Mining Companies Cut Budgets for 2022

Major mining companies have announced a reduction in their 2021 and 2022 budget due to COVID-19 restrictions, delay issues, and technical problems. In addition, a new fund created between Grupo México and the government will grant pensions to affected workers. Minera Cuzcatlán’s MIA permit has expired, and it does not appear authorities will approve its extension anytime soon.

Here is the week in mining!

Mining Companies Cut Budgets

Sierra Metals, Torex Gold, Pan American Silver and Coeur Mining have reduced their budgets for the following year by more than US$60 million due to COVID-19 restrictions, technical problems and project delays. Meanwhile, other companies such as Newmont and Southern Copper have not announced a cut in their budget for 2022 but have changed their investment projections for this year. 

Creation of a New Pension Fund for Cananea Miners

The Mexican government and Grupo México have reached an agreement to create a fund totaling MX$600 million (US$28.7 million) to benefit approximately 1,000 mining workers who were previously excluded from retirement, now they can receive a monthly pension for 10 years, starting in 2022. "This is an act of justice. We are going to start in January. We are also going to give continuity to the improvement of health services in Cananea," said President López Obrador.

Minera Cuzcaltán’s San Jose Mine At Risk of Closure

The San José Mine of Minera Cuzcatlán, a subsidiary of Fortuna Silver, is at risk of being closed after its environmental permit expired last month and it does not appear that the government will approve its extension anytime soon. Currently, the mine can continue to operate due to a court order. However, the permit is only temporary, for which its future remains uncertain.

Camino Rojo is 96 Percent Complete

Orla Mining announced that construction of its Camino Rojo Oxide Project is on schedule and 96 percent complete. The main activities carried out during 3Q21 included the mechanical completion of the crushing system, transportation system, recovery tunnel, among others. Additionally, the company announced that it continues to analyze multiple development scenarios for its Camino Rojo Sulphide Project.  

Guanajuato Silver Announces New Financial Arrangements

Guanajuato Silver announced that it will make an advance US$ 25 million payment of the promissory note issued to Endeavor Silver, which is related to the acquisition of the El Cubo mine and mill complex that expires in April 2022. In addition, the company announced it has entered into a non-brokered private placement offering of 15,000,000 units, which will cost US$0.55 per unit.