Q: How does Excellon Resources’ outlook for silver prices affect the company’s business plan?
BC: Platosa has the benefit of high grade silver, lead and zinc production with 50 percent of our revenues from base metals. As a result, we have some protection against weaker silver prices and volatile fluctuations. We still strongly believe in silver’s potential. It is a vital metal, and one of the most reflective and conductive materials with multiple uses that permeate every new technology. We are living in the future and as we make more advancements, we must go back to the source to build our dreams. Our main objective is to continue to unlock exploration potential and secure future supply.
Q: What part does Mexico play in your portfolio and what are your expansion plans in the country?
BC: We have two key projects in Mexico. We have been operating the Platosa Mine in Durango for over 12 years. The mine sits on just 50ha of 21,000ha of mineral concessions. We have barely scratched the surface. With production now ramping up, we are focusing our efforts on uncovering Platosa’s expansion potential, both near the mine and regionally. Our exploration efforts for 2018 include a 30,000m drill program.
Our second project is located in Zacatecas at Miguel Auza, 14,000ha of mineral concessions with a historical resource and an operating and scalable mill. We have been trucking Platosa ore to Miguel Auza with excellent recoveries for the last few years. Recently, we reviewed the exploration potential from a regional perspective and found 10 epithermal veins right on the surface that have never been drilled to depth, with historical results at shallow depths assaying multi-kilo silver values. We consider this project a new frontier to expansion. Anything that we find in that area goes back to our mill.
We also continue to see a trend to own big pieces of ground worldwide, allowing continent-sized geology to be carried out on a regional scale. That is how the next great discoveries will be made; think big to find big. Our approach to exploration is somewhat unique, as there are few companies in Mexico thinking on the same scale. Both our projects are located in the heart of world-famous mineral belts, home to some of the largest mining companies. Recently, we entered into a toll mining agreement with Hecla Mining to process ore from the San Sebastian Mine at our Miguel Auza facility, securing additional cash flow once the bulk sample-testing program is complete in the second half of 2018.
BP: I believe that exploration has to be a focus. Without exploration, there is no ore. We think that now is the time to really start that exploration again because there are many quality projects that have been underserved in recent years. Considering the geological potential in Mexico, we need more exploration to bring those projects into the pipeline.
Q: How do you want to grow in the future?
BC: La Platosa is the highest-grade silver mine in Mexico and one of the highest-grade silver mines in the world. It is a fascinating project that has been challenging but with hard work and, sound engineering, we have turned our operation around and started to see the benefits of recent mine optimizations. Additionally, we have focused on continuing with geophysics processing, carrying out more mapping and enhancing our database during down times. We are very well-positioned for the upside of the market.
One of the main issues facing our industry is the reduction in exploration expenditure in recent years. Development spending has recovered from the depths of this bear market but without the exploration it is impossible to keep mines going or to find new projects. Excellon is working toward four kinds of discovery: continue to expand existing resources, find more high-grade projects like Platosa on the bigger ground package, discover the large-scale skarn deposit associated with Platosa mineralization and make a high-grade discovery at Miguel Auza on the northern extension of the richest silver belt in the world.