By Miguel A Heredia
During the twenty one week of the year (May 18th to May 24th, 2020), at least 36 press releases were announced by companies working in Mexico, with twelve commenting on Mexican issues, six disclosing deals and corporate issues, five discussing on social issues, four informing on exploration results, three communicating production and financial results, three announcing financing rounds, and three reporting on resources and developments. ON MEXICO ISSUES, Foreign Direct Investment (FDI) in the Mexican mining sector decreased last year according to government data. Mexico deemed mining an essential activity, allowing companies to resume production activities. The Undersecretary of Mining, Francisco Quiroga, agreed with the Union Labour leaders on the strategy to guarantee a safe return to the mining operations in the country. A protocol for reopening companies was defined and only the Mexican Institute of Social Security (IMSS) can approve it or rejected it. Mining companies with operations in Chihuahua signed a letter of commitment before the State Government and the Government of Mexico, to follow the instructions on health and safety at work during the phase of resumption of operations in the so-called “new normality”. Excellon Resources and the FRENTE Metallurgical Mining Union reached some agreements to continue operating the La Platosa mine in Durango. Industrias Peñoles announced the shutdown of its Francisco I Madero Zinc mine in Zacatecas due to difficult mining conditions and low metal prices. ON EXPLORATION, In Sonora, Tocvan and its partner Colibri announced exciting new targets on its Pilar project. In Chihuahua, Kootenay released drill results from the first six of ten holes completed to date at its Columba project. In Sinaloa, Vizsla restarted its exploration and drilling program at its Panuco project. ON MINING, Mag Silver reported Q1, 2020 financial results (Juanicipio project, Zacatecas). Mexus reported additional gold sales from production at its Santa Elena mine in Sonora. McEwen reported full year 2019 production results from its El Gallo mine in Sinaloa. ON FINANCING, Magna Gold announced a non-brokered private placement to raise gross proceeds of up to $7M (Mercedes project, Son). Discovery Metals announced that it intends to complete a non-brokered private placement for gross proceeds of up to CAD $25M (Cordero project, Chihuahua). Mithril announced that its rights issue for capital raising has closed with strong support for both shareholder entitlements and additional shortfall shares (Copalquin project, Durango). ON RESOURCES AND DEVELOPMENT, Endeavour reported drill results from fourteen holes collared at its Bolaños mine in Guanajuato, eight of which intersected high-grade mineralization in the Melladito Vein. Mag Silver provided an update on its Juanicipio project in Zacatecas. VanGold announced plans to conduct a 1,000 tonnes bulk sample from its Pinguino project in Guanajuato. ON DEALS AND CORPORATE ISSUES, Alamos Gold reported results of its annual general meeting of shareholders (Mulatos mine, Sonora). Argonaut shareholders and Alio securityholders approved merger to create North American diversified Intermediate gold producer (El Castillo mine, Durango). Equinox announced results of its annual general meeting of shareholders (Los Filos mine, Guerrero). Defiance extended its option agreement on its San Acacio project in Zacatecas to 2023. Silver Tiger (former Oceanus Resources) commenced trading under the symbol “SLVR” (El Tigre project, Sonora). Sierra Metals appointed its new CEO (Bolivar mine, Chihuahua). ON SOCIAL RESPONSIBILITY, The Grupo Mexico Foundation donated 5,000 molecular tests for COVID-19, and will be distributing 450,000 protection kits in Mexico City as well as in the states of Mexico, Jalisco and Nuevo Leon. Minera Gorrión, subsidiary of Almaden Minerals and in charge of developing the Ixtaca mine project, in the north of Puebla, donated 1,000 disinfecting gels and 2,000 masks to the Ixtacamaxtitlán Community Hospital, in charge of leading efforts against the epidemic in the region. Minera Media Luna (Torex Gold), will donate MXP $2M to launch a hospital in Iguala, Guerrero, which will exclusively treat patients with COVID-19. Consorcio Minero Peña Colorada S.A. de C.V. , donated MXP $500K to the Integral Development of the Family (DIF) of Colima State to allocate it to the Emergent Food Attention Program implemented by the government.
ON MEXICO ISSUES
- Foreign Direct Investment (FDI) in the Mexican mining sector, decreased last year, according to government data. Net FDI in 2019 was USD $592M, down from almost USD $ 650M in 2018, according to data published by the economy ministry. The 2019 figure is the lowest compared to previous years. Spending peaked at USD $ 5.44B in 2013. The industry leaders see a general decline in investment in 2020 due to the COVID-19 pandemic. Mining companies intend to restart operations in June 1, 2020, as part of a gradual reopening of the economy under which the sector has acquired essential status.
