By Jorge Cirett
During the 10th week of the year (March 2nd to March 8th, 2020), at least 25 press releases were announced by companies working in Mexico. ON MEXICO ISSUES, several companies are interested exploring for lithium in Zacatecas-San Luis Potosí. Grupo Mexico plans to invest 78% more in 2020. Several mining companies are to invest more than $200 M in exploration in Mexico. The year 2019 was not good for the mining industry in the country, with an overall decrease in production. Durango’s governor announced mining investments for $100 M. The Peñasquito mine is expected to produce 1.6 M Oz AuEq per year for the next five years. The Industria Nacional de Autopartes (INA) is promoting the installation of a lithium battery plant. The Future of the Mexican Mining Industry seminar was held during the PDAC convention in Toronto, Canada. Peñoles is to switch to LP gas its diesel truck fleet at one of its mines in Sonora (Milpillas?). ON EXPLORATION, in Durango, Chesapeake Gold optioned the Duraznito project, near the San Dimas mine. In Veracruz, Azucar Minerals released more drill results from its El Cobre project. ON MINING, US Antimony reported the successful startup of the Los Juarez production facilities in Queretaro and Guanajuato. Mexus Gold announced small scale heap leach gold production at its Santa Elena mine in Sonora. Bacanora Lithium presented financial results for the last six months of 2019. Gold Resource presented production figures for 2019. Fresnillo PLC and Premier Gold Mines released financial results for 2019. ON FINANCING, One World Lithium announced the amendment of the terms on a number of purchase warrants previously issued by the company. Consolidated Zinc entered into unsecured loan facilities with CZL major shareholders. Premier Gold closed its public offering, for gross proceeds of $38 M. ON RESOURCES AND DEVELOPMENT, Mag Silver released results from last year’s 28-hole program with over 33,000 m of drilling, including some exciting intercepts. Gold Resource Corp. updated annual reserve estimates for the Oaxaca Mining Unit. Aura Minerals provided mineral reserve and resource estimates to the end of 2019 for the Aranzazu mine in Zacatecas. SilverCrest released metallurgical test results for its Las Chispas project in Sonora. ON DEALS AND CORPORATE ISSUES, Mithril Resources is acquiring the company that controls the Copalquin project in Durango. Oroco Resource closed the acquisition of Altamura Copper, furthering its interest on the Santo Tomás project in Sinaloa. Magna Gold is acquiring Alio Gold’s San Francisco mine in Sonora. Sable Resources appointed Ruben Padilla as CEO. Equinox Gold and Leagold Mining received approval for its merger. GR Silver Mining and First Majestic signed a binding agreement on the sale to GR of the Plomosas property in Sinaloa. Prime mining signed a long-term surface agreement on its Guadalupe de Los Reyes project in Sinaloa. Cheaspeake gold optioned the El Duraznito project in Durango. Fortuna Silver is involved in legal proceeding regarding a royalty on one of its mining concessions. ON SOCIAL RESPONSIBILITY. Peñasquito received two awards by Infonavit for its excellent compliance on payments.
ON MEXICO ISSUES
- Claudia Pavlovich, Sonora’s governor, praised the work women realize in the State, while on a trip visiting mining communities, like Turicachi, Nacozari de García and Cumpas, where she realized various activities.
- Gustavo Puentes, Secretary of Economic Development, announced several companies are interested in investing in lithium exploration in the border between San Luis Potosi and Zacatecas.
- Camimex (Cámara Minera de México) supports women collaborators that unite on the movement #UnDíaSinNosotras (One day without us) that is trying to eradicate genre violence.
- The inauguration of Mexican Stand on the Prospectors and Developers of Canada Convention (PDAC) in Toronto counted with the participation of Graeme Clark, Canada’s ambassador in Mexico, Juan José Gómez Camacho, Mexico’s ambassador in Canada, Francisco Quiroga, subsecretary of Mining, José rosas Aispuro, Durngo’s governor and Salvador García, president of the Asociación de Ingenieros de Minas, Metalurgistas y Geólogos de México (AIMMGM). The Mexico stand was possible due to the support of the AIMMGM, Peñoles, Minera Media Luna, Newmont, Alamos Gold, Endeaavour Silver, Asociación de Mineros de Sonora, Construplan, Detector Exploraciones, SSR Mining Pitarrilla, Santacruz Silver Mining, Starcore, International Mines, MacClean, Diesel Cargo, Accendo Banco, ROD General Contractor and Ecodrill, as the Mexican government no longer supports international promotion.
