver Standard said in a statement.
Meanwhile, proven and probable silver reserves at the mine were raised 27 percent from the previous estimate to 136 million ounces, the company said.
Tin reserves were up 29 percent at 113 million pounds, while zinc was hiked 63 percent to 414 million pounds.
Silver Standard said it had C$57 million in asset-backed commercial paper which it had written down to C$53.4 million as of Sept. 30.
Silver Standard, based in Vancouver, British Columbia, said it had begun to sell its Shafter Project in Texas, which according to its Web site could initially produce 3.2 million ounces of silver a year.
Pirquitas was the biggest silver mine started in Argentina last year. It is estimated to last 10 years and to produce, on average, 10.9 million ounces of silver a year.
The company said $40 million of the project’s capital costs have already been paid, and there were firm commitments on $60 million. Payment of the rest includes a $15-million contingency. ($1=$0.99 Canadian) (Reporting by Jonathan Spicer; Editing by Bernadette Baum)
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