By Jorge Cirett

During the 3^rd week of the year (January 16^th to January 22^nd, 2023), 20 companies working in Mexico released news on their properties. Two companies posted on exploration of non-advanced properties, six companies posted on Q4 2022 production figures, one released its 2023 production guidance and one announced the re-start of operations at a processing plant in Guanajuato. One company extended the maturity date of convertible debentures. Five companies informed on work at its advanced properties, including three that released drilling results and two that updated on mineral resources. One company restricted the NSR agreement on an advanced property, one informed on the acquisition of a past-producing mine and one other informed on the leasing of its processing plant for part of the profits. ON MEXICO ISSUES, no relevant news. ON EXPLORATION, In Sonora, Reyna Gold released sample results from its La Gloria project. In Jalisco, Almadex Minerals updated on exploration plans at San Pedro. ON MINING, Orla Mining, Avino Silver, Fortuna Silver, Gold Resource, Pan American Silver and First Majestic Silver presented production reports for Q4 2022. Torex Gold released its 2023 production guidance and Guanajuato Silver is to start processing at the Cata mill in Guanajuato. Capitan Mining released drill results from the Jesús María system at its Cruz de Piedra project in Durango.  ON FINANCING, Excellon Resources is to convert C$4.5 M of debentures into equity and extend the maturity of remaining principal. ON RESOURCES AND DEVELOPMENT, GR Silver released drilling results from the SE zone of the San Marcial project in Sinaloa. Regency Silver updated the resource estimate at Dios Padre in Sonora. GoGold Resources posted drilling results from El Favor deposit at its Los Ricos North project in Jalisco. Excellon Resources filed a PEA on La Negra deposit in Hidalgo. ON DEALS AND CORPORATE ISSUES, Defiance Silver restructured an option agreement to acquire the NSR at the Tepal project in Michoacan. Excellon Resources announced last week the acquisition agreement on the past-producing La Negra mine in Hidalgo. Xali Gold signed a lease for part of the profits obtained in the processing of minerals by a private company at its San Dieguito de Arriba mill in Nayarit. ON SOCIAL RESPONSIBILITY, First Majestic Silver received the “Silver Helmet Award” for underground mining with more than 500 workers for its health and safety performance.

ON MEXICO ISSUES

• No Relevant News.

ON EXPLORATION

• Reyna Gold Corp. released sample results from district-scale exploration at its 24,215 hectare La Goloria property in Sonora. At Las Carmelitas 43 samples average 2.25% Cu, 89 gpt Ag, 0.21 gpt Au and 0.48% Sb defining a supergene enrichment zone on conglomerate, agglomerate and sandstone with a 2.5 Km by 1.7 km footprint continuing undercover in several directions. At the Western target new parallel structures have been discovered on a 1,500 by 450 m zone with eight samples returning 2.89 to 11.35 gpt Au, up to 27 gpt Ag and 22 to 135 gpt Tellurium. At La Republicana the northwest-southeast trend has now been extended with discontinuous veins and veinlets for 2.8 km, and a width of 625 m with grades of up to 103.5 gpt Au, 283 gpt Ag, 2.4% Cu, 5.33% Pb, 0.12% Zn. “At least 3 hydrothermal events have occurred in the zone: 1) veins and veinlets of white quartz (occasionally greyish) with the presence of galena, chalcopyrite, and covellite, 2) veins and veinlets of quartz-tourmaline (cutting first event structures) coarse pyrite is observed, traces of chalcopyrite and secondary minerals such as hematite, jarosite, malachite and chrysocolla, 3) filling of calcite and iron carbonates within second event structures”. Drilling is programmed for March 2023.
• Almadex Minerals Ltd. updated on exploration plans for its San Pedro project in Jalisco. The breccias intercepted in 2022 drilling appear to have a sub horizontal distribution. “Further surface mapping is planned to confirm and refine this interpretation in order to optimise the next drilling program. The elevated base metals and copper seen in the breccia, along with acid sulphate altered fragments suggests that the breccia and related mineralisation may be a late feature in the lithocap environment”. It is interpreted that the acid sulphate lithocap present has potential for gold mineralization, and deep copper potential beneath.