- Grupo Mexico plans to invest 78% more in 2020. On mining the budget is US$1,217 M to produce 1.12 M tonnes Cu, further US$367 M to invest in transport and US$412 M in the infrastructure division.
- Mining industry companies are to invest more than US$200 M in exploration in Mexico during 2020. Torex Gold plans to invest US$13 M in the Media Luna project; Fresnillo will invest over US$135 M in exploration in Chile, Peru and Mexico; First Majestic Silver will invest US$28 M in San Dimas, Durango and Santa Elena, Sonora; Pan American Silver is to invest more than US$37 M at Dolores in Chihuahua and La Colorada in Zacatecas.
- Mining did not have a good year in Mexico in 2019. Mining is ongoing in 25 States, produces 8.1% of the industrial GNP and had a 5.1% contraction as result of the policies of the actual Federal Government. Since December of 2018 no new mineral concession titles have been granted, and the environmental regulator, SEMARNAT has delivered just one Environmental Impact Report (Manifestación de Impacto Ambiental, or MIA). In Puebla, a local court maintains a suspension of work on El Gorrión mine (Ixtaca) based on a legal complaint by a communal group (ejido) on a mineral concession the company no longer has. The Cosalá mine in Sinaloa is paralyzed by a conflict between unions masterminded by Morena’s senator Napoleon Gómez Urrutia, reminiscent of the conflict suffered by Torex Gold a few months ago under the same terms. The projected investments for US$5,343 M were not achieved, with the projected real figure likely to be around 60%, and exploration at 36% of the expected. Coming interactions of the industry with the Environmental regulator the sub secretary of mining, Francisco Quiroga and Alfonso Romo are to try to better the condition of the industry.
- The governor of Durango, José Rosas Aispuro announced at the PDAC convention in Toronto, the investment of US$100 M in the mining sector during 2020 in the State.
- The Peñasquito mine in Zacatecas is the biggest gold mine in Mexico, the second largest for silver and one of the biggest producers of zinc and lead. The mine is expected to produce 1.6 M Oz AuEq per year during the next five years. The company is striving to reduce costs and optimize the operation.
- The Industria Nacional de Autopartes (INA) promotes the installation of a battery plant based on lithium, to take advantage of the natural resources and the industrial prowess of the country. Bacanora Lithium plans to invest US$420 M on the installation of a processing plant in Bacadehuachi, Sonora, in order to produce 17 K tonnes a year. About 85% of the lithium producers are in Asia, and USA produces 20% of the batteries. The nearness to the USA and sea ports are other advantages for project owned by Bacanora Lithium.
- During December 2019 mining grew by 0.9% thanks to the push given by a raise of 19.1% in lead production. For the year, mining decreased 1.5%, while lead production grew 13.3%. Los Gatos, in Chihuahua; Minera Capela in Guerrero; San Martin and Peñasquito in Zacatecas and production by Fresnillo aided in the growth seen by the bluish gray metal. Production rates from other metals show increments and decrements to the following tenor During December: Gypsum +14.4%, zinc +8.8%, silver +7.8%, sulphur +5.2%, coke -25.8%, iron pellets -7.3%, coal -5.2%, gold -2.2%, copper -0-8%. For the year: Overall -1.5%, gold -10.2%, silver +1.1%, copper +4.8%, zinc +7.0%, lead +13.3%, iron pellets -0.5%, coke -16.0%, Sulphur -14.7%, fluorite -5.0%, coal -2.0%, gypsum -0.6%. The trend reflects years of decreasing investment in mining, although some new developments might increase the production on lead, zinc, silver and copper.
- The Future of the Mexican Mining Industry seminar was held during the PDAC convention in Toronto, Canada. Four environmentally focused conferences opened the seminar in which a dialogue table was set with the Mining Sub Secretary Francisco Quiroga, several governors, union leaders, mining company executives, financial analysts and congressmen.
- Lithium exploration projects in Mexico: There are more than 20 lithium exploration projects in the country, most within Sonora, Zacatecas, San Luis Potosí, Baja California and Coahuila. The most advanced is Bacanora Lithium’s Sonora project in Bacadehuachi, but other interesting properties are comprised by OrganiMax’s Salar La Salada in Zacatecas, and Salar Santa Clara and Salar Caliguey in San Luis Potosí; Litio Infinito’s project in Sonora, adjacent to the ground held by Bacanora Lithium and One World Lithium’s Salar del Diablo project in Baja California.
