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Accendo and Telson Join Forces to Develop Flagship Gold Project

By Alejandro Ehrenberg | Wed, 06/17/2020 - 17:10

The COVID-19 pandemic has not affected the gold industry's bullish outlook, says Joe Foster from global investment manager VanEck in a Kitco News article. Foster adds that he “looks for gold to test US$2,000/oz in the year ahead, with higher prices benefiting producers that are already showing an increased focus on profitability and cash flow.” The favorable gold outlook has whetted investors’ appetite for promising projects. Accendo Banco’s recent loan to Telson Mining for completing the construction of the Tahuehueto mine in Durango is a case in point.

In a conversation with Mexico Business News, Telson Mining’s CEO Ralph Shearing provided an overview of the project. “Tahuehueto is a district-scale project hosting a large epithermal system. It is about 70 percent built and final assembly of the plant is pending. We need to complete the installation of the crusher, conveyor feed circuit to the ball mill, the power plant and water supply system and prepare the tailings facility. We plan to produce 1,000 tons per day at the beginning. Our goal is to outline resources and reserves to double or even triple the size of the mine over the next two to five years. Tahuehueto is Telson’s company-building project. Our economic studies suggest free cash flow of US$20 million to US$30 million in the first year of operations. The mine will produce the type of free cash flows to propel Telson into a very profitable junior mining company. With successful expansion, Telson will become a significant mid-tier mining company.” 

Telson Mining’s recent agreement with Accendo Banco will enable the operator to bring Tahuehueto to fruition. The company expects to complete construction in early 2021. As per information released by the company, “Accendo Banco will be subject to a final due diligence, providing Telson with a US$12 million Medium Term Loan Facility (MTLF) for the purpose of funding construction at Telson's Tahuehueto mining project and general working capital purposes.”

“We are very excited to become involved with Telson Mining Corporation as one of their main financial backers” said Javier Reyes, CEO of Accendo Banco. “Our technical mining team has come to know the Tahuehueto gold project well and Accendo Banco is convinced that it is one of Mexico's premier advanced gold mines under development and will soon reach production with our financial assistance. We are committed to help Telson reach production at Tahuehueto and intend to use our financial knowledge and network within the Mexican mining industry to assist with additional funding if required.”

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Alejandro Ehrenberg Alejandro Ehrenberg Journalist and Industry Analyst