/
View from the Top

Exploring the Unexplored in Oaxaca

By Lorenzo Núñez | Mon, 11/22/2021 - 16:09

Q: How is production progressing at San José and what plans do you have to further increase it?

A: In 2020, we produced over 6.2 million ounces of silver and we were among the Top 10 biggest silver mines in the country, in addition to the 33,000 ounces of gold we produced. For 2021, there is the possibility of a drop in those numbers due to the depletion of metals in the main veins, which is why we are pushing forward additional mass exploration programs looking to boost our reserves, which will increase our silver and gold production.              

We have been extracting 3,000 tons per day since 2016. Within the lifespan of the mine, we are planning to continue that production level with the veins that will be uncovered during the exploration projects. We are very optimistic in this regard because Oaxaca offers great mineral conditions as it remains a relatively unexplored state.

Q: What does the company’s new exploration program at San José entail?

A: In 2021, we began our intensive exploration project in San José. Our US$10.9 million budget is specifically targeting Oaxaca state, where we want to reach over 40,000m in exploration. We began the year with 34,000m and throughout the exploration process this year, we have identified new areas in the deepest parts of the mine, which show indicators of potential resources. Due to COVID-19 restrictions, in addition to time constraints, our 40,000m objective might not be reached but we have reason to remain optimistic.

Q: What are the new technologies that are generating a significant improvement in the company’s operations?

A: We are at the vanguard of technological mining operations. We are in contact with the biggest worldwide technology suppliers to optimize mining operations. We do not settle with just reducing costs and increasing production. We are also looking to further minimize our environmental impact. We are looking for greener technologies and equipment for our operations, as well as improving our internal communication systems within the operation. In addition, we are looking to improve truck logistics and operating equipment to decrease carbon dioxide emissions. We are transitioning to having fewer and smaller equipment on site, which will eventually open the door to finding more technologically advanced solutions, specifically on the automated spectrum. We are looking to include these in next year’s budget and objectives.

Q: How does Minera Cuzcutlán push community development throughout the mine’s life cycle?

A: Our objective goes beyond producing silver and gold, we also aim to contribute to the development of neighboring communities. The community’s voice is just as important as our own. Over 70 percent of the 1,200 employees in the mine are from neighboring communities. They get access to all the training necessary to operate the mine; in fact, the training they get could prepare them for other industries. In addition, we have a firm commitment of maintaining an open channel with the community to properly communicate the benefits of mining with the intention of putting to rest any concern surrounding these operations.

When we first arrived in 2006, we were met with a mass migration of working men from the state of Oaxaca searching for better opportunities in the US, leaving women alone back home. With the arrival of the mine and all the opportunities that came with it, there is no longer a need to travel to the US. We also provide training courses and financial support exclusively to women. In the beginning, women made the uniforms for our employees. Today, some women have their own clothing businesses, which we are dearly proud of. In addition, the arrival of the mine meant further development for local businesses, which over 150 local suppliers that now contribute to the community by also developing businesses and activities.  

Q: What are the company’s strategies and technologies around water management?

A: We are very proud of our two water plants. One is managed in Ocotlan, which is around 15km away from our operations. This plant receives and manages the drainage of the community as part of our agreement. We invested in the rehabilitation of the plant, which was in very poor condition when we arrived. Part of the water that arrives at the plant is returned to the community for their use. The other part goes to our operation. So, we are taking that wastewater and repurposing it for multiple uses. The other major benefit that this plant provides is the redirection of the entire drainage system. Previously, all the drainage would reach the Atoyac River, which was very polluted. Today, that water no longer reaches the river.

The other method of water management that we use involves the efficient capture of rainwater through our tailings damn. In our other plant where rain is processed, 96 percent of it is recovered, while the remaining 4 percent is lost to evaporation, showing a great form of water efficiency.

Q: What are the main differences between the way the mine is run today and how it will run in three to four years?

A: There is still a big number of unexplored opportunities around the mine. This is a virgin area in terms of mining exploration. We are looking to open up a platform of communications with the neighboring communities of those unexplored areas to evaluate our exploration strategies. If these turn out to be successful, it would further increase the lifespan of the mine. This would mean integration of even newer technologies and further community development.

Q: What are some of the main challenges facing the company and how it seeks to generate a better dialogue between stakeholders?

A: One of the main challenges was the huge change in the legal labor framework implemented by the new administration. This has remained an ongoing challenge that changes pretty much on a daily basis.

It is in our best interest to maintain a good relationship with the Ministery of Economy. They have  been very open with the mining industry to discuss legal and social matters. We also maintain a good relationship with the local authorities. It is important for us to maintain good relations because it allows us to better understand the necessities of neighboring communities, which in turn provide us with the tools to further develop them.

Minera Cuzcatlan is developing an exploration program in San José, which includes drilling multiple targets and expanding defined resources and reserves. Fortuna's 2021 exploration program budget for San José is US$10.9 million, which will be used for 33,800m diamond drilling and underground development.

Lorenzo Núñez Lorenzo Núñez Junior Journalist & Industry Analyst