- Industrias Peñoles intends to change the fuel used by its mining trucks fleet in a mine in Sonora. The change involves modifying the trucks to run on LP gas instead of diesel (Milpillas mine?).
- Chesapeake Gold Corp. announced it has an option to acquire El Duraznito project in Durango, which is 18 Km East of First Majestic’s San Dimas mine. Mineralization is represented by quartz veins and quartz bearing breccias along 1,500 m of longitude and 300 m vertically. Those structures are parallel to the San Dimas veins, and appear to be also of epithermal low sulfidation character. A series of rock chip samples on sub-parallel quartz bearing breccias have returned 45 m @ 1.6 gpt Au, 16 gpt Ag; 30 m @ 3.9 gpt Au, 48 gpt Ag; 23 m @ 1.8 gpt Au, 58 gpt Ag; 15 m @ 3.1 gpt Au, 24 gpt Ag. Channel samples on quartz veins returned 10 m @ 4.8 gpt Au, 464 gpt Ag; 2.5 m @ 3.9 gpt Au, 756 gpt Ag; 2.5 m @ 9.7 gpt Au, 343 gpt Ag; 3.0 m @ 2.8 gpt Au, 113 gpt Ag.
- Azucar Minerals Ltd. released results from its ongoing program at El Cobre project in Veracruz. Core length intercepts released include: 158.0 m @ 0.64 gpt Au, 0.26% Cu (including 19.6 m @ 0.83 gpt Au, 0.28% Cu); 71.7 m @ 0.16 gpt Au, 0.12% Cu (including 17.7 m @ 0.04 gpt Au, 0.38% Cu); 179.5 m @ 0.20 gpt Au, 0.22% Cu (including 39.95 m @ 0.15 gpt Au, 0.63% Cu and 17.55 m @ 0.48 gpt Au, 0.32% Cu); 112.2 m @ 0.36 gpt Au, 0.26% Cu; 442.2 m @ 0.44 gpt Au, 0.23% Cu (including 158.0 m @ 0.64 gpt Au, 0.26% Cu); 197.5 m @ 0.32 gpt Au, 0.24% Cu (including 16 .0 m @ 0.25 gpt Au, 0.81% Cu); 193.5 m @ 0.27 gpt Au, 0.14% Cu.
- United States Antimony Corp. reported the successful start up of the Los Juarez Au and Ag production at Los Juarez, Queretaro. Detailed mapping delineated jasperoid silica-rich mineralized pipes over an E-W strike length of three kilometres, and a maximum width of one kilometre. Highlighted individual 1.0-1.5 m assays on drill holes range from trace to 25 gpt Au, 13 to 451 gpt Ag and 0.08 to 1.19% Sb. With a mean grade of 1.09 gpt Au, 102 gpt Ag, 0.65% Sb, and recovery rates of 90% Au, 85% Ag, 70% Sb. The ore is being treated by flotation mill, flotation mill and caustic leach and flotation mill tailings and cyanide leach.
- Mexus Gold US. Announced it is now producing gold daily at its Santa Elena mine in Sonora (not to mistake with First Majestic’s Santa Elena mine, also in Sonora). Mexus plans to produce 5 to 7 Oz Au daily, and then increase to 10 Oz Au per day by the end of the month.
- Bacanora Lithium Plc. provided financial results for the second half of 2019. During the period Bacanora concluded an investment and offtake agreement with Ganfeng Lithium Co, Ltd., raised UK$14.4 M and retained a US$150 M conditional senior debt facility. Engineering work has continued, while full development capital for construction is being pursued.
- Gold Resource Corp. presented production figures for last year, including figures from its Oaxaca mining unit. During the year, 29,435 Oz Au, 1.72 M Oz Ag, 1,859 tonnes Cu, 2,286 tonnes Pb, 5,734 tonnes Zn were produced. Apporting to that production, 629 .9 K tonnes were milled @ 1.73 gpt Au, 82 gpt Ag, 0.38%Cu, 1.88% Pb, 4.64% Zn at the Arista mine, part of the Oaxaca Mining Unit.