- Mexico, deemed mining an essential activity, allowing companies to resume production activities, six weeks after asking all non-essential business to temporarily close in response to the COVId-19 pandemic. Argonaut, Azure, Compañía Real del Monte, Premier, Newmont, Alamos Gold, Great panther, among others, are some of the mining companies which will be starting activities at its mine operations.
- The Undersecretary of Mining, Francisco Quiroga, agreed with the Union Labour leaders on the strategy to guarantee a safe return to the mining operations in the country, once the reactivation of this sector was allowed. The mining sector generates 370K direct jobs and 2.3M of indirect jobs throughout the country, which generates benefits for workers and employees. Mining represents an essential sector because it supplies raw materials to practically all industries. On the other hand, Francisco Quiroga has been very active working with mining companies to define, along with the Secretary of Health, Jorge Alcocer Varela, the protocols for a safe reopening in 249 mining municipalities.
- A protocol for reopening companies was defined by the authorities. Companies must have the authorization of the Mexican Institute of Social Security (IMSS) to restart activities, after remain closed due to the CIVID-19. According to the Technical Guidelines for Health Safety in the Workplace, published this Monday by the Ministry of the Economy (SE), the IMSS will have 72 hours to approve or reject the request.
- Mining companies with operations in Chihuahua, signed a letter of commitment before the State Government (Governor Javier Corral) and the Government of Mexico (Undersecretary of Mining Francisco Quiroga), to follow the instructions on health and safety at work during the phase of resumption of operations in the so-called “new normality”. Francisco Quiroga added that to close the circle of prevention, the mining industry will be trained in the management of the different equipment that will be put into operation to comply with the protocols set by the State Health Council.
- Excellon Resources Inc., and the FRENTE Metallurgical Mining Union, reached some agreements to continue operating the La Platosa mine in the Bermejillo community, located in the Mapimí municipality, Durango. It highlights a cut of around 20% in personnel and a technical strike for the next 60 days as the company develops the restructuring process. The official assured that the liquidations of the personnel who will be dismissed will be 100% and in accordance with the provisions of the law, in addition to reaching an agreement with the union so that, while the technical strike is carried out, only 50% of their salary will be paid to the rest of the workers who, due to the pandemic caused by the COVID-19, are in domiciliary protection.
- Industrias Peñoles S.A.B. de C.V., announced the shutdown of its Francisco I Madero Zinc mine in Zacatecas, due to difficult mining conditions and low metal prices. It stated that it has begun laying off unionized workers in the mine unit and also trying to reassign to others workers and contractors to other mine units. The Francisco I Madero mine started operations in 2001. Peñoles processed in 2019, over 2.3M tonnes to produce 93M Lb Zn and 19.9M Lb Pb.
- Tocvan Ventures Corp, and its partner Colibri Resources Corporation, announced new exciting targets generated by an IP survey on its Pilar project in Sonora. “According to the survey data, the Main Zone and the North Hill Zone may be connected and, if confirmed, would be renamed as a mineralization trend. Results also indicate the potential of the northeast-southwest structures connecting the 4-Trench Zone to the Main Zone, Tocvan said”. Geophysical results will be combined with additional surveys to better define drill targets for a phase 2 drilling campaign.
- Kootenay Silver Inc., released drill results from six of ten holes completed to date at its Columba project in Chihuahua, as part of its 2020 drilling program. Significant drill intersections were encountered in hole CDH-20-045 with 239 g/t Ag, 0.08% Pb, and 0.4% Zn over 4.3m, including 350 g/t Ag, 0.1% Pb, and 0.5% Zn over 2.5m, and including 456 g/t Ag, 0.2% Pb and 0.6% Zn over 1.5m in the F Vein, and 208 g/t Ag, 0.1% Pb, and 0.2% Zn over 3m, including 974 g/t Ag, 0.03% Pb, and 0.3% Zn over 0.5m in a footwall vein; hole CDH-20-046 with 264 g/t Ag, 0.06% Pb, and 0.1%Zn over 6.8m, including 553 g/t Ag, 0.1% Pb, and 0.2% Zn over 2.9m, including 911 g/t Ag, 0.2% Pb, and 0.2% Zn over 1.4m, including 1,585 g/t Ag, 0.3% Pb, and 0.3% Zn over 0.6m, and 689 g/t Ag, 0.2% Pb, and 0.3% Zn over 0.5m, and 219 g/t Ag, 0.04% Pb, and 0.1% Zn over 5m, all in the F Vein; hole CDH-20-047 with 166 g/t Ag, 0.2% Pb, and 0.5% Zn over 15.65m, including 351 g/t Ag, 0.4% Pb, and 1% Zn over 5.97m, including 400 g/t Ag, 0.45% Pb, and 1.2% Zn over 4.97m, including 782 g/t Ag, 1.1% Pb, 3.6% Zn over 1.05, including 305 g/t Ag, 0.1% Pb, and 0.3% Zn over 1.15m, including 219 g/t Ag, 0.4% Pb, and 0.7% Zn over 1.1m, including 432 g/t Ag, 0.5% Pb, and 1% Zn over 0.97m; and hole CDH-20-042 with 115 g/t Ag over 0.3m in a hangingwall of a quartz vein, and 86 g/t Ag 0.02% Pb, and 0.1% Zn over 13m, including 111 g/t Ag, 0.03% Pb, and 0.1% Zn over 5.9m, in the F Vein. These holes tested the F Vein structure along 400 meters of strike length with holes 42 to 45 focusing on gaps in the 2019 drill program, while holes 46 and 47 were step outs along strike.