ON MINING

• Orla Mining Ltd. provided an operational update for the fourth quarter 2022. The Camino Rojo Oxide mine produced 32,017 Oz Au during the period, and 109,596 Oz Au throughout the full year. All-in sustaining costs (AISC) has been maintained at $600 to $700 per Oz Au for the year. Production for 2023 is expected to be between 100,000 to 110,000 Oz Au. “Income taxes accrued during 2022, including Mexican Special Mining Duty, totalling approximately $35 million, will be paid in a lump sum in March 2023. Thereafter, Orla expects to pay income tax instalments monthly, beginning in May 2023”. Orla ended the year with a cash position of $96.6 M.
• Avino Silver & Gold Mines Ltd. reported fourth quarter 2022 production results at the Avino mine in Durango. During the period 150.3 K tonnes were milled at an average grade of 70 gpt Ag, 0.62 gpt Au, 0.53% Cu, recovering 92% Ag, 81% Au, 88% Cu to produce 309.8 K Oz Ag, 2,426 Oz Au, 1.54 M Lb Cu (770 .1 K Oz AgEq). For the year 541.8 K tonnes were milled @ 62 gpt Ag, 0.42 gpt Au, 0.61% Cu, recovering 92% Ag, 78% Au, 89% Cu, to produce 985.2 K Oz Ag, 5,778 Oz Au, 6.50 M Lb Cu (2.65 M Oz AgEq). The dry-stack tailing facility was commissioned and is now fully operational.
• Guanajuato Silver Company Ltd. announced that the Cata mill has commenced precious metals processing at the Valenciana Mines Complex (VMC) in Guanajuato. The company is to start processing material at a rate of 8 K tonnes per month and to increase it later in the year to 20 K tonnes per month. The mill has a nameplate capacity of 36 K tonnes per month. “The Company plans to operate the Cata mill with production from both VMC and the San Ignacio mine …… intends to backfill tailings underground using a hydraulic fill system that will make use of select voids and open stopes that have been created at VMC over the past 450 years of underground mining”.
• Torex Gold Resources Inc. provided operational guidance for 2023 and 5-year production outlook for the Morelos Complex in Guerrero, which comprises the El Limón Guajes (ELG) Complex and the Media Luna project. For 2023 at ELG the expected gold production is between 440 K and 470 K Oz Au at total cash costs $740 to $780 per OZ Au and all-in sustaining costs of $1,080 to $1,130. “The strip ratio for 2023 is expected to average 10.7:1 compared to 8.9:1 in 2022 given additional laybacks within the El Limón and El Limón Sur open pits. Based on the current mine plan, a higher portion of waste is expected to be mined in the second and third quarters compared with the first and fourth quarters”. Approximately $39 M are budgeted for exploration and drilling in 2023, including $20 M for Media Luna, $6 M for ELG underground, $8 M for exploration in near mine on early exploration targets and $5 M in definition and grade control drilling. For the next five years production is expected to be in the 400 K to 500 K Oz Au per year.
• Fortuna Silver Mines Inc. reported production results for the fourth quarter 2022, including figures from its Mexican operations. During the fourth quarter 259.5 K tonnes were milled at a rate of 2,883 tonnes per day (tpd), averaging 194 gpt Ag, 1.13 gpt Au, recovering 91.1% Ag, 89.8% Au to produce 1.47 M Oz Ag, 8,499 Oz Au. For the year, 1.03 M tonnes were milled at a rate of 2,925 tpd, averaging 191 got Ag, 1.14 gpt Au, to produce 5.76 M Oz Ag, 34,124 K Oz Au. For 2023 the company plans to process 1.03 M tonnes @ 186 gpt Ag, 1.19 gpt Au, reflecting the declining grade profile of mineral reserves.
• Gold Resource Corp. released fourth quarter 2022 production for the Arista mine in Oaxaca. During the period 97.8 K tonnes were milled at a rate of 1,353 tonnes per day, averaging 2.68 gpt Au, 91 gpt Ag, 0.37% Cu, 2.29% Pb, 4.79% Zn to produce 6,933 Oz Au, 265.8 K Oz Ag, 284 tonnes Cu, 1,808 tonnes Pb, 3,920 tonnes Zn.
• Pan American Silver Corp. announced preliminary production results for the Q4 2022, including figures from its Mexican operations. At La Colorada, in Zacatecas, 1.34 M Oz Ag, 700 Oz Au were produced during the period, for a yearly total of 5.93 M Oz Ag, 3,300 Oz Au. At Dolores, in Chihuahua, 0.59 M Oz Ag, 34,600 Oz Au were produced during the quarter, for a yearly production of 2.24 M Oz Ag, 136,900 Oz Au.

