By Jorge Cirett
During the 49th week of the year (December 5th to December 11th, 2022), 15 companies working in Mexico released news on their properties. Two companies posted exploration updates on their properties, two more companies informed on private placements, while one signed a concentrate pre-payment facility and two companies updated on work at its advanced properties. On a busy week for deals, four companies announced agreements on the purchase of five properties. ON MEXICO ISSUES, a tit for tat of declarations between the Secretaría de Economía and Camimex reflected the state of affairs between the government and the mining industry for the last four years. ON EXPLORATION, in Sonora, Colibri Resource recommenced drilling at Evelyn. In Jalisco, Almadex Minerals released drilling results at San Pedro. ON MINING, no relevant news. ON FINANCING, Prismo Metals and Silver Viper informed on their private placements for $3 M and $335 K respectively. Guanajuato Silver Company informed on a new $5 M concentrate pre-payment facility. ON RESOURCES AND DEVELOPMENT, Torex Gold released drilling results from El Limón Sur Deep drilling, including the highest grade-m interval for Mexico so far in the year. Endeavour Silver released a new resource estimate for its La Pitarrilla project in Durango. ON DEALS AND CORPORATE ISSUES, Argonaut Gold and Heliostar Metals signed agreements for the purchase of the Ana Paula and San Antonio projects, in Guerrero and Baja California Sur respectively. Prime Meridian Resources optioned the Chuin project in Sonora from private vendors. Capitan Mining optioned from Fresnillo PLC a mining concession adjacent and in projection of mineralization at its Cruz de Piedra project in Durango. Golden Tag Resources is to acquire First Majestic Silver’s La Parrilla project in Durango. ON SOCIAL RESPONSIBILITY, one company informed on the receipt of an award in environmental and sustainability compliance.
ON MEXICO ISSUES
- According to IMSS (Instituto Mexicano del Seguro Social) there are 421,833 mining industry direct employees in Mexico, same that in 2021 generated 2.5% of the GDP, or 34,782 million pesos (US$16.5 billion dollars). The country is within the ten top producers of fluorite, sodium sulfate, wollastonite, celestite, lead, molybdenum, barite, diatomite, magnesium sulfate, zinc, salt, gypsum, cadmium, gold, feldspar and copper, and the top silver producer during the last 13 years. Workers in the industry earn an average of 23,366 pesos per month.
- Camimex (Cámara Minera de México) expects Mexico’s investment in mining to surpass US$5 billion (5,000 million pesos). Jaime Gutiérrez, president, pointed that it occurs under the contrast of high metal prices and national policy regulatory hurdles. Karen Flores, director, expressed that the risk in mining is major in exploration, diminishing as the project advances to the mining stage. Another obstacle is the discretionary granting of permits, highlighting the need of a clear and objective decision-making process. Stressed also was the need to have public policies that favor the investments in clean energies, as these are crucial for the competitiveness of the country.
- Raquel Buenrostro, head of the Economy Secretariat (Secretaría de Economía or SE) indulged herself in a barrage of accusations to the mining industry, pointing that it pays nearly zero taxes in proportion to its earnings, and is one of the industries with more corruption related to the Secretaría de Economía. She indicated that this is one of the reasons why the government has not granted mining concessions for the last four years, further adding that mining companies are no innocent entities, having problems the World around. “After hydrocarbons, the strongest smuggling is that of mining” she stressed, “more than textiles, shoes and clothing”. According to her numbers, mining companies pay 0.002% of its total earnings, compared to 2.4% of major contributors or between 30 and 35% for employees. She also commented on the case of a foreign company that using a twisted argument decided not pay taxes for ten years, while the case if reviewed by the Supreme Court. “Concessions, concessions and concessions were granted, some without complying with the law, some granted more than once, and those who have concessions do not comply with the obligations that should be covered…. the problem of corruption is strong, and I believe that this is one of the areas with biggest corruption problems in the Secretaría de Economía (Note of editor. The points of view of Raquel Buenrostro mimic those of the president, Andrés Manuel López Obrador, which is strongly critical of all private industries, including mining. More than a decade ago, while bidding for the presidency, he had expressed that no mining concessions were to be issued under his term. He’s true to his word, at least in this respect).
- Camimex (Cámara Minera de México) replied to Raquel Buenrostro, Secretary of Economy (See above) that the companies affiliated to the entity comply in time with its fiscal obligations, including special taxes that only miners pay. The mining industry conveys more resources for the federal coffers than other productive sectors, according to information from the Secretaría de Hacienda y Credito Público. Camimex argues that its enterprises generate more than 400 K direct jobs, and 2.6 M indirect jobs, with an average salary that is 37% higher than the national one. Also, studies by UNAM (Universidad Autónoma de México) show that the municipalities and localities with mining activity have greater levels of economic and human development than the national average. The letter ended “We miners are proud of our activities, the responsible and committed companies in Camimex will continue contributing to the economic development and social wellbeing in the country. We reiterate our commitment and absolute will and interest to establish the dialogue and collaboration with the authorities that are conducive to the strengthening of the sector and the country”.
