Image credits: Orla Mining
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News Article

Zacatecas’ Top Three Mining Projects for 2021

By Paloma Duran | Wed, 12/30/2020 - 10:15

Next year, three mining projects in Zacatecas are expected to be among the main projects of the country. Two of these projects are owned by Canadian companies: Camino Rojo from Orla Mining and Pinos Distric from Candelaria Mining. Meanwhile, the Juanicipio project is from the Mexican company Fresnillo.

Zacatecas is considered one of the most important mining states in Mexico. Last year, it produced 10.6 percent of the gold in the country, which positioned Zacatecas as the fifth gold-producing state. In the silver category, it obtained the first place with 33.4 percent of the national production. Regarding copper, the state ranked second with 6 percent of the total production, according to CAMIMEX.

According to La Jornada, the three mining projects have benefited from an increase in international prices of precious metals. Moreover, gold and silver mining are growing despite the COVID-19 pandemic crisis. Rubén Del Pozo, President of Zacatecas District, told MBN the pandemic has taught Mexico to guarantee the operation of the mining sector even in times of crisis. He emphasized several opportunities can be found in technology, partnerships, creativity and personal skills, which could drive the success of projects that seek to generate leaner operations, optimize costs and ensure work continuity.

Orla Mining’s Camino Rojo project in Zacatecas hosts 9.46Moz of gold in the M&I categories and 1.70Moz in the Inferred category. The company plans to begin production by the end of 2021, producing 1.70Moz of gold per year from oxide resources, reported MBN.

On Aug. 11, the Ministry of Environment and Natural Resources (SEMARNAT) authorized the Environmental Permit Application (MIA) submitted by the mining company in 2019 (SGPA/DGIRA/DG/03478), which is essential to start operations.

During an interview with MBN, Jason Simpson, President & CEO of Orla Mining, explained why the company chose the Zacatecas project. “We are building a mining company with assets in various countries and we selected Mexico for several reasons. Our team has a history of success in Mexico: it believes in the country as a mining jurisdiction. Camino Rojo is a strong project and it is located in Zacatecas, a state that understands and supports mining,” he said.

Last week, Orla announced that the company has completed the Layback Agreement with Fresnillo Plc and is currently waiting the approval of the Federal Competition Commission (COFECE). The company explained that under the terms of the agreement, Fresnillo will allow Orla to expand the Camino Rojo oxide pit within Fresnillo’s mineral concession for US$62.8 million.

The second project is the Pinos District, which is owned by Candelaria Mining Corp. The company has 3,800ha of Pinos’ mining concessions, which include 17km of veins containing gold and silver. The project hosts 25,029oz gold and 496,637oz silver in the M&I categories and 60,671oz of gold and 811,082oz of silver in the Inferred category. Candelaria Mining said the project has an estimated production of 12,700oz gold equivalent scheduled to begin in 1Q21 with a competitive all-in sustaining cost of US$835/oz.

Ramón Pérez, President and Director of Candelaria Mining, told MBN the Pinos project is fully permitted and ready to go into production. The company has drilled out an initial resource and have filed a robust Preliminary Economic Assessment (PEA). In addition, Perez said the project has a great support from the local, municipal, state and federal governments.

On Jun. 24, Candelaria reported it had closed a US$9 million medium term loan facility with Accendo Banco, which will be used for financing the construction of the Pinos project. In November, the company Empress Royalty announced it completed its first near-term cash producing investment with the NSR royalty on Candelaria’s Pinos project. Candelaria said that these investments will be used to start operations in the Pinos District.

The last project is Juanicipio, which is 56 percent owned by Fresnillo and 44 percent by MAG Silver. The deposit is located in the Fresnillo District and is being constructed, developed and operated by Fresnillo. It consists of two main vein systems: the Valdecañas vein system and the Juanicipio vein, which are significant silver-gold epithermal structures. Juanicipio is expected to produce 11.7Moz of silver and 43,500oz of gold annually over an initial operational life of 12 years, reported Fresnillo.

In February, Fresnillo announced that in mid-2020, the underground mine will start to process 16,000 tons a month of development ore through the Fresnillo beneficiation plant. Additionally, the construction of the Juanicipio beneficiation plant was extended by six months and is now expected to be commissioned by mid-2021. According to a press release, Juanicipio is expected to reach 85 percent name plate capacity in 4Q21 and 90-95 percent in 2022.

In an interview with MBN, Thomas Eckert, Director of Government and Corporate Affairs at  MAG Silver, said the Juanicipio project is coming along well and there is a lot of positivity around its development. Eckert added the company has a close relationship with Fresnillo to support it in the development of the project. Octavio Alvídrez, CEO of Fresnillo, told MBN the company expects a good price level in 2021, when Juanicipio will be in full production. Alvídrez said it is an excellent project with higher silver grade, wide veins, low costs and a good potential to expand the project’s reach and lifespan.

 

The data used in this article was sourced from:  
MBN, Orla Mining, Proactive, Fresnillo, La Jornada, CAMIMEX
Photo by:   Orla Mining
Paloma Duran Paloma Duran Junior Journalist and Industry Analyst