Financing

The Mining and Exploration News in Mexico: Highlights on the Fourth Week of September 2023

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By Jorge Cirett                                             

During the 39th week of the year (September 25th to October 1st, 2023), only 11 companies working in Mexico posted news releases (the weekly low record is nine, since 2015). One company reported exploration on one of its properties, while no news on mining were released. Five companies informed on the opening or closing of private placements, their assistance to investor conferences and/or the amendment of credit facilities.  One company presented drilling results from one of its properties and one other an updated mineral resource estimation on one of its mines. The government cancelled nine mining concessions to one company in Sonora. One company updated on results of its annual general meeting and one other informed on modifications to streaming amendments. ON MEXICO ISSUES, the federal government is playing all tricks available on its hat to get the Sonora Lithium deposit under its control, expropriating mining concessions without calling it an expropriation, of what they see as a project with a potential large income revenue and a stepping stone on resources sovereignty. Camimex regards the cancellation infeasible while pointing that exploration expenditure has fallen 40% in recent years. A Labor Panel has been installed under T-MEC to review the US claim against Grupo Mexico in one of its mining units. ON EXPLORATION, In Chihuahua, Kootenay Silver informed four drill holes have been completed at Columba. ON MINING, no relevant news. ON FINANCING, Aztec Minerals closed the final tranche of a private placement for C$639 K, GR Silver was granted an extension for its financing placement, Regency Silver completed the first tranche of an upsized private placement.  ON RESOURCES AND DEVELOPMENT, Heliostar Metals reported drilling results from Ana Paula, in Guerrero. Guanajuato Silver presented an updated resource estimate for San Ignacio, in Guanajuato. ON DEALS AND CORPORATE ISSUES, the Mexican government cancelled nine mining concessions to Ganfeng’s Lithium in Sonora, in an unscrupulous bid to get its hands on the only defined lithium resource in Mexico. Southern Silver provided an update on results from its AGM. Bear Creek Mining presented two press releases to inform on changes on the two streaming agreements on the Mercedes mine production in Sonora. ON SOCIAL RESPONSIBILITY, no relevant news.

ON MEXICO ISSUES

  • Camimex (Cámara Minera de México) regards the cancellation of Ganfenfg Lithium’s concessions in Sonora as not viable. Ganfeng was served in August with the cancellation notice by the government on grounds of lack of investment, which the company denies. The exploration expenditure in México has fallen close to 40% in the last seven years.
  • Ganfeng’s Lithium cancelation of claims in Sonora by the federal government will have to be dealt with in national courts, as Mexico and China do not count with a trade agreement.
  • Marath Bolaños, head of the Secretaría del Trabajo y Previsión Social (Labor Bureau) stated that the Labor Panel under the T-MEC has been formed, to review the controversy between the US government and Grupo Mexico’s San Martín mine in Zacatecas.
  • The president of Mexico indicated that its government is reviewing lithium mining concessions.

ON EXPLORATION

  • Kootenay Silver Inc. updated on drilling progress of their program at Columba, in Chihuahua. Four diamond holes have been completed of the expected 12-15 holes in the 3,000 m program. “Analyses are awaited, however visual confirmation of mineralization and veining typical of D-Vein has been reported by the logging geologists in the holes to date where modeling predicted. Veining and associated stockwork mineralization in drilled length in each hole was observed to measure approximately 5.0 m vein/ stockwork, 8.2 m vein and 23 m stockwork, 10 m vein and 26 m stockwork and 1.0 m vein, 3.0 m stockwork in holes CDH-23-136 through CDH-23-139 respectively”.

ON MINING

  • No Relevant News.

