Ramon Perez
President and Director
Candelaria Mining
View from the Top

ESG Criteria Opens the Door to More Funding

By Paloma Duran | Thu, 09/02/2021 - 15:07

Q: What are the company's investment plans for its assets in Mexico?

A: We are working on two projects: our flagship asset is the Caballo Blanco project in Veracruz and the other is the Pinos project located in Zacatecas. Caballo Blanco is a great asset and together with Agnico Eagle, we are planning to allocate a significant investment in 2021. It is likely that we will start a drilling program and an ESG program that will run parallel this year.

Regarding the Pinos project, we have all the required permits and we are now evaluating financing opportunities to finish construction and start production. We expect to begin producing 15,000oz and eventually increase that to 20,000oz through successful exploration efforts.

Q: How important has ESG criteria become in accessing funding in recent years?

A: ESG has definitely become an essential component for institutions and investors when investing in a mining company. It is also an initiative to responsibly manage a project, from its exploration to its production phase. These criteria are required by all investors today, which is why more companies are pushing for broader and better ESG programs.

ESG criteria did not receive a great deal of attention in the past but now, it is at the core of many companies. Today, once mining companies have identified good deposits, they launch their ESG programs right away. I think Mexico is beginning to grasp this idea and, as a result, it is becoming a stronger option for financing.

Q: How does Mexico compare to other mining countries in Latin America?

A: Mexico has a phenomenal mining history. Mining companies do not need to look for people outside the country because Mexicans have a great deal of experience with mining. In addition, the industry is very mature compared to other countries like Ecuador that are still developing the sector.

However, Mexico has significant safety issues, which is definitely something that raises many questions from investors. I think that the perception of safety in Mexico is perhaps a bit exaggerated. However, it is true that sometimes companies cannot work under such conditions. As a result, the government should help companies feel more secure operating in the country. It is not an easy task but I believe that through alliances and working groups, initiatives can be proposed to improve the situation.

Q: What can Mexico learn from other mining countries?

A: We need to re-educate people to understand the importance of mining. Many people do not know that almost everything comes from mining. In addition, Mexico could learn from other legal and security systems, since having a slightly flawed system weakens the country's investment attractiveness. Businesses need to know that they can trust the government to provide adequate security for their people and assets, as well as knowing the government can help them if a problem arises.

Q: How has the company reached out to nearby communities to involve them in projects?

A: Zacatecas is a mining-friendly state and, more specifically, Pinos is an area where mining has always existed, so community engagement has been faster and easier. Around Pinos, the mining communities truly understand how the sector works and the benefits it brings to communities. Our ESG program has been very successful and we are constantly improving it to generate better results.

At Caballo Blanco we need to come up with a different approach for the communities. We have had some meetings with the locals to start cultivating a close relationship, as well as to allocate investments to involve them in the project. It is a challenge because Veracruz is not a mining state like Zacatecas. The key to success will be to provide them with reliable information, so that people or NGOs who have a bad perception of the sector feel comfortable and participate in the development of the project. We are developing the first ESG program to be held there and we hope it will lead to a better relationship with the communities.

Candelaria Mining is a metals-focused mining and exploration company with two advancing gold projects in Mexico: its construction-ready high-grade underground Pinos mine project in the state of Zacatecas and the advanced-exploration stage Caballo Blanco project in the state of Veracruz.


Paloma Duran Paloma Duran Junior Journalist and Industry Analyst