• First Majestic Silver Corp. released total production results for the fourth quarter of 2022. The company’s consolidated production from its three operating mines in Mexico (San Dimas in Durango, Santa Elena in Sonora, La Encantada in Coahuila) was 2.39 M Oz Ag, 46,194 Oz Au (or 6.17 M Oz AgEq). The liquid natural gas powerplant at Santa Elena was expanded from 12 MW to 24 MW “to supply low‐cost, clean power to the Ermitaño mine and the recently completed dual‐circuit plant”. In exploration, four drilling rigs are operating at Dan Dimas, in Durango, three at Santa Elena in Sonora and one at La Encantada, in Coahuila.

ON FINANCING

• Excellon Resources Inc. entered into a binding term sheet with holders representing approximately 66.67% of the principal “amount of outstanding convertible debentures to convert 25% of the debentures (C$4.5 M) into equity and reprice and extend maturity of remaining principal outstanding upon closing the acquisition of La Negra property in Queretaro, providing greater flexibility to the Company. Furthermore, reprice the conversion price of the remaining principal to C$0.535 per share, 6.5% interest rate or 10.0% payable in shares at the company’s election” (La Negra, Hidalgo).

ON RESOURCES AND DEVELOPMENT

• GR Silver Mining Ltd. released surface drilling results from six holes in the Southeast Area of the San Marcial project in Sinaloa. Highlighted core-length intervals comprise 5.6 m @ 1,223 gpt Ag, 1.4% Pb, 1.2% Zn (including 0.3 m @ 25,150 gpt Ag, 30% Pb, 18.6% Zn); 82.7 m @ 121 gpt Ag (including 0.4 m @ 3,386 gpt Ag and 1.1 m @ 1,391 gpt Ag); 112.6 m @ 61 gpt Ag (including 0.9 m @ 1,055 gpt Ag); 0.6 m @ 14.3 gpt Au. “The six holes represent extensions along strike or down dip, creating the potential to expand silver mineralization boundaries”.
• Capitan Mining Inc. released drill assays for five holes on the Jesus Maria zone at the Cruz de Piedra project in Durango. Highlighted core length intervals comprise 16.8 m @ 0.35 gpt Au, 187 gpt Ag, 0.1% Pb, 0.1% Zn (including 1.5 m @ 1.36 gpt Au, 1,381 gpt Ag, 0.8% Pb, 0.5% Zn); 4.6 m @ 0.63 gpt Au, 183 gpt Ag (including 1.5 m @ 1.45 gpt Au, 504 gpt Ag); 15.2 m @ 0.44 gpt Au, 21 gpt Ag, 0.5% Pb, 0.8% Zn (including 1.5 m @ 1.82 gpt Au, 81 gpt Ag, 3.2% Pb, 4.2% Zn). The Jesus Maria zone has been traced by trenching and drilling for 750 m of strike length to a depth of up to 150 m “On Dec 6 th, 2022, Capitan announced that it had entered into a transaction with a third party to consolidate the 2.5km high grade Jesus Maria trend”.
• Regency Silver Corp. announced an updated resource estimate for its Dios Padre project in Sonora. The updated resource estimate incorporates 1,056 m of drilling in 8 holes drilled in 2022 and 10,425 m of historic drilling in 66 holes, to define inferred resources of 1.384 M tonnes @ 228 gpt Ag, 0.32 gpt Au (255.6 gpt AgEq) containing 10.14 M Oz Ag, 14,000 Oz Au. “The resource estimate contains information from the historic Dios Padre silver mine only and does not include any information from the recent discovery hole REG 22-01 which contained an intercept of 35.8 metres of 6.84 g/t gold, 0.88% copper and 21.82 g/t silver”.
• GoGold Resources Inc. released the results of eight holes from El Favor East deposit within Los Ricos North project in Jalisco. Highlighted core length intervals comprise 84.5 m @ 0.24 gpt Au, 79 gpt Ag; 44.8 m @ 0.30 gpt Au, 111 gpt Ag (including 17.3 m @ 0.71 gpt Au, 225 gpt Ag); 7.8 m @ 0.45 gpt Au, 190 gpt Ag; 19.9 m @ 0.59 gpt Au, 392 gpt Ag (including 5.0 m @ 1.97 gpt Au, 1,300 gpt Ag, which includes 1.2 m @ 6.48 gpt Au, 3,722 gpt Ag); 18.3 m @ 0.21 gpt Au, 97.4 gpt Ag; 35.2 m @ 0.18 gpt Au, 130 gpt Ag. “El Favor is located approximately 800 meters along strike to the east of the El Orito deposit. The combined systems cover approximately 2.9km in mineralized strike length over a 3.7km distance”.
• Excellon Resources Inc. filed a preliminary economical assessment on La Negra project in Queretaro. The report summarizes the mineral resource estimate with 2.46 M tonnes @ 64 gpt Ag, 1.95% Zn, 0.50% Cu, 0.27% Pb, containing 5.1 M Oz Ag, 105.8 M Lb Zn, 27.1 M Lb Cu, 14.6 M Lb Pb in indicated resources and 6.42 M tonnes @ 80 gpt Ag, 1.80% Zn, 0.40% Cu, 0.65% Pb, containing 16.5 M Oz Ag, 254.8 M Lb Zn, 56.6 M Lb Cu, 92.0 M Lb Pb as inferred resources. The PEA envisages 7.4 years of mine life processing 6.22 M tonnes averaging 63 gpt Ag, 1.5% Zn, 0.4% Cu, 0.4% Pb at a daily rate of 2,500 tonnes.