- Colibri Resource Corp. re-commenced phase-2 reverse circulation drilling at the Evelyn property in Sonora. Five holes are planned with 2,000 m of drilling to test induced polarization targets from the 2021 geophysical survey, a second objective is to explore under extensive alluvial cover drilling a number of short holes and sample the top of the bedrock. A soil sampling program has been recently completed, and samples sent for “Gas Soil Hydrocarbon” testing.
- Almadex Minerals Ltd. released drilling results from its first hole at the San Pedro project in Jalisco. The highlighted core length interval is 4.51 m @ 657 gpt Ag, 0.03 gpt Au (including 2.0 m @ 1,090 gpt Ag, 0.07 gpt Au). Almadex describes a breccia with silicified fragments in sericitic alteration, with galena and sphalerite occurring in the matrix and in fragments. These characteristics point to an intermediate sulfidation epithermal system, although other options have not been ruled out at this stage. “The San Pedro project covers a large area of acid sulphate alteration, including zones previous described as vuggy silica. Recent Terraspec analysis indicates sericitisation superposed on propylitic alteration in the mineralised zones with acid sulphate alteration occurring at the north”.
- No Relevant News.
- Prismo Metals Inc. announced that the private placement for up to $3 M has been fully allocated. (Palos Verdes, Sinaloa).
- Guanajuato Silver Company Ltd. signed a new concentrate and pre-payment facility with Ocean Partners Ltd., to provide a US$5 M revolving credit facility for operating and working capital purposes. GSilver also completed its previously announced shares-for-debt transaction to settle C$1.13 M (El Cubo, Guanajuato).
- Silver Viper Minerals Corp. closed the first tranche of its $2 M private placement announced in November, for aggregate gross proceeds of $334.6 K (La Virginia, Sonora).
ON RESOURCES AND DEVELOPMENT
- Torex Gold Resources Inc. reported assays results from step-out and infill drilling at El Limón Sur, targeting underground mineralization as well as open pit mill feed at its El Limón Guajes mine complex in Guerrero. Highlighted core length results comprise 15.96 m @ 87.60 gpt Au, 15 gpt Ag; 0.15% Cu (including 4.46 m @ 163.51 gpt Au, 21 gpt Ag and 3.82 m @ 166.94 gpt Au, 23 gpt Ag, 0.20% Cu); 22.81 m @ 25.31 gpt Au, 122 gpt Ag, 3.45% Cu (including 3.00 m @107.63 gpt Au, 259 gpt Ag, 6.18% Cu); 20.52 m @ 9.49 gpt Au, 63 gpt Ag, 0.21% Cu; 18.72 m @8.10 gpt Au, 24 gpt Ag, 0.95% Cu; 9.90 m @ 15.19 gpt Au, 43 gpt Ag, 0.56% Cu; 17.85 m @ 13.39 gpt Au (including 2.25 m @ 90.05 gpt Au); 7.70 m @ 22.99 gpt Au, 8 gpt Ag, 0.18% Cu; 3.99 m @ 43.24 gpt Au, 25 gpt Ag. These strong results add the El Limón Sur Deep to the previously identified potential mining front at Sub-Sill South. “The style of mineralization at El Limón Sur Deep is like Sub-Sill and ELD, and is characterized by gold, with locally high silver and copper grades. Gold occurs in variably sulfidized, pyrrhotite-rich skarn, while silver and copper mineralization is controlled primarily by the degree of sulfidation of the host skarn. Mineralization is mainly associated with retrograde alteration characterized by the occurrence of phlogopite, amphibole, chlorite, calcite and lesser amounts of quartz and epidote, and local magnetite”.
- Endeavour Silver Corp. filed a NI-43-101 technical report with a resource estimate for the recently acquired (July 2022) La Pitarrilla project in Durango. Total indicated resources, open pit and underground, oxide and sulfide, stand at 158.6 M tonnes @ 96.4 gpt Ag, 0.31% Pb, 0.74% Zn, containing 491.6 M Oz Ag, 1.1 billion Lb Pb, 2.6 billion Lb Zn or 693.9 M Oz AgEq. Inferred resources, open pit and underground, oxide and sulfide, comprise 35.4 M tonnes @ 87.2 gpt Ag, 0.36% Pb, 0.85% Zn, containing 99.4 M Oz Ag, 281 M Lb Pb, 662 M Lb Zn or 151.2 M Oz AgEq.