ON FINANCING

  • Aztec Minerals Corp. closed the second and final tranche of its non-brokered private placement for gross proceeds of CAD$639.1 K. Aggregate gross proceeds from both tranches are CAD$1.55 M. Alamos Gold Inc. participated in the financing with $140.6 K (Cervantes, Sonora).
  • Capstone Copper Corp. amended its existing revolving credit facility to increase the aggregate commitments from $600 M to $700 M “and extend the maturity from May 2026 to September 2027. The Amended Credit Facility will bear interest on a sliding scale of adjusted term SOFR plus a margin of 2.000% to 2.875%”. Capstone cash and cash equivalents position by the end of June 2023 was $520 M (Cozamin, Zacatecas).
  • GR Silver Mining Ltd. was granted an extension by the TSX Venture Exchange to complete its non-brokered private placement for gross proceeds of up to $1 M. A first tranche of $329 K in gross proceeds was closed on August 10, 2023 (Plomosas, Sinaloa).
  • Regency Silver Corp. completed the first tranche of a previously announced private placement, which has been upsized to C$1.75 M from C$1.5 M (Dios Padre, Sonora).
  • Vortex Metals Inc. will be participating in the 23rd Investment Conference organized by CM-Equity AG in Munich (Riqueza Marina, Oaxaca).

ON RESOURCES AND DEVELOPMENT

  • Heliostar Metals Ltd. reported drilling results from the Ana Paula project in Guerrero. These two infill holes are within the “High Grade Panel” at the deposit, and are the last that are to be included in the resource update planned for November 2023. Highlighted core length intercepts comprise 35.9 m @ 8.17 gpt Au (including (11.8 m @ 13.55 gpt Au); 83.6 m @ 8.57 gpt Au (including 63.0 m @ 10.41 gpt Au, which includes 12.0 m @ 18.36 gpt Au); 57.0 m @ 6.03 gpt Au (including 5.0 m @ 45.44 gpt Au); 14.6 m @ 32.98 gpt Au (or 18.60 gpt Au if assays cut to 100 gpt Au).
  • Guanajuato Silver Company Ltd. presented a new mineral resource estimate for its San Ignacio mine in Guanajuato. Measured and indicated resources comprise 790 K tonnes @ 123 gpt Ag, 2.10 gpt Au, containing 3.14 M Oz Ag, 53,000 Oz Au, and inferred resources of 2.17 M tonnes @ 127 gpt Ag, 2.27 gpt Au, containing 8.9 M Oz Ag, 158,000 Oz Au. “… an increase of 130% in the measured & indicated category and 283% in the inferred category.”

ON DEALS AND CORPORATE ISSUES

  • The Mexican government, through the Direccion General de Minas (DGM) cancelled nine mining concessions in Sonora to Ganfeng Lithium, including those where the largest (and so far, the only) lithium deposit in Mexico is located. The company was informed of the cancellation last August, with the government stating that the minimum investment required between 2017 and 2021 was not fulfilled and Ganfeng declaring its compliance above that limit. The company has already filed claims against the resolution at the Economy Secretariat (Secretaría de Economía). Note by editor. – This is one more issue between private capital and the Mexican government, with a president with a world vision from the 1970’s, where the State is to have a ruling fist on all economic activities, and the president a final saying on what is to be done or not.
  • Southern Silver Exploration Corp. provided a corporate update from the company’s annual meeting. During the meeting seven incumbent directors were elected and the chartered accountants reappointed. Lawrence Page, Robert Macdonald and Killian Ruby were reappointed as president, vice president exploration and chief financial officer respectively. (Cerro Las Minitas, Durango).
  • Bear Creek Mining Corp. made the final gold delivery pursuant to a gold pre-pay streaming agreement with Nomad Royalty Co. Ltd. which was assumed upon the acquisition of the Mercedes mine, in Sonora, in April 2022. As a result, over 300 additional ounces of gold produced at Mercedes per month will now be fully available for sale by the Company. A promissory with 1368445 B.C. Ltd. was amended to extend the maturity from the end of September 2023 to the end of November 2023.
  • Bear Creek Mining Corp. announced a restructuring of its current stream and debt obligations with Sandstorm Gold Ltd. to improve the Mercedes mine ability to produce free cash flow near term by reducing near-term Au and Ag stream delivery obligations and the refinancing and extensions of Bear Creek’s debt with Sandstorm. Sandstorm will refinance its US$22.5 M convertible debenture into a 5-year convertible promissory note at 7% per year and convertible into Bear Creek shares at C$0.73 per share. “Sandstorm has agreed to make up to US$8 million in additional credit” prior to the end of August 2024. Bear Creek has to complete an equity financing to raise at least CAD$9.5 M.

