Carlos Silva
CEO
Santacruz Silver
/
View from the Top

Zimapan Acquisition Establishes a New Era for Santacruz Silver

By Paloma Duran | Mon, 08/09/2021 - 18:01

Q: What is the significance of adding the Zimapan project to the company's portfolio?

A: Zimapan has great potential. The mine is located in a 500-year-old historic mining district, so geologically it is an excellent opportunity. In addition, Zimapan’s production can reach 3,200tpd; we are producing 2,600tpd and we hope to increase that organically. The mine is very important because in addition to the opportunities, it has strengthened us and is aligned with our plans to grow the company.

Q: How is the company progressing with its goal of recovering the mine's historical production levels?

A: I worked at the mine as an independent for 10 years. We saw the potential of the mine during that time but we did not invest until it became a Santacruz asset. We are aiming to return to historical production levels, for which we are exploring and developing the project and preparing new plans. Its maximum production is expected to be 75,000 tons. We already have the financial resources to achieve this goal. We believe that by 2H21 we will be making great strides.

Q: Why is the Lomo del Toro zone a promising mining prospect?

A: Unlike the district, Lomo del Toro is an area that has minerals horizontally. Historically, the mineral found in this zone has better grades but lower volume. This year, we have already started exploration with diamond drilling, which is in accordance with the 43-101 standard to unlock its full potential and thus prepare more stopes. The plan is to continue exploration and drilling and then work directly in the identified higher grade mineralized zones.

Q: Why is the Rosario mine an attractive asset, even though its operations are smaller than Zimapan?

A: The Rosario mine is a fundamental asset for training our employees. Some companies only hire people with a great deal of experience. We are looking to develop professionals and improve their knowledge. We have trained managers, lawyers, geologists and engineers. The Rosario mine has the challenges of a larger mine, so it provides us an opportunity to learn from those challenges. If a mistake is made, it has less impact due to the mine’s size. At the Rosario mine, everyone is learning about many subjects, such as social and environmental issues. We want to become a bigger company and Rosario is helping us train the workers we will count on in the future.

Q: Once it reaches full capacity, what are the next steps for the company?

A: We have some exploration areas with a great deal of potential that we plan to develop further. We are going to start working with the Santa Gorgonia prospect in the next few months and obtain environmental permits from SEMARNAT, which will take around 20 days. We are now doing superficial geological work. Our experts believe it will have a useful life of 60 to 70 years and provide better mineral grades.

Q: What is the new mining method being introduced at the Rosario mine and what are its advantages?

A: Previously, the drilling was vertical, require a very hard anchor. Now, we drill horizontally and our impact is less. By having better control of the exit, we have greater safety. The dilution is lower because we see the ore head-on. However, we put a greater weight on safety, which is why we made this change.

Q: How is the company considered a leading example of responsible mining?

A: We are working with the IRMA standard. We are considered the second company in the world to implement the standard and the first to publish the results. Our results were collected with total transparency and, in fact, IRMA left us tasks to improve and obtain a better rating. Likewise, we continue working with the communities through a scheme that is being adapted very well, especially in Zimapan.

We have had a great deal of success in providing medical services. We have doctors in Zimapan and Rosario who offer their services to the entire community, especially those who do not have financial means. Likewise, in alliance with the Autonomous University of Hidalgo, we have reached out to the communities and provided free consultations and medicine. We have also developed projects to address their main concerns, such as obtaining water, solar energy and internet connectivity.

Q: What are the company’s priorities regarding to safety, especially after the recent accident at the Rosario mine?

A: It is tragic when these types of accidents occur. Mining is a high-risk industry and as a result, we invest heavily in ventilation, mechanics, infrastructure and equipment to protect our people. We do not use the word safety. Instead, we say prevention because that is where we are focused the most. We have a prevention and health system, which we are constantly strengthening.

The recent accident happened in a fill phase when we changed the operating system to make it safer. However, water had weakened the rock. After the accident, I spoke with the boy's father. The man was rational about what had happened. We always want families to feel supported. Every year, a mass is held inside the mine on the day workers have died so that we do not forget them and to learn from these accidents. In addition, we grant scholarships to children who have lost a parent. We provide them with information if they want to dedicate themselves to mining and guide them throughout the process.

Q: What progress has Mexico made toward Mining 4.0 and what is needed for it be fully implemented?

A: Mexico is ready for Mining 4.0 and is close to fully implementing it. However, it lacks support. The sector constantly faces new challenges, which prevent the sector from making progress in this regard. Recently in Hidalgo, there was an ecological and urban order, which prioritized agriculture over mining. This is a step backward because the state no longer lives off this sector; it needs more mining.

Another example is when the Mining Fund was eliminated on the claims that the money had been stolen, which is not true. I was a member of the committee and observed how it was used for the benefit of the communities. The government needs to trust us. If the government believed in us, we could then achieve our goals more easily and rapidly.

Santacruz Silver is a Mexican silver company with two producing projects, Rosario and Zimapan; The corporate objective is to become a midtier silver producer.

Paloma Duran Paloma Duran Junior Journalist and Industry Analyst