Optimization to Prepare for New UpturnWed, 10/19/2016 - 00:11
Q: What are the main drivers behind your current projects in Mexico and how do you see them strengthening your growth portfolio?
A: Pan American Silver is fully committed to business in Mexico. The country is investor friendly, straightforward for business and regulatory purposes, and extremely receptive to what we are trying to achieve through our investments in country, which leads to growth for our company and most importantly for the shareholders' return value. Growth for the company in Mexico also stimulates the development of the surrounding communities and the people that work and live in the areas in which we operate. Ultimately, investment in Mexico benefits all parties concerned, including the Mexican government and the Mexican people as a whole.
Q: Despite the unfavorable market conditions, what have been the highlights for Pan American Silver in 2015?
A: Of our three operations, two are currently undergoing extensive expansion work. At La Colorada mine in Zacatecas, the company has invested in a new shaft and a new plant with associated underground development infrastructure, which equates to an investment of US$130 million and will increase the mine’s expected minimum lifespan to at least 15 years. The plant is already 50 percent complete and the shaft work is 85-90 percent complete, and both are due to come online in September 2016. Likewise, the company plans to invest US$200 million on expansion work at the Dolores mine over the next two years. The funds will be invested in a new mine development by way of an underground ramp to facilitate the beginnings of an underground mining operation to work in tandem with the existing open pit and a new pulp agglomeration plant at the mine site. The ramp progress is already at the one year advanced stage and the plant works will soon begin. The Alamo Dorado mine, our third operation in Sonora, is already at steady state of production and will continue to operate in this capacity.
Q: What current activity is there in the La Virginia and La Bolsa projects?
A: It is important to remember that our main objective in terms of metals lies in silver as per our company name, and although we do not mind mining other metals like gold, zinc, lead, and copper, finding those substances is not our primary goal. The La Virginia and La Bolsa projects are primarily gold projects, so they do not fit into the Pan American Silver portfolio. Nevertheless, these projects have already been drilled, and going forward consideration will be given to how they fit into the Pan American Silver portfolio, especially when metal prices rebound.
Q: What success stories have you had in transferring practices from the US or Canada into Mexico or vice versa?
A: Pan American Silver has seven running operations, and each mine is unique so what works in one mine will not necessarily work in another. Nonetheless, an accident in one operation will be shared across all sites regardless of the circumstances in order to ensure that repetition of such an error or oversight is avoided in the future. Our mine operations in Mexico have won several Casco de Plata awards, which is the highest safety award a mine in Mexico can receive. We are careful not to cut corners on that front, and we try to give the workers the most productive platform to work from. It is essential to be aligned with the communities’ environmental concerns and carry out our responsibilities as operators. We reforest and replant as we progress, and as far as I know, we have never had one incident of non-compliance during any previous inspection. We will always continue to do the right thing to minimize the impact on the ecosystems surrounding our operations.