ON SOCIAL RESPONSIBILITY

  • No relevant news.

On the image below: Geologist Julio Carcamo on a silicified ridge in the Sonoran Desert. Picture by Jorge Cirett.

The Mining and Exploration News in Mexico: Highlights on the Third Week of September, 2023

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Galena-sphalerite-Ag sulfosalts in a quartz vein

By Miguel A Heredia

During the 38th week of the year (September 18th to September 24th, 2023), at least 18 press releases were announced by companies working in Mexico, and 4 news published by the media, with ten disclosing deals and corporate issues, three commenting on Mexican issues, three announcing financing issues, two reporting resources and development of their properties, two informing on exploration results, and two discussing social issues. ON MEXICO ISSUES, According to El Financiero, there has been a 69% increase in the number of suspended projects during the López Obrador administration. According to information from the US Geological Survey, there are 82 lithium deposits in 18 states of the Republic, which can represent 1.7 million tons. ON EXPLORATION, In Chihuahua, Southern Empire received permitting from the Mexico´s Ministry of Environment and Natural Resources (SEMARNAT) for 30 drill hole sites at its Centauro project.  In Zacatecas, Radius provided an update on drilling at its Tropico project.  ON MINING, no relevant news.  ON FINANCING, Equinox announced and completed a bought deal offering of convertible senior notes (Mina Los Filos, Guerrero). Excellon announced debenture restructuring to reduce the outstanding principal amount to CAD $7.5M (La Negra Mine, Queretaro). ON RESOURCES AND DEVELOPMENT, Golden Tag announced the commencement of a 7,000m drilling campaign at its La Parrilla Mine Complex in Durango. Tocvan provided an update on the acquisition of Pilar project in Sonora and outlined target areas for the next phase of drilling. Silver Valley provided a corporate update on its MexiCan lithium-potassium projects located in Zacatecas-San Luis Potosi. ON DEALS AND CORPORATE ISSUES, Luca Mining announced the appointment of its Director of Corporate Development (Tahuehueto project, Durango). Santacruz reported fatality at its Zimapan Mine, Hidalgo. GR Silver reported results from its annual general meeting of shareholders (Plomosas project, Sinaloa). Sierra Metals placed Cusi Mine in Chihuahua on care and maintenance and initiated sale process. Radius announced that it proposes to issue 500K common shares of the company to Bruce Smith (Tropico project, Zacatecas). Angel Wing announced the consolidation of its common shares (La Reyna project, Nayarit). Bear Creek announced results from its special meeting of shareholders (Mercedes Mine, Sonora). Colibri announced the retirement of its President and CEO, and its replacement (Evelyn project, Sonora). Orex announced a consolidation of its issued and outstanding common shares at a ratio of ten pre-consolidation shares to one post-consolidation share (Coneto project, Sonora). Pan American announced that it will host a conference call to discuss the company´s environmental, social, and governance efforts and development (La Colorada, Zacatecas). Silver Viper announced that it will present a live virtual corporate update hosted by Red Cloud Financial Services on September 28th, 2023 at 2:00 PM ET (La Virginia project, Sonora).  ON SOCIAL RESPONSIBILITY, MAG Silver published its second annual sustainability report (Juanicipio, Zacatecas).  Ternium completed the restoration of the Cerro Náhuatl Mine and Jala Station Closure Plan in Coquimatlán, Colima, which covers a period from 2012 to 2022 in which reforestation works and programs were implemented.

