Mexico’s Junior Market Stirs

The Week in Mining highlights developments in Mexico’s mining industry, where Santacruz Silver took more steps toward consolidating as mid-tier producer and Alamos Gold reported to be ready for building its next mine. Also, conditions particular to the pandemic have precious and base metals unusually rising in tandem — at least for the time being.

Mexico

Peñoles’s stocks climbed on the Mexican Stock Exchange, pushed by soaring metal prices. Fresnillo plc reported greater profitability, notwithstanding COVID-19’s impact on its operations.

Santacruz Silver has agreed to sell a property package to Zacatecas Silver. The deal will bolster Santacruz’s growth strategy, dovetailing with the company’s agreement with Peñoles to acquire the Zimapan mine.

Alamos Gold will build a new mine in Sonora starting in 2H20. The La Yaqui Grande project is expected to be low-cost and high-return.

Exploration is the mining industry’s R&D. Neglect it and the project pipeline will eventually dry out. Yet, Mexico’s tax framework is blatantly inimical to exploration.

Metals

An article in The Economist explains the factors that are pushing gold and copper prices up simultaneously. “There is, supposedly, a neat choreography to copper and gold prices. When one rises, the other tends to fall. But these are unusual times and gold and copper are moving in unusual ways,” the weekly newspaper notes. 

Silver hit a six-year high of US $23/oz. “Factors driving silver higher are gold and the interest in precious metals. There is also increased industrial demand due to the government stimulus,” explains Kitco News.

Speculators have pushed zinc prices to a six-month high, even when signs of a looming surplus are hard to ignore. “It is hard to avoid the conclusion that more metal is likely to find its way into LME warehouses over the coming weeks and months,” pointed out Andy Home in his Reuters column.