- Fresnillo Plc. announced financial results for the year 2019. Silver and gold production diminished 11.6% and 5.1% respectively during the period. Total silver production was 47.4 M Oz, with most of such production coming from Saucito (15.9 M Oz Ag), Fresnillo (24.8 M Oz Ag), San Julián DOB (7.4 M Oz Ag), Ciénega (5.3 M Oz Ag) and San Julián veins (4.2 M Oz Ag). A total of 848 K Oz Au were produced, mostly from Herradura (496 K Oz Au), Noche Buena (105 K Oz Au), Saucito (72 K Oz Au), San Julián veins (62 K Oz Au), Ciénega (62 K Oz Au), Fresnillo (46 K Oz Au). The company also produced 49 K tonnes of lead, from Saucito (19.7 K tonnes Pb), Fresnillo (19.5 K tonnes Pb), Ciénega (4.4 K tonnes Pb ), San Julián (5.4 K tonnes Pb), and 78.6 K tonnes of zinc from Fresnillo (26.3 K tonnes Zn), Saucito (25.6 K tonnes Zn), San Julián (19 K tonnes Zn), Ciénega (7.6 K tonnes Zn). Cash cost per silver ounce varied between ($0.2) and $7 per Oz Ag on the different mining units, and gold between $818.6 and $847.8 per Oz Au.
- Premier Gold Mines Ltd. released operating results for the quarter ending on December of 2019 and full year 2019 results, including figures from its Mexican operations. At the Mercedes mine in Sonora, 667.7 K tonnes were mined @ 2.91 gpt Au, 26 gpt Ag, recovering 95.8% Au, 34.0% Ag, to produce 59,901 Oz Au, 191.3 K Oz Ag. Co-product cash cost was $1,034 per Oz, and co-product AISC $1,263 per Oz Au. For the full year total capital expenditures were $18.8 M, focusing on underground mine infrastructure and development, as well as exploration and replacement of old mining equipment.
- One World Lithium Inc. announced the amendment of the terms of 14.5 M outstanding common share purchase warrants, previously issued by the company (Salar del Diablo, Baja California).
- Consolidated Zinc Ltd. entered into unsecured loan facilities with CZL major shareholders, the Copulos and Retzos Groups. The loan facilities are for A$400 K at an interest rate of 10% per annum, repayable by the end of June 2021 (Plomosas, Chihuahua).
- Alamos Gold Inc. declared a quarterly dividend of US$0.015 per common share and introduced a dividend reinvestment and share purchase plan (Mulatos, Sonora).
- Premier Gold Mines Ltd. closed its previously announced public offering for gross proceeds of $38 M, paying a 5% cash commission, with a reduced 2.5% cash commission on the Orion purchase (check note for further details) (Mercedes, Sonora).
ON RESOURCES AND DEVELOPMENT
- Mag Silver Corp. announced results from the 2019 28-hole program with 33,864 m of drilling on the Juanicipio JV property in Zacatecas. The latest exploration results confirm and expand the wide, high-grade mineralization in the Valdecañas Deep zone and the Anticipada vein, as well as confirming and expanding the Venada vein, and the discovery of the NE trending Valentina and Venadas II veins through drilling and development. Exceptional true width intercepts comprise: 5.7 m @ 3,884 gpt Ag, 8.4 gpt Au, 6.5% Pb, 9.7% Zn, 0.3% Cu; 21.1 m @ 129 gpt Ag, 1.7 gpt Au, 3.5% Pb, 7.8% Zn, 0.2% Cu; 21.2 m @ 147 gpt Ag, 1.2 gpt Au, 3.9% Pb, 8.8% Zn, 0.3% Cu; 1.0 m @ 187 gpt Ag, 10.6 gpt Au, 1.3% Pb, 4.4% Zn; 2.5 M @ 918 gpt Ag, 1.8 gpt Au; 1.2 m @ 279 gpt Ag, 0.7 gpt Au; 0.7 m 1,216 gpt Ag, 3.6 gpt Au.
Gold Resource Corp. updated annual reserve estimates, including figures for its Mexican operations. At the Oaxaca Mining Unit that comprises the Arista and the Mirador mine, 2.83 M tonnes @ 1.97 gpt Au, 122 gpt Ag contain 179,300 Oz Au and 11.1 M Oz Ag in proven and probable reserves.
- Aura Minerals Inc. provided mineral reserves and resources estimates to the end of 2019, including figures for its Aranzazu mine in Zacatecas.
