Excellon Resources’ Platosa Mine to Stop Operations in 3Q22

Excellon Resources confirmed that it is no longer economically viable to operate its Platosa mine in Durango because of the project’s many challenges. Consequently, the company plans to close operations in 3Q22. However, the company announced that it wants to continue operating in Mexico. Therefore, it is seeking to acquire new mining assets.

Excellon explained that duroing the past two years, the company was forced to confront the impact of lowering rates, an increase in prices for the products it consumes and legislative changes, reported MBN.

The situation of the mine became even more complicated after the Platosa Union, initiated labor actions a the mine this March, following the company’s refusal to increase wages. The Union argued the company had violated Collective Work Contract by failing to make good on 2022’s raises. Excellon said that the union had previously agreed on the terms for the 2022 collective bargaining arrangement following numerous concessions from the company. After several negotiations, where the government of Durango intervened as a mediator, the labor conflict was resolved and operations resumed on April 1, 2022.

Excellon explained that all these factors limited the mine's production in 1Q22 to 209,381oz of silver, 19.2MMoz of lead and 27.2MMoz of zinc, showing a decrease of 36 percent, 42 percent, and 29 percent respectively compared to production in 1Q21. Meanwhile, its revenues stood at US$8.5 million, 13 percent less than the US$9.8 million of 1Q21. However, the company explained that this loss was partially offset by higher metal prices.

Excellon explained that based on an in-depth analysis of the mine, recent drilling results and economic factors, it has decided to close operations in the next quarter. However, the company announced that it has exploration programs for 2H22 to find and acquire new assets in the country. Previously, Excellon said that one of its main exploration target areas will be around the Platosa mine, since there is a high probability of finding deposits with high mining potential.

“We have ramped up production smoothly following the labour action that disrupted production in March. Despite limited production in 1Q22, we achieved good revenues and lower all-in sustaining costs, largely due to strong base metal prices and improved concentrate treatment terms. As we head towards the wind-down of Platosa operations in 3Q22 we are preparing for our exploration programs and actively pursuing acquisition opportunities for producing and development stage assets in Mexico,” said Brendan Cahill, President and CEO, Excellon Resources.