ON DEALS AND CORPORATE ISSUES

• Defiance Silver Corp. restructured the option agreement to acquire the 2.5% NSR at the Tepal project in Michoacan with Minera Tepal S.A. de C.V. “The company is making a payment of US $100,000 to defer all payments until June 30, 2024, at which time the remaining payment schedule will resume”.
• Excellon Resources Inc. announced on January 9, 2023 a definitive acquisition agreement with Orion Resource Partners on the acquisition of the permitted, past-producing mine of La Negra, in Queretaro. The deal involves the payment on US$50 M paid through an upfront payment in shares of Excellon totaling US$20 M upon closing of the acquisition and a further US$30 M of deferred, “contingent consideration payable in common shares of the Company or in cash at the Company’s option, following the restart of commercial production”. La Negra property counts with 2.46 M tonnes @ 64 gpt Ag, 1.95% Zn, 0.50% Cu, 0.27% Pb, containing 5.1 M Oz Ag, 105.8 M Lb Zn, 27.1 M Lb Cu, 14.6 M Lb Pb in indicated resources and 6.42 M tonnes @ 80 gpt Ag, 1.80% Zn, 0.40% Cu, 0.65% Pb, containing 16.5 M Oz Ag, 254.8 M Lb Zn, 56.6 M Lb Cu, 92.0 M Lb Pb. The current PEA envisages 7.4 years of mine life processing 6.22 M tonnes averaging 63 gpt Ag, 1.5% Zn, 0.4% Cu, 0.4% at a daily rate of 2,500 tonnes.   
• Xali Gold Corp. signed a binding letter of intent with Minera Cinco Reales S.A. de C.V. on the San Dieguito de Arriba plant in Nayarit. Xali will have the right to receive 15% of the net profits from any mineral that is processed at the plant, or minimum payments of US$10 K in the fourth month from the signing, US$20 K on the fifth month, US$30 K on the sixth month, US$40 k on the seventh to tenth months, US$50 K from month eleven on. Before the fourth month, Xali should receive US$6.5 K on January 30^th, US$6.5 K on February 27^th, US$6.5 K on March 22^nd. “Upon the execution of this Agreement, MCR will act as the only operator of the plant and will have the exclusive option to obtain permits and refurbish the plant and equipment to operational status and to manage and operate the SDA plant for their benefit for an initial period of 14 months …… Minera Cinco Reales operates several mines and processing plants (150 to 300 tonnes per day) in Northern and Central Mexico producing gold, silver, copper, lead and zinc”.

ON SOCIAL RESPONSIBILITY

• First Majestic Silver was awarded the prestigious “Silver Helmet Award” in the category of “Underground Mining of More Than 500 Workers” by the Mining Chamber of Mexico for its outstanding performance in occupational safety and health on its Santa Elena operations in Sonora.

On the image below: Tectonic breccia in granitic rock sealed by fine grained darker intrusive on a copper project in the Sonoran Desert. Picture by Abraham López.