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Diversification to Serve Entire Value Chain

Francisco Alanis - DMV Mining Intelligence
CFO

STORY INLINE POST

Mon, 10/22/2018 - 11:16

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Q: Why did DMV Mining Intelligence decide to cover such as wide array of business areas?
A: DMV was born from the synergies and experience of operating a private mine, which led the company to look for new business opportunities within the sector. From there, the opportunity to provide consulting in underground mining became a reality and the division has grown considerably since its inception. Since I joined DMV, my efforts have focused on further institutionalizing the operation of the company’s divisions and strengthening their added value. The group can provide a greater added value across the entire value chain of the mining sector, from the exploration and acquisition of mines, through the planning, development, production and mineral processing to sale and closure of the mines.
Q: Which of your five divisions is the most important to DMV Mining and why?
A: In Guanacevi, Durango DMV Mining still operates in the mines of San Rafael and Fanny through a flotation plant. But the division is also exploring another project in Huahuapan, located in the municipality of San Dimas, Durango. Currently, DMV Contracting is the main mining contractor for Minas de Bacis and is also working with Fresnillo in its Fresnillo mining unit. DMV Contracting has grown considerably in sales and has become the most important for the company in terms of volume, although it does not contribute to marginal utility like DMV Mining. Overall, from all the business units, the mining division has shown the best performance and some minerals such as zinc have strengthened too. Although generally mineral prices have dropped.
In the mining area the company expects to continue with same exploration and development program, but there is also the possibility of increasing the capacity of the plant by 30 percent, as well as extending the scope of future contracts. The company wants to shift traditional contracts that are based on the development of the underground metro and exchange these for development and operation of junior mines. For this project, DMV Mining will mainly focus on junior mines of underground mining operation in the north of the country, due to the operative facilities.
Q: How do you differentiate yourself from other contracting companies that offer the same services?
A: DMV prioritizes the quality of its services through the support of its divisions such as DMV Consulting and DMV Machinery, the use of a maintenance software and internal operating systems. In comparison to other contractors, the company has a more sophisticated service and, in the audits, has been satisfactorily rated. So, the way in which DMV operates is the main strength and added value for its customers, as well as the experience the company has gathered over the years working in the sector.
Q: How is your company maintaining its competitive edge?
A: The main challenge is to obtain the capital to boost competitiveness. In the case of DMV, it was achieved through the sale of a project with Endeavor to a Canadian company with access to the TSX. It has required patience to get DMV to the place it is and to create a synergy between the services offered by the company. It has required us to balance our competitiveness when some business cycles have ups and downs. For example, DMV Mining is doing well and this has helped the DMV Contracting, which has presented a slower progress, so both divisions complement each other and strengthen the performance of the company as a whole.
Q: What are DMV’s expectations for the coming years?
A: The central objective for DMV is to maintain its equipment capacity and renew it through more investments. It is strategic for mining operators to invest in having their own equipment to guarantee the flow of the operations, since in the mining sector in comparison to others, the possibility to buy or rent equipment can be slim or it can take up several months to arrive. DMV strategically invests in underground mining equipment to maximize the opportunities that would otherwise be lost without the ownership of the right working tools such as mining jumbos and low-profile front loaders.

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