Mexican Gold-Silver Projects Among LATAM’s Heavyweights

Despite the downward-trending gold and silver prices, mining companies are planning to invest significantly in five projects throughout Latin America, two of which are located in Mexico. These projects are expected to significantly increase gold and silver production in the coming years.

Since the start of 3Q22, mining companies concluded three Preliminary Economic Assessments (PEAs) and two feasibility studies for their assets in Latin America, which stand out as key projects due to their potential production and their initial CAPEX. These projects are located in Colombia, Brazil, Nicaragua and Mexico, with the latter being the only country with two projects.

According to studies by the respective companies, these projects jointly hold an initial CAPEX of over US$1 billion and have the potential to boost the region’s output by over 282,000oz/y of gold or 12.7Moz/y of silver equivalent. However, despite the potential production, companies must be careful when calculating their potential revenues, as they have to consider that metal prices continue trending downward. Currently, gold and silver are traded at approximately US$1,618.2/oz and US$17.77/oz respectively, while price assumptions in the five studies are set at between US$1,600/oz and 1750/oz for gold and US$21.95/oz for silver. 
Jointly, the Mexican projects consider an initial CAPEX of US$269 million and hold the second and fifth position among the Top 5 Latin American gold and silver projects.

The Cerro las Minitas project, located in Durango, is developed by the Canada-based Southern Silver Exploration. According to the company’s PEA, it has the potential to become a large-scale underground mine with significant revenues regardless of low precious metal prices. The mine is expected to produce 11.4Moz/y of silver equivalent, including 4.7Moz/year of silver. The company says that although the economic outlook does not appear to be positive, the project has potential. Its drilling program was expanded since the property remains under-explored. “The current PEA presents the outline of a large-scale underground silver and base metal mine, which can only grow larger and more valuable as drilling continues to define additional high-grade mineralization,” said Lawrence Page, President, Southern Silver Exploration. 

The Cerro de Oro project is located in Zacatecas and developed by the Canada-based Minera Alamos with an initial CAPEX of US$28.1 million. According to the project’s PEA, it will be an open-pit project with a potential production of US$58,400oz/y of gold and a lifespan of eight years. The company is working on obtaining environmental permits and changing the use of land, which must be completed before taking any construction decision. 

Among the other gold and silver projects in the region is the La Cumbre project in Colombia, developed by Batero Gold with an initial CAPEX of US$170 million, plus US$248 million for its expansion. The Matupá project, developed by Aura Minerals, is ranked third with an initial CAPEX of US$107 million. It is followed by the la India project, developed by Condor Gold in Nicaragua, with an initial CAPEX of US$105 million.