Gold Deposits in Mexico Show Promising FutureBy Paloma Duran | Thu, 11/26/2020 - 15:33
Mexico has multi-million-ounce undeveloped gold deposits, some of which are considered the largest in the world. BNamericas analyzed the main gold projects in the country, which combined have 50Moz.
Mexico ranks among the world’s Top 10 gold producers in the world and states like Sonora, Chihuahua and Guerrero have large deposits. The country boasts some of the world’s most attractive projects like the El Limon Guajes mine, which achieved a remarkable comeback after its blockades in 2017, reported MBN.
BNamericas analyzed the largest gold deposits that could be developed in Mexico, and considers the following as the most promising: Metates, Camino Rojo, Orisyvo, Media Luna, Cerro del Gallo and Ixtaca.
According to the analysis, Metates in Durango is the largest undeveloped gold deposit in Mexico and is among the largest in the world. It hosts 19Moz of gold, of which 18.8Moz are in the Measure and Indicate (M&I) categories. The project also has great silver and zinc deposits.
In an interview with MBN, Randy Reifel, CEO of Chesapeake Gold Corp, said the company is planning to test Metates ore this year with different oxidation processes to determine if they are amenable and viable. If they are, the next step will be to determine if the technology is scalable for a large open-pit mine.
Reifel added that successful overall results would simplify the current flowsheet and significantly lower capital costs with similar or even reduced operating costs.
Orla Mining’s Camino Rojo project in Zacatecas hosts 9.46Moz of gold in the M&I categories and 1.70Moz in the Inferred category. The company plans to begin production by the end of 2021, which will produce 1.70Moz of gold per year from oxide resources, reported BNamericas.
Camino Rojo is destined to be one of the most exciting mining projects in Mexico, according to Jason Simpson, Orla Mining’s CEO, who told MBN the company’s ambition is to be a counterexample to any bad ventures that have tilted the conversation toward a negative tone in Mexico.
Simpson added that the company’s detailed engineering is 73 percent complete. Before the permit from SEMARNAT was granted, Orla Mining pre-ordered and committed over US$50 million for long-lead time items. Major contracts for earth moving and civil work are well advanced and are expected to be finalized this year, reported MBN.
Fresnillo’s Orisvyo project hosts 6.79Moz of gold in Indicated resources, 1.90Moz in the Measured category and 914,000oz in Inferred resources. The company completed the preliminary valuation and projects a gold production of 182,000oz per year, which will require an initial investment of US$430 million, reported BNamericas.
Fresnillo expects to start production in Orisyvo in 2023. According to an MBN article, Fresnillo’s CEO, Octavio Alvídrez, said “the combination of higher commodity prices and lower costs has resulted in a significant rise in the company’s profitability.” Alvídrez also highlighted the company’s extensive engagement with stakeholders, which has resulted in a high level of trust between the company, its workforce and the government.
The Media Luna deposit in Guerrero hosts 1.32Moz of gold in M&I resources and 2.68Moz in Inferred resources. According to BNamericas, the drilling program of Torex Gold Resources has been reactivated after it was paused due to COVID-19 restrictions. The company said it is expecting to produce 170,000oz of gold per year along with silver and copper byproducts, with an initial investment of US$496 million.
In an interview with MBN, Jody Kuzenko, COO of Torex Gold Resources, said the company is targeting initial production from Media Luna by early 2024. Over the last couple of years, the company has carried out several trade-off studies as it gears up to complete a feasibility study for Media Luna in 2021.
Kuzenko said the infill program completed in 2019 was successful in upgrading over 12 million tons of Inferred resources to the higher confidence categories. Kuzenko mentioned the 2020 infill program is targeting to upgrade an additional 7 to 9 million tons of Inferred resources, reported MBN.
Argonaut Gold’s Cerro del Gallo project in Guanajuato hosts 2.86Moz of gold in M&I resources and 71,000oz in the Inferred category. The project is expected to produce 64,000oz of gold per year and silver and copper byproducts within the next 15.5 years. The project will have an initial investment of US$134 million, reported BNamericas.
In an interview with MBN, Peter Dougherty, President and CEO of Argonaut Gold, said Cerro del Gallo project in Guanajuato is larger than those the company is already running in Mexico as it sits on top of 3Moz identified resources. Therefore, the first chunk the company would take out is 1.6Moz. Dougherty added it will take 15 years to process it, which makes it a project with a very long life.
Dougherty said it would be perfect if the environmental permit for Cerro del Gallo was granted around May 2021. Dougherty assured the company has experience in this kind of operation and has the required know-how to build all environmental safeguards, reported MBN.
The Ixtaca deposit of Almaden Minerals in Puebla hosts 1.14Moz of gold in Indicated resources; 862,000oz in Measured resources and 412,000oz in the Inferred category. The project is expected to produce 108,500oz of gold per year with an initial investment of US$174 million, according to BNamericas.
In an interview with MBN, Daniel Santamaria, Mexico Vice President of Mineria Gorrion, Subsidiary of Almaden Minerals Ltd, said Ixtaca will be the first modern metal mine in the state of Puebla. “Therefore, the potential of the project is undeniable.” However, its development requires the constant support of government authorities.
Santamaria said the company believes that permanent social licenses do not really exist. They must be earned and nurtured every single day by working together with local communities, government institutions, media and other relevant stakeholders.
He also said mining can be a tremendous engine for socioeconomic development in Mexico’s remote regions, which is one of the main objectives of the current federal administration.