"We're pursuing the financing, but it's a tough market right now and nothing is certain," general manager Bill Pincus told Reuters in an interview."We'll start construction as soon as we get the money," Pincus added.

Poised to dominate Argentine silver production, Pirquitas is this year's main development on the local mining scene. Its construction was seen providing the lion's share in 1999 of foreign investment in the sector, where fresh infusions have recently been scarce.

But despite a continual increase in proven and probable reserves, low silver values are making it difficult for US owner Sunshine Mining and Refining Co to sniff out investors.

Silver is hovering around $4.90 per ounce, down from $7.28 per ounce in February 1998. Sunshine is crunching its production numbers,assuming a silver price of $5.50 per ounce.

"We know we have a good project but we have to be realistic with the tough financing environment," Pincus said. Sunshine, based in Idaho, is one of the world's leading silver producers. Its Chief mine in northern Idaho's Coeur D'Alene silver belt, which has yielded more than 350 million ounces of the metal this century, is billed to produce 5.5 million ounces in 1999.

Pirquitas, perched 4,200 meters above sea level on an arid high plateau in northwest Jujuy province, was bought by Sunshine more than three years ago after being worked for 50 years by a local firm.

The site's proven and probable reserves have spiralled skyward in step with exploration and now stand at 116 million troy ounces of contained silver, up from 101 million troy ounces at the top of the year.

Contained tin reserves have gone up to 70,800 tonnes from 53,000 tonnes, while contained zinc has climbed to 123,000 tonnes from 81,000 tonnes.

Estimates are based on average recoveries of 78per cent for silver, 63 per cent for tin and 41 per cent for zinc.

With the jump in reserves, planned daily throughput at the 10-year operation has been hiked by 1,000 tonnes to 6,000 tonnes with an eye on reducing operating costs and speeding cash flow. Annual production is estimated at nine million troy ounces of silver and 4,000 tonnes of tin.

Sunshine Argentina is looking to pay for the mine with a mixture of equity and debt financing. Pincus said there is a merger possibility for both Sunshine as a company or strictly on the Pirquitas project.