Creating Value Through Innovative Mining

Miners agree that the best place to find a new mine is around the area of an existing one. This was Hecla’s strategy with its San Sebastian mine acquired in 1999 from Monarch Resources in the state of Durango. “The mine operated from 2001 to 2005 until exhausting estimated reserves and stopping production,” Carlos Aguiar, Vice President Mexico of Minera Hecla says. Afterward, Hecla continued exploring the property and found new reserves to ramp up production in 2015. “Our plan for mining the middle vein goes up to 2020, mainly with silver and gold reserves. We have increased our exploration to ensure growth over the next few years.” Hecla’s goal is to procure mine properties in the best-known mining districts in the world.
Although Aguiar believes silver prices, which have been stagnant in 2018, will recover in the short term, metal-price dynamics have influenced Hecla’s strategy to also focus on diversifying into several metals. Exploration in San Sebastian continues to identify new high-grade resources to extend the cyanide milling circuit, as well as increase the amount of polymetallic Hugh Zone-style mineralization. But different metals imply infrastructure adjustments for different treatment processes. To avoid this expense, the company rents a third-party mill.
In San Sebastian, it leases the plant from Golden Minerals in a contract up to 2020. “We have been able to extend this agreement three times as we kept finding new ore zones,” he says. Hecla entered into a toll milling agreement in which sulfide ore will be trucked 26 miles to Excellon’s Miguel Auza flotation mill facility in Zacatecas. “As Excellon’s plant, we expect good results from this partnership and our goal is to start production in 2019 or 2020,” he adds.
Diversification also has the company looking for new projects in the country. “We remain open to acquiring new properties in Mexico and we have set a budget for this goal,” says Aguiar. “We are constantly searching, both here and abroad.” Apart from diversification, Aguiar says that another way for operators to mitigate the inherent risks of cycles is by adopting new technologies. “Mining companies are becoming more innovative and investing in new technologies to increase productivity while lowering mineral production risks,” he says. But he points out that it is not just about technology in mining processes as metals demand is driven by global innovations. Aguiar highlights that both are inextricably linked. For example, the rise of electric vehicles means investors are placing bets on minerals such as lithium and cobalt while automated vehicles can also be remotely used in mines to minimize safety risks and increase efficiency.