- SilverCrest Metals Inc. released metallurgical test results with increased precious metals recoveries at Las Chispas property in Sonora. After nine months of intensive metallurgical tests involving all veins, the results show an increase on recoveries to 96.1% Au and 93.9% Ag. The design criteria envisages a single stage crushing, a sag mill single stage, gravity recovery of 40% to 50% precious metals, leach recovery for gravity concentrate on a 96 hours leach circuit and leach recovery for gravity tails on 96 hours leach circuit.
ON DEALS AND CORPORATE ISSUES
- Mithril Resources Ltd. presented the 2019 end of year report. The most significant event is the ongoing acquisition of Sun Minerals Pty Ltd., which holds an option on the Copalquin project in Durango. The said acquisition is expected to be completed during the present quarter, with field work and drilling to be undertaken shortly after, as the statutory permits have already been obtained.
- Oroco Resource Corp. closed the acquisition of the balance of the ownership of Altamura Copper Corp., giving the company 100% control of the Santo Tomás porphyry copper project in Sinaloa. The Company holds a 56.7% interest in 1,172.9 ha core concessions of the project, and may increase the interest up to an 81% interest with an investment of up to CAD$30 M. Oroco also holds a 77.5% interest in 7,807.9 ha of mineral concessions surrounding and adjacent to the core concessions.
- Alio Gold Inc. entered into a definitive share purchase agreement to sell Molimentales del Noroeste S.A. de C.V., which owns 100% interest on the San Francisco mine in Sonora, with Magna Gold Corp.. Under the agreement Alio Gold will receive 9.74 M shares of Magna and an additional $5M in cash a year from the closing.
- Sable Resources Ltd. announced the appointment of Dr Ruben Padilla to the position of company president & CEO (Margarita, Chihuahua).
- Equinox Gold Corp. and Leagold Mining Corp. received the clearance decision “from the Comisión Federal de Competencia Económica (“COFECE”) with respect to the pending merger between Equinox Gold and Leagold. COFECE approval was the final government agency approval required before completing the merger, which is anticipated to occur in the second week of March” (Los Filos, Guerrero).
- GR Silver Mining Ltd. announced the signing of the definitive binding share purchase agreement to acquire all the shares of Minera La Rastra S.A. de C.V. from First Majestic Silver Corp., and the ownership of the Plomosas Silver project in Sinaloa. The 8,515 ha project includes the old Plomosas mine, four targets at the drill/resource stage and 16 exploration targets and and exploration database with more than 500 historical drill holes.
- Prime Mining Corp. signed a long-term surface access agreement on its Guadalupe de Los Reyes property in Sinaloa. The agreement signed with the Ejido Tasajera, envisions an initial 15-year term that can be extended for another 15 years. Under the terms of the agreement US$38.3 K were paid on signature, with a following payment of US$20K on year four and US$30 K on year five. If construction begins prior to the fifth year, the annual payment increases to US$30 K, and the payment under commercial production to US$200 K.
- Chesapeake Gold Corp. announced it has an option to acquire El Duraznito project in Durango, which is 18 Km East of First Majestic’s San Dimas mine. Chesapeake is to pay US$228 K in instalments to two concession owners for three years to gain a 60% participation at El Duraznito, and US$500 K to obtain an additional 20%. At the start of commercial production Chesapeake is to make a final payment of US$550 K to the vendors.
- Fortuna Silver Mines, Inc. Provided an update on the status of the legal proceedings related to a disputed royalty on one of its extracting mining concessions at the San Jose mine in Oaxaca. Fortuna initiated legal proceedings against the Dirección General de Minas (DGM) to contest the procedure taken by the DGM to cancel one of its mining concessions if the disputed royalty plus VAT is not paid before March 15, 2020. A permanent stay of execution (amparo) was granted, but the final ruling might take months and the company might be required to pay the disputed royalty.
ON SOCIAL RESPONSIBILITY
- INFONAVIT executives from the Zacatecas Direction provided the Peñasquito mine with two awards for its excellent compliance with the payments of dues to the housing fund of its workers.
Content like what you have just read can be seen at https://gambusinoprospector.com/ and at LinkedIn’s Mexico Mineral Exploration Group.
On the image below: Hydrothermal breccia sealed by silica in a thermal spring in Baja California, picture by Jorge Cirett.