ON MEXICO ISSUE

  • According to El Financiero, the mining sector has experienced a series of obstacles set by the current administration. The number of suspended projects stood at 439 in 2018, while the current figure is 837, representing a 69% increase in the number of suspended projects during the López Obrador administration. Likewise, the Fraser Institute of Canada placed Mexico in 37th place out of 83 countries evaluated, a drop of three places compared to 2021 and 17 positions compared to 2010. The sector is worried that the USD $77.2M budget assigned to Mexican Geological Survey (SGM) for 2024 is 95.47% below the USD $1.7 B private companies invested just in exploration. “With this lack of budget for exploration, they are condemning the country and the mining sector, because mining will be halted for another six years. If the modifications to the Mining Law remain as they are, we will witness Mexico’s mining sector entering a clear decline,” said Alfredo Phillips, Vice President, Argonaut Gold, in an interview with El Financiero.  In an interview with Mexico Business News (MBN), Ramón Luna, Director General of Servicios y Proyectos Mineros de Mexico (SPM), acknowledged that SGM has talented geologists and manages the most comprehensive database in Mexico. However, the public body does not match the infrastructure of a private company. “(The reform) would either force the more than 100 exploration companies in the country to work with the SGM or make the latter the only operator. This is not feasible because it lacks the necessary infrastructure,” he added.  Similarly, Raúl García, President of College of Mining Engineers, Metallurgists and Geologists of Mexico (CIMMGM), said that we could see the first impacts of lacking exploration by 2025 and a drop in production within the next five years, if SGM does not maintain the current levels of exploration. According to data from the Secretariat of Economy (SE), in 1Q23, the total foreign direct Investment (FDI) in the mining sector amounted to USD $419M. In contrast, during the same period in 2013, this figure reached USD $2.036 B, reflecting a decline of 79.4%. During Enrique Peña Nieto’s initial five-year term, from 2012 to 2017, the country received mining FDI totaling USD $2.8 B and USD $1.9 B, respectively, representing a decrease of 32.1%. Meanwhile, during the first five years of López Obrador’s administration, covering the period from 2018 to 2023, FDI amounted to USD $1.9 B and USD $419M, marking a significant 78% decrease. However, it is important to note that data for 2023 is not fully available, which means that the percentages provided could vary.
  • According to information from the US Geological Survey, there are 82 lithium deposits in 18 states of the Republic, which can represent 1.7 million tons. A few days ago, Héctor Usla, Economist and Reporter of the El Financiero Newspaper, reported that the 2024 Expenditure Law project plans to allocate MXP $9.77M to Litio para México (LitioMx), the entity created in August 2022, for the exploration, exploitation, benefit and use of lithium found in national territory. This is an amount that allows the administrative operation of the decentralized organization, but that seems insufficient to reliably establish the total amount of probable lithium reserves and initiate exploration and production in the most promising deposits. (Note of the writer.- Are you serious?…Obviously, it would be vastly insufficient to have a budget like that reported above to carry out exploration, exploitation, etc.).

ON EXPLORATION

  • Southern Empire Resources Corp., received permitting from the Mexico´s Ministry of Environment and Natural Resources (SEMARNAT) for 30 drill hole sites at its Centauro project in Chihuahua. “The Centauro Gold Project exhibits significant potential to host “Carlin-style” and/or epithermal precious metal mineralization based on extensive brecciation, silicification and argillization of the Tertiary-age Ahuichila Formation conglomerate, a strongly coincident gold (“Au”), arsenic (“As”), antimony (“Sb”), mercury (“Hg”), thallium, silver, barium soil geochemical signature associated with a silicified mesa “cap” covering 2.5 km along the strike of the main zone, outcrops containing arsenopyrite, realgar, orpiment and stibnite, and low to non- anomalous base metal values”. 
  • Radius Gold Inc., provided an update on drilling at its Tropico project in Zacatecas. The initial hole TDD-001 plan for 300m to intersect the Tropico breccia pipe encountered difficult ground conditions and was abandoned at 56m. “The hole from 19m to 56m is intensely altered with clay, silicification, variable zones of hydrothermal breccias and repeated sets of banded silica veins with fine sulphides and stockwork veining. Banded veining had not previously been seen on the property”. “The drill rig has been stepped back from the target an additional 25m and a new hole drilled deeper under hole TDD-001, this time using large diameter PQ sized core and casing which is expected to alleviate the drilling difficulties”.

