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News Article

Guanajuato Mining Cluster Would Boost Industry

By Alejandro Ehrenberg | Tue, 08/18/2020 - 13:02

Guanajuato’s Minister of Sustainable Economic Development Mauricio Usabiaga spoke at the state’s Congress about the importance of creating the Guanajuato Mining Cluster, whose objective would be to boost mining in the state, reported México Minero.

Usabiaga stressed that Guanajuato, a state with a long mining tradition, was at present not heavily focused on mining. Developing the industry would benefit the state’s capital, as well as other regions. According to México Minero, Usabiaga stated that it will be necessary to attract investment and human capital, in addition to avoiding brain drain. “There is still a lot of potential in the state’s capital. We need to attract investment, so miners see the potential that the city has. That is why we are promoting the Guanajuato Mining Cluster. One of the municipalities that will benefit the most will be Guanajuato city,” Usabiaga remarked. 

Usabiaga went on to stress the importance of Guanajuato city as the state’s tourism crown jewel. However, México Minero pointed out, it is important to diversify investments and the mining industry is ideal to this purpose.

The most important mining developments near the state’s capital are operated by subsidiaries of two Canadian companies, Great Panther Mining and Endeavor Silver. Great Panther recently reported its 2Q20 unaudited consolidated financial results. The company achieved records for mine operating earnings before non-cash items, net income, adjusted EBITDA and cash-flow from operating activities as a result of strong production results at its Brazilian operation and a rise in the gold price that resulted in an average realized gold price of US$1,728/oz for the quarter. With the restart of Great Panther’s operations in Mexico in June (after a government-mandated, pandemic-related pause), a strong increase in the price of silver and new records for the gold price since the end of 2Q20, the company expects continued strong cash-flow generation in 3Q20.

The combination of a strong rise in the gold price and record production at Tucano mine in Brazil lead to a substantially lower AISC and drove a significant increase in cash flow from operating activities to a record US$19.5 million for 2Q20. On a consolidated basis for 2020, we expect to produce 146,000 to 158,000 AuEq at AISCs in the range of US$1,150/oz to US$1,250/oz sold. We are well positioned to deliver strong results while we continue to keep the safety and health of our people our No. 1 priority,” stated Great Panther’s President and CEO Rob Henderson.  

Alejandro Ehrenberg Alejandro Ehrenberg Journalist and Industry Analyst