Zacatecas Silver headed for Mexico permit showdown

Zacatecas Silver is headed for a permitting showdown at its recently acquired Esperanza gold project in Mexico, which environment ministry Semarnat pledged to block.

The Vancouver-based junior is pushing ahead with plans to submit an environmental permit application for the Morelos state asset by end-2022 despite criticism from Semarnat, which said the open pit project is a threat to local communities, ecosystems and water resources.

The ministry also reaffirmed the government’s commitment to block new authorizations for open pit mines, following the “high quantity” of permits granted under previous administrations.

But Zacatecas Silver CEO Bryan Slusarchuk defended Esperanza, which the company acquired last month from Alamos Gold in a deal worth up to US$60mn, saying the project will be developed in an environmentally and socially responsible way.

“The Esperanza project has strong support from the local community, which was strengthened through extensive stakeholder engagement carried out by Alamos,” Slusarchuk told BNamericas in an emailed statement.

“We plan to continue to move the project forward and are targeting an EIA [environmental impact assessment] for submission by end-2022.”

BEST PRACTICES

Following the Semarnat criticism, the CEO defended the company’s track record, saying the team has a history of promoting safe and sustainable operations under best practices in terms of health, safety, the environment and community, at a number of mining projects globally.

While Semarnat has said it will halt Esperanza – and other open pit projects – the final decision will rest on the merits of the permit application, he added.

“Ultimately, the environmental impact of the project will be determined through the EIA procedure established by Mexican mining law.”

WATER CONCERNS

In its press release, Semarnat said mining demands large volumes of water, and that the Esperanza project could lead to local water shortages.

But Slusarchuk said the project will not compete with any nearby communities for water supply, and its owners have helped guarantee residents’ access to water, including during the COVID-19 pandemic.

“While we believe that the community benefit of the project in terms of much needed job creation and sustainable economic benefits will be significant, the advancement of this project will also give us a platform to work with local stakeholders to make improvements to current water distribution and availability,” he added.

“In terms of water, the project is envisioned to be a net benefit to the community.”

COMMUNITY SUPPORT

Community support initiatives at Esperanza have been ongoing for some time, focused on sustainable agriculture, education, health and water projects, Slusarchuk said.

Despite the work, the project has generated opposition, with some residents and NGOs in the Cuentepec settlement in Temixco municipality, near the Esperanza project, announcing a decree last month to ban mining in territories that Nahua indigenous communities have traditionally occupied.

But the community projects are bearing fruit and are expected to continue to grow as the project advances, said Slusarchuk.

“Permitting for Esperanza will follow all government procedures and regulation and we will welcome interaction with all levels of government,” he added.

“The strong community support for the project now in place and gaining momentum will only assist with this process.”

POSITIVE OUTLOOK

Semarnat’s pledge to block open pit projects will cause some jitters, with sector leaders already warning of a government-led “attack” on the industry, amid a crackdown on permits and concessions and a new law restricting lithium mining to the State.

On the permitting front, a string of open pit projects have been blocked at the environmental stage since President Andrés Manuel López Obrador took office in December 2018, while last week saw Semarnat suspend US-based Vulcan Materials’ SAC TUN limestone quarrying operations in Quintana Roo state following an inspection, citing damage to ecosystems, which the company denies.

Despite the challenges, Slusarchuk remains optimistic.

“We are positive about the long-term outlook of the mining industry in Mexico as evidenced by our acquisition of the Esperanza project,” he said.

A 2011 preliminary economic assessment for the project by former owners Esperanza Resources showed average production of 103,000oz/y gold.