ON MINING

  • No relevant news.

ON FINANCING

  • Equinox Gold Corp., announced that it has entered into an agreement to buy, on a bought deal basis, 4.75% unsecured convertible senior notes due 2028 in an aggregate principal amount of $150M.  The company has granted the initial purchasers up to an additional $22.5M aggregate principal amount of notes. The notes will be issued at par value.  Later on, the company announced that it had closed its previously announced bought deal offering of $172.5M aggregate principal amount of 4.75% unsecured convertible senior notes due 2028, which includes exercise of the full amount of the option to purchase an additional $22.5M aggregate principal amount of notes Net proceeds will be used for repayment of debt and for general corporate purposes (Mina Los Filos, Guerrero).
  • Excellon Resources Inc., announced debenture restructuring to reduce the outstanding principal amount to CAD $7.5M representing a reduction of CAD $10.4M (58% reduction), and to amend the terms of the remaining debentures to, among other things, further extend the maturity date to August 31, 2026. In exchange for CAD $10.4M aggregate principal amount of the debentures, Excellon to pay CAD $3.5M in equity, 25% interest in Silver City Project, plus additional non-dilutive contingency and royalty payments (La Negra Mine, Queretaro).

ON RESOURCES AND DEVELOPMENT

  • Golden Tag Resources Ltd., announced the commencement of a 7,000m drilling campaign at its La Parrilla Mine Complex in Durango. The 7,000m phase 1 drilling program will  focus on infill and step-out drilling in proximity to underground mining infrastructure and existing development in three key areas: a) Rosarios and Cuerpo 340 Veins (3,000 m of drilling to test the east, west and central down-dip extensions; b) Quebradillas Underground (3,000 m of drilling to test the strike and down-dip extensions of three key zones including Cuerpo 460, Norte-Sur, and San Nicolas; and c) San Marcos (1,000 m of drilling to test the extension of San Marcos and Cuerpo 1100 at depth.
  • Tocvan Ventures Corp., provided an update on the acquisition of the Pilar project in Sonora and outlined target areas for the next phase of drilling. The company has exercised notice to Colibri Resources Corp., to purchase the remaining 49%. It also is completing a due diligence expected to finalize in coming weeks to acquire over 21 square-kilometers of land surrounding the Pilar, which contain recent placer activity, historic workings, and prospective geology, indicative that the area is highly prospective for gold and silver. “Tocvan plans to restart field operations at the close of the expansion acquisition to advance new target areas already identified quickly towards drill targeting. Drilling at Pilar and within the new expansion area is planned to total 2,000-meters before year end”.
  • Silver Valley Metals provided a corporate update on its MexiCan lithium-potassium projects located in Zacatecas-San Luis Potosi. Highlights of this project include that significant grades of lithium, potassium sulphate, and boron are located on surface in unconsolidated sediments; the brine potential has not been tested to date; deep basin large aquifer brine potential defined by regional geophysics surveys, remains to be tested; he inferred resource has been tested from surface to an average 5 metres depth; the company anticipates the sediment basin could range from 40m to greater than 100m deep, so the prospect of expanding the sediment resource at depth is substantial; and 12.3M tonnes of Potassium Sulphate and 243K tonnes of Lithium Carbonate Equivalent defined thus far. The company declared that discussions are active and advancing with LitioMX and near-term plans are in place to come together to potentially finalize a partnership agreement.