- Vizsla Resources Corp., restarted its exploration and recommenced its 14,500m drilling programs at its Panuco project in Sinaloa. Vizsla has tested only five of the initially twenty targets and will continue with two drill rigs to ensure the remaining 10,861m of planned drilling is completed in the 2020 calendar year.
- Mag Silver Corp., reported Q1, 2020 financial results. It estimated the pre-operative initial capital now at USD $440M as of January, 2018. The company also reported a development expenditure of approximately USD $153.5M (company therefore estimates approximately $286,584 of remaining initial capital on a 100% basis as at March 31, 2020), and an existing cash and other working capital as at March 31, 2020 of USD $6.8M and USD $13.2M respectively (Juanicipio project, Zacatecas).
- Mexus Gold , reported addition gold sales from production at its Santa Elena mine in Sonora. It sold 47.5Oz Au on May 7th and was processing an additional 45 Oz Au the week of May 18th. Mexus announced that the sales of gold for the month of May are expected to exceed 120 Oz Au.
- McEwen Mining Inc., reported full year 2019 production results from its El Gallo mine in Sinaloa. It produced 2,700 Oz AuEq (GEO) from residual leaching of the heap leach pad. Beginning with Q42019, the company has ceased relying on, and disclosing, cash costs and AISC per GEO as key metrics for El Gallo mine. Residual leaching will continue for as long as incremental revenue exceeds incremental costs.
- Magna Gold Corp., announced a non-brokered private placement to raise gross proceeds of up to $7M. Net proceeds will be used for working capital purposes in connection with the company´s existing projects (Mercedes project, Sonora).
- Discovery Metals Corp., announced that it intends to close a non-brokered private placement for gross proceeds of up to CAD $25M. Net proceeds will be used primarily to continue the exploration programs at its Cordero and Coahuila projects in Chihuahua and Coahuila respectively.
- Mithril Resources Limited, announced that its rights issue for capital raising has closed with strong support for both shareholder entitlements and additional shortfall shares. The company was required to raise a minimum of $1.5M under the rights issue as a condition precedent of the transaction with Sun Minerals Pty Ltd. Fund raised will be used to advance exploration at its Copalquin project in Durango, following completion of the acquisition of Sun Minerals.
ON RESOURCES AND DEVELOPMENT
- Endeavour Silver Corp., reported drill results from fourteen holes collared at its Bolaños mine in Guanajuato, eight of which intersected high-grade mineralization over minable widths in the Melladito Vein. Significant drill intersections were encountered in hole BN27 with 24.3 g/t Au and 787 g/t Ag (3,217 g/t AgEq) over a true width (TW) of 1.5m, including 91.8 g/t Au and 2,200 g/t Ag (11,380 g/t AgEq) over a true width of 0.20m; hole BN31 with 12.48 g/t Au and 50 g/t Ag (1,298 g/t AgEq) over a TW of 1.1m, including 50.8 g/t Au and 191 g/t Ag (5,271 g/t AgEq) over a TW of 0.2m; and hole BN32 with 7.37 g/t Au and 170 g/t Ag (907 g/t AgEq) over a TW of 2.7m, including 9.47 g/t Au and 327 g/t Ag (1,274 g/t AgEq) over a TW of 0.6m.”The eight drill holes outline a new mineralized zone 100 m long by 200 m deep, open in all directions. It could connect with the historic high-grade San Ramon mine workings immediately west of and the San Pablo mine workings immediately east of the drill holes. This part of the Melladito vein was not previously explored and represents an exciting new area for resource estimation and mine development”.
