Corporativo Minero Minas de Mexico began as a group of businessmen focused on different industrial segments, until meeting Juan Vera, a geologist who gave them a complete perspective of the mining sector. “We noticed the industry is normally focused on discovering large projects but Mexico is a land of opportunities with a plethora of medium scale projects that are waiting to be exploited,” explains José Gabino, the company’s CEO. “Hence, our mission has been to integrate ourselves into small mining operations. After analyzing the projects we promote them to international investors to obtain funds for development and job creation in the country.” He shares that all Corporativo Minero Minas de Mexico’s current assets have undergone a thorough reengineering process and evaluation in order to measure their true potential.

It is important to trace back the developments and evolutions the Mexican mining sector has experienced to explain the business value of small projects. During the mid-1970s Mexico started to push for the development of the mining sector and local companies required skilled technicians that had to be brought from overseas. “During that time, I worked with Industrias Peñoles and I noticed the operations were focused on medium to large scale projects like the Reforma mine where 500t/d were produced,” explains Juan Vera, Director of Exploration. “At the La Ciénega project in Durango, the necessary resources for operations producing 2,000t/d were needed during the drilling stage. At this point I became aware that small mining operations were lagging behind even though these properties had deposits that would allow an operation of 150-200t/d with a higher internal rate of return than those of the major corporations.” While working as a consultant in the late 1980s, Vera developed a small pit mine in Nayarit in which he invested US$1 million. During its five-year life cycle over US$20 million was generated.

Vera believes that Corporativo Minero Minas de Mexico has an efficient model focused on an abandoned market niche, and while large mining corporations bill billions of dollars annually his company’s projects offer a 40 percent recovery rate for investors. “Our sales are supported by the production of 500,000 silver ounces, 10,000 gold ounces, and 13 million zinc pounds, providing a cash flow of between US$10 million and US$12 million per year,” he boasts. “Luckily for our project, the government imposed a 7.5 percent royalty tax to support the communities neighboring mining operations, which in the future will help the municipalities generate further development.” Nonetheless, he is concerned that the government stopped providing exploration financing and even though Corporativo Minero Minas de Mexico has the support of private banking institutions he would like to see the authorities more involved in the improvement of the sector considering its relevance for the Mexican economy.

Gabino elaborates that officials from the Ministry of Economy have stated that despite Mexico’s growth opportunities, the country has a 15-year lag in mining development. “We have spotted interesting projects owned by people that do not want to deal with these operations anymore, so our approach has been to establish contact with the land holders to grant legal support so the fields can be studied, analyzed, and exploited to the tangible benefit of all parties,” he clarifies. “Our job is to look for attractive properties, obtain funds, and start production. Another differentiator we have is that big companies are not interested in our projects so we are dealing with a virgin market where everybody can win.”

Vera continues to explain the company’s exploration program, which aligns the group’s mission to focus on junior mining. The strategy the company has followed is to locate old mining districts where previous operations took place but were abandoned. “We evaluate the property, calculate the proven and probable mineral or metal reserves, and estimate the mine’s lifecycle to decide whether we open a plant or continue searching for other projects,” he explains. “We believe that half a million tonnes of proven minerals ensure a 10 year productive timeframe.” Under this venture, Corporativo Minero Minas de Mexico has identified three projects. The first one is located in the Mexican Silver Belt, near Fresnillo’s production plant. The second project, located in Sierra Mojada, has proven lead and silver resources and Vera predicts 13 million ounces of zinc. The last project is more conceptual and focused at a grassroots level in which the company has identified lead, zinc, molybdenum, and some copper.