ON DEALS AND CORPORATE ISSUES

  • Luca Mining Corp., announced the appointment of its Director of Corporate Development. The company also granted incentive stock options to its employees and consultants to purchase an aggregate 225K share in the capital stock of the company (Tahuehueto project, Durango).
  • Santacruz Silver Mining Ltd., reported that an employee was fatality injured at its Zimapan Mine, Hidalgo. The fatality was the result of rockfall from a stope face.
  • GR Silver Mining Ltd., reported results from its annual general meeting of shareholders.  Incumbent director Laura Diaz chose not to stand for re-election and was not a nominee (Plomosas project, Sinaloa).
  • Sierra Metals Inc., placed Cusi Mine in Chihuahua on care and maintenance and initiated a process to sell the mine. Ernesto Balarezo Valdez, Sierra Metals’ CEO, stated that “Sierra Metals is transitioning to become a copper-focused mining company, and the planned divestiture of Cusi will allow us to focus on our two key mines, Yauricocha in Peru and Bolivar in Mexico, where we have significant potential to continue growing our copper production”.
  • Radius Gold Inc., announced that it proposes, subject to TSX Venture Exchange approval, to issue 500K common shares of the company to Bruce Smith. The common shares will be issued at a deemed price of $0.24 per share, for a total deemed value of $120K (good for you Bruce!) (Tropico project, Zacatecas).
  • Angel Wing Metals Inc., announced the consolidation of its common shares on the basis of one post- consolidation common share for every two pre-consolidation shares issued and outstanding as of the close of business on September 20, 2023. (La Reyna project, Nayarit).
  • Bear Creek Mining Corporation announced results from its special meeting of shareholders (Mercedes Mine, Sonora).
  • Colibri Resource Corporation announced the retirement of its President and CEO, and its replacement (Evelyn project, Sonora).
  • Orex Minerals Inc., announced a consolidation of its issued and outstanding common shares at a ratio of ten pre-consolidation shares to one post-consolidation share. The reasons for the consolidation are to increase the company’s flexibility and competitiveness in the marketplace and to attract new equity investment in the company  (Coneto project, Sonora).
  • Pan American Silver Corp., announced that it will host a conference call to discuss the company ´s environmental, social, and governance efforts, and development on October 19, 2023 at 11:00 am ET (8:00 am PT) (La Colorada, Zacatecas).
  • Silver Viper Minerals Corp., announced that it will present a live virtual corporate update hosted by Red Cloud Financial Services on September 28th, 2023 at 2:00 PM ET (La Virginia project, Sonora).

ON SOCIAL RESPONSIBILITY

  • MAG Silver Corp., published its second annual sustainability report. , which provides a comprehensive overview of the company’s environmental, social and governance (“ESG”) commitments, practices, and performance for the 2022 year. Highlights of the 2022 sustainability report include zero fatalities at the Juanicipio project, Zacatecas or at MAG´s exploration projects; a lost time injury frequency rate of 1.92; over 62,000 hours dedicated to safety training; zero significant environmental incidents at the Juanicipio and other projects; 66% of MAG Silver´s workforce is hired from local communities; over 13 community engagement initiatives across 4 different project streams at the Juanicipio project: health, education, capacity buildings, and microenterprise projects; 38% of Board directors are female, surpassing the 30% target established in MAG´s Diversity, Equity and Inclusion Policy; and Code of Conduct and Social Responsibility Policy refreshed and updated to specifically articulate the importance of engaging with Indigenous communities through meaningful dialogue, cooperation, and deepening of the shared-value approach to local development activities to promote sustainable and lasting economic and social benefits.
  • Ternium completed the restoration of the Cerro Náhuatl Mine and Jala Station Closure Plan in Coquimatlán, Colima, which covers a period from 2012 to 2022 in which reforestation works and programs were implemented. With this project, the forest area was increased by 88 hectares and the area was repopulated with 180 species of native fauna. It is a component of the company’s commitment to sustainability in the communities where it operates, according to a statement.

Content like what you have just read can be seen at https://gambusinoprospector.com/ and at LinkedIn’s Mexico Mineral Exploration Group.

On the picture above, galena, sphalerite, and silver sulfosalts in a quartz vein from an intermediate sulphidation epithermal vein system in Sonora, Mexico Photo by Miguel A Heredia.