José Antonio Berlanga
CEO and Director
Telson Mining Corporation
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View from the Top

Rethinking Concepts and Processes

Wed, 10/16/2019 - 18:22

Q: Telson has survived downcycles partly by reducing costs. What has proven to be your most successful strategy?
A: As the mining business is subject to commodity prices, we are always working toward having competitive costs. In Campo Morado’s case, we made significant changes in our mine strategies. To start, the previous operator was only exploiting the mine’s zinc deposit, while we are focused on all the metals present: zinc, copper, lead, gold and silver. We started exploiting each mineral body separately, which was the equivalent of having three different mines. But as we unified the exploitation of mineral bodies and operated in one location, we were able to reduce personnel and produce more with less. We increased mineral recovery and ramped up productivity around 35 to 40 percent in the three months that it took to implement this model.
During this process of change and innovation, we learned that it is crucial to modify our approach when it is restrictive and flawed. When we do things differently, we achieve better results. Changing our approach has always proved to be the best way to cut costs. For example, our operating cost is around 40 percent lower than that of the previous operator and we are working to lower it even more.
Q: What is your approach for Campo Morado?
A: Zinc is the main income stream for Campo Morado. But we are analyzing the Albion process with Glencore to increase our gold and silver recovery. Today, we recover between 30 to 35 percent of the contained gold and silver but the mine has more than 300,000 gold ounces that we would like to exploit. To achieve this goal, we need to carry out fine grinding and to leach. We have done this before but now we are promoting the use of more efficient equipment, such as that owned by Glencore. We think that the Albion processing can increase our gold and silver recoveries from the current 35 percent to more than 85 percent. Also, as we leach gold and silver, we will also treat the contained copper. While this will imply a higher cyanide volume, we will also sell this copper and so we will be able to recycle the used cyanide. We want to install a 1,000 t/d leach circuit to process tailings to start operating in 2020. This would imply that by the same year we will turn Campo Morado into a gold and silver mine.
Q: Your guidance for Tahuehueto was to start production by 4Q18 at a rate of 1,000t/d. What is the state of the project?
A: In the case of Tahuehueto, the recovery levels and ore grades are optimum but we are processing the mineral in a rented plant that does not have all the specifications that we need. As a result, we are now building our own plant at the mine with financing from Trafigura, our internal financing and the cash flow from the mine, which is producing 5,000 tons per month. We expect to start processing around 1,000 t/d at our own plant by 3Q19. We will start with portable milling equipment to begin production before completing construction.
Q: How are you rethinking your communitarian communication processes to enhance your relationship with locals?
A: Community relations are at the crux of mine operations worldwide. I am certain that any issues that arise are founded in a lack of direct contact with the community. At Telson, we make sure to address this directly as I am the one in charge of overseeing social matters. While we do have the support of some social and environmental consultancies, I prefer to answer the community’s questions and doubts in person and explain what exactly we do and what impact we will have on their surroundings. I meet around once a month with the communities in Guerrero and Durango.