LATAM Mining Projects to Alleviate Global Silver Supply Deficit

While the Juanicipio, Terronera and Cordero projects in Mexico; Magistral and Romina projects in Peru; and Nueva Esperanza project in Chile will not produce silver as their primary resource, they could help to alleviate the chronic deficit in the global supply of this precious metal, say experts.

According to data from The Silver Institute, global silver extraction dropped to 822Moz in 2022 due to disruptions caused by the pandemic and reduced contributions from China and Peru. However, this was partially offset by increased production in Mexico (3.1Moz) and Argentina (3.0Moz). This year, global volume is projected to reach 837 Moz.

Although some mines began production only last year, they could address the structural supply deficit. Global demand in 2022 reached 1,242Moz, resulting in a deficit of 238Moz. The same phenomenon is expected to occur in 2023, warned the organization.

Nevertheless, three Latin American countries are among the Top 10 global silver producers: Mexico with 6,300t, Peru with 3,100t and Chile with 1,600t annually, according to data from the US Geological Survey. 

The Juanicipio project, valued at US$440 million, is owned by Mexican company Fresnillo and Canadian company MAG Silver. They estimate an annual volume of 11.7Moz of silver starting in the second half of this year. Terronera, owned by Canadian company Endeavour Silver, is located in the Mexican state of Jalisco. With an investment of US$175 million, this project will produce 3.3Moz of silver annually for 12 years starting in the second half of 2024. In addition, Minera Titán, a Mexican subsidiary of Canadian company Discovery Silver, owns the Cordero project in the Mexican state of Chihuahua, valued at US$455 million. The feasibility study, which will incorporate the results of the latest drilling campaign, will be presented in 2024. Results suggest that 33Moz of silver could be produced annually for 18 years.

In Peru, Magistral’s operation is in the hands of the local subsidiary of Brazilian company Nexa Resources, in the Ancash Region. Although the US$493 million asset is primarily copper-focused, it would contribute 1,000oz of silver annually, starting in 2026, for 15 years. Administrative and financial issues delayed construction from last year to this year. Meanwhile, Romina is a US$280 million polymetallic project owned by local company Volcan. It is located in the province of Huaral and operated by Minera Chungar. Construction will begin this year to exploit 11.5Moz of silver annually for 13 years, starting in 2025.

In Chile, Laguna Resources, a local subsidiary of Australian company Kingsgate Consolidated, owns the Nuevas Esperanza project, valued at US$215 million, in the Atacama Region in the northern part of the country. According to the local agency Cochilco, production is estimated at 3.5Moz annually starting in 2025. However, in its latest quarterly report, Kingsgate indicated that it is seeking new owners for the project.