Mexico’s Development Pipeline On-Track Despite PandemicBy Alejandro Ehrenberg | Fri, 04/24/2020 - 13:13
During the past weeks, the Mexican mining industry has struggled to make government authorities understand that it is an essential component of Mexico’s economy and should be allowed to continue working amid the COVID-19 outbreak. Nevertheless, the government has not been receptive to arguments centered on the fact that mining is the sine qua non of other industries that have been defined as essential, including the health industry. A number of mining companies developing assets in Mexico have opted not to wait for the debate to conclude and, in the interest of safety, have temporarily ramped down operations. Below is an overview of the current state of some of the most significant development projects in Mexico.
Situated in northwestern Durango, Tahuehueto is a gold, silver, lead and zinc project developed by Telson Mining. The company points out that “Tahuehueto is under construction, having advanced to approximately 70 percent completion and waiting for final funding to finish construction of the processing plant and related assets.” Telson Mining has recently reached a promising agreement for moving Tahuehueto forward. As the company’s CEO, Ralph Shearing, said to Proactive Investors, “Trafigura has allowed Telson to defer interests and principal payments until June 30, 2021. The additional time will allow Telson to achieve funding and finish construction of Tahuehueto.” Nevertheless, operations at Telson Mining’s other asset, Campo Morado, in Guerrero, have “begun the process of winding down” due to the COVID-19 outbreak.
Orla Ming’s Camino Rojo lies 50km south of Newmont’s Peñasquito, in Zacatecas. The company’s feasibility study considers Camino Rojo as a possible “open pit mining of 44 million tons of oxide and transitional ore grading 0.73g/t gold and 14.2g/t silver at a throughput rate of 18,000 tons per day.” The project is on track despite the COVID-19 contingency. Orla Mining declared that “nearly all activities are continuing remotely, as planned, including detailed engineering, procurement and other functions that can continue to operate safely with distancing. Site activities are expected to resume when approved and safe to do so, including the start of construction as planned early in the second half of 2020.” In fact, as reported by the Canadian Mining Journal, Orla Mining has recently completed two deals that further guarantee Camino Rojo: “On March 26, the company unveiled a US$75 million bought deal financing. Newmont and Agnico Eagle Mines said they intend to subscribe for enough shares to maintain their current ownership positions and Orla has also received a commitment from mine financier Pierre Lassonde.”
Owned by SilverCrest Metals, Las Chispas is a high-grade silver and gold project that is poised to do remarkably well in a precious metals bull market (1) (2). The company has declared that “in collaboration with government agencies, ongoing exploration and underground development work at Las Chispas will be temporarily suspended at least until April 30, 2020 to limit potential exposure of personnel and nearby communities to the virus.” Nevertheless, development at Las Chispas is expected to resume once sanitary conditions become adequate. SilverCrest Metals has recently announced a series of financial landmarks for guaranteeing success at Las Chispas (1) (2) (3).
Located in the Fresnillo Silver Trend, Juanicipio is a joint venture between MAG Silver (44 percent) and Fresnillo plc (56 percent). As reported in MAG Silver’s website “Fresnillo plc is currently constructing and developing the surface and underground infrastructure on the property to support a 4,000 ton per day mining operation.” However, given the sanitary contingency, “surface exploration and construction work has been temporarily stopped, and the underground operation has been temporarily reduced to a minimum working level under rigid hygienic protocols.” Fresnillo plc has noted that “the Juanicipio plant is now expected to ramp up to 85 percent in 2021.”