- Mag Silver Corp., provided an update on its Juanicipio project in Zacatecas. Highlights include that a detailed engineering is near completion and earthmoving and foundation preparation is well advanced for the construction of the 4,000 tpd beneficiation plant; SAG and Ball mills, flotation cells, all associated vessels, thickeners and ancillary process equipment are now secured on site, progress made with the construction of the flotation plant and infrastructure, and underground development at Juanicipio has now approached 27 km (or 16.9 miles) and is focused on three sub-vertical ramps that descend alongside the mineralization and alongside the conveyor ramp to surface at plant site.
- VanGold Mining Corp., announced plans to conduct a 1,000 tonnes bulk sample from its Pinguino project in Guanajuato. It entered in an agreement with Endeavour Silver and will be sending the bulk sample to Endeavour’s Bolañitos mill, located approximately 28kmfrom El Pinguico project. “By conducting this large test, the Company will gain valuable metallurgical and precious metal recovery information pertaining to the mineralized material on the El Pinguico property.
ON DEALS AND CORPORATE ISSUES
- Alamos Gold Inc., announced results of its annual general meeting of shareholders. It also appointed and compensated executives and auditor´s remuneration (Mulatos mine, Sonora).
- Argonaut Gold Inc., shareholders and Alio Gold Inc. securityholders, approved merger to create North American diversified intermediate gold producer. On closing of the transaction, Argonaut and Alio shareholders will own approximately 76% and 24% of the merged company, respectively, on an issued share basis. The merged company will continue as Argonaut Gold with the ticker symbol AR on the Toronto Stock Exchange (TSX). (El Castillo mine, Durango).
- Equinox Gold Corp., announced results of its annual general meeting of shareholders. It also appointed auditors and approved executive´s compensation (Los Filos mine, Guerrero).
- Defiance Silver Corp., announced that it has successfully negotiated with the project vendor its option agreement on its san Acacio project in Zacatecas. The project vendor has agreed to extend the option agreement terms by three years from September 27, 2020 to September, 27, 2023. “Defiance will now be making quarterly payments, over three years, to the property vendor totaling USD $2,278,189, with the final option payment of USD $2,407,461 due September 27, 2023. In accordance with the original agreement, the vendor retains a 2.5% NSR which may be purchased for USD $2,500,000. Should the agreement be terminated prior to September 27, 2023 a break fee equal to 5% of the outstanding option balance shall be paid to the property vendor”.
- Silver Tiger Metals Inc., (former Oceanus Resources), commenced trading under the trading symbols “SLVR” on the TSXV. There was no change in the share capital of the company. Certificates representing common shares of the company will not be affected by the name and symbol change and will not need to be exchanged (El Tigre project, Sonora).
- Sierra Metals Inc., announced the appointment of its new CEO effective immediately (Bolivar mine, Chihuahua).
ON SOCIAL RESPONSIBILITY
- The Grupo Mexico Foundation, donated 5,000 molecular test for the detection of COVID-19 to be applied to patients from all over the state of Chihuahua. Governor of Chihuahua State, Javier Corral, stated that it will allow reducing the time of diagnosis and extending timely attention to the population. In addition, it also will donate 450,000 protection kits to be distributed in Mexico City as well as in the states of Mexico, Jalisco and Nuevo Leon. The kits are personal and contain supplies such as masks, gowns, hats, shoe covers, KN45 masks, gloves, goggles and everything necessary to promote the comprehensive protection of health personnel in hospitals.
- Minera Gorrión (MG), subsidiary of Almaden Minerals Ltd., and in charge of developing the Ixtaca mine project, in the north of Puebla, donated 1,000 disinfecting gels and 2,000 masks to the Ixtacamaxtitlán Community Hospital, in charge of leading efforts against the epidemic in the region. On the other hand, 1,440 liters of gel and 4,800 face masks were distributed among 15 Rural Medical Units of the IMSS and 9 Health Houses of the Ministry of Health in the municipality. Likewise, MG delivered 1,300 liters of gel and 2,000 covers mouths to the Central Warehouse of Health Services in the state of Puebla to support the efforts led by the Puebla government to counteract the spread of the disease in the state.
- Minera Media Luna (Torex Gold Resources Inc.), donated MXP $2M to launch a hospital in Iguala, Guerrero, which will exclusively treat patients with COVID-19. The hospital will be soon in operation and will also serve people from Taxco, Huitzuco, Tepecoacuilco and Cocula affected by the coronavirus.
- Consorcio Minero Peña Colorada S.A. de C.V., donated MXP $500K to the Integral Development of the Family (DIF) of Colima State, to allocate it to the Emergent Food Attention Program, implemented by its government.
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, phyllic alteration in a porphyry Cu system in a prospect in Oaxaca, Mexico. Photo by Miguel A Heredia.