ON DEALS AND CORPORATE ISSUES
- Argonaut Gold Inc. entered into a binding purchase agreement with Heliostar Metals Ltd. for the sale of the Ana Paula project in Guerrero. The deal involves a cash payment of US$10 M at closing, US$5 M in Heliostar shares when either an extension to the current mining permit or a new underground mining permit is granted, US$2 M on the completion of a feasibility study (FS), US$3 M in cash and US$2 M in shares on construction announcement and US$5 M in cash and US$3 M in Heliostar shares on announcement of commercial production.
- Argonaut Gold Inc. entered into an option agreement with Heliostar Metals Ltd. for the sale of the San Antonio project in Baja California Sur. Heliostar is to pay Argonaut US$80 M if the gold price is below $1,800 per ounce for the six months preceding the exercise of the option, US$120 M if the price is in the US$1,800 to US$2,000 per ounce range in the same period, or US$150 M if the gold price is above US$2,000 per ounce in the said period. A 2.0% NSR is to be paid to Argonaut if the option is exercised. The term of the option is for three years, that can be extended for 18 months if Heliostar is able to acquire an environmental permit from SEMARNAT, the environmental regulator (Note of editor. – which is unlikely to occur on this presidential term, ending in 2024).
- Prime Meridian Resources Corp. executed two letters of intent for the option to purchase up to 100% interest in the 3,792-hectare El Chuin copper project in Sonora. The project encompasses an interpreted porphyry copper target, with small scale mine workings developed in veins, disseminations and replacement style mineralization. The main target areas are Samaniego, La Gloria and Nogales. The option envisages the payment of US$30 K on year one, US$50 K and 250 K shares on year two, US$50 K and 500 K shares on year three, US$50 K and 1 M shares on year four and US$50 K and 1.5 M shares on year five, for a total of US230 K and 3.25 M shares, plus US$2.22 M of investment on the property. The current property owner retains a 1% NSR that can be bought for US$1.5 M. A second purchase option requires the payment prior to the 5th year anniversary of US$250 K for the La Gloria concession, US$250 K for La Gloria II concession and US$1 M for the Nino Luis concessions. “The El Chuin concessions are currently not in good standing and PMR will be obliged to bring the concessions to good standing. No payments to the vendors will be made prior to obtaining good standing for the concessions”.
- Capitan Mining Inc. executed an option agreement with Fresnillo PLC to acquire 100% interest in mineral rights to a key property at the Cruz de Plata project in Durango. The high-grade silver trend owned by Capitan is now 2.5 km in length, including extensions and targets on the Jesus Maria, San Rafael, El Tubo, El Refugio and Teresa veins. The optioned land holds 2,000 m of historic drilling in five holes with highlighted core length intervals of 1.0 m @ 233 gpt Ag, 0.1%Pb; 5.2 m @ 185 gpt Ag, 0.29 gpt Au, 0.90% Pb, 1.7% Zn; 29.0 m @ 55 gpt Ag, 0.14 gpt Au, 0.2% Pb, 0.6% Zn (including 1.3 m @ 284 gpt Ag, 0.43 gpt Au, 1.6% Pb, 5.5% Zn); 6.3 m @ 94 gpt Ag, 0.2% Pb, 0.4% Zn; 4.7 m @ 54 gpt Ag, 0.7% Pb, 1.2% Zn; 1.2 m @ 157 gpt Ag, 0.12 gpt Au, 1.1% Pb, 3.3% Zn. The deal involves a 3-year exploration agreement for the “Casco U” mining concessions, for a total of US$1.0 M over the period and 1% NSR which can be bought for US$1 M.
- Golden Tag Resources Ltd. entered into a definitive agreement with First Majestic Silver Corp. to acquire 100% interest on La Parrilla project in Durango. The property covers 69,478 hectares, with five underground mines, an open pit and a processing plant comprising parallel 1,000 tpd flotation and 1,000 tpd cyanidation leach circuits where oxide and sulfide ores can be processed. There are 9.5 M Oz AgEq in measured and indicated historical resources and 12.5 M Oz AgEq in inferred resources. In consideration for the purchase Golden Tag will issue First Majestic US$20 M in Golden Tag shares, and US$2.7 M in the first 18 months, US$5.75 M (cash or shares) when either 5 M Oz AgEq of reserves or 22 M Oz AgEq of measured and indicated resources are declared. And US$5.05 M (cash or shares) when a new zone with a NI-43-101 report holding more than 12.5 M Oz AgEq is announced. After closing First Majestic will have the right to maintain its pro-rata interest in Golden Tag, up to 19.9% of shares.
ON SOCIAL RESPONSIBILITY
- Hecla Mining Co. received the 2022 Environmental and Sustainability Excellence Award for its San Sebatian mine in Durango. The award by the American Exploration & Mining Association (AEMA) is in recognition by the company’s strong commitment to the highest environmental and sustainability standards.
On the image below puzzling boudin like siliceous bands in limestone on a project in the Sonoran Desert. Picture by Jorge Cirett.