Canadian miners looking to expand ops in Mexico

At least four Canadian mining companies have made announcements in the past few days confirming their intention to continue growing in Mexico while seeking to generate investor confidence.

Gatos Silver updated the mineral reserves for its Cerro Los Gatos mine in Chihuahua state, extending the mine life; Fortuna Silver Mines discovered a new, high-potential vein at its San José mine in Oaxaca state; Chesapeake Gold provided a metallurgical and mineralogical update for its Metates gold-silver project in Durango state; and Sierra Madre said it plans to restart production at the Guitarra mine in Mexico state within 20-22 months. 

Armando Alatorre, an independent mining geologist and sector expert, told BNamericas that these announcements are part of the normal exploration process and can happen in any mining project.

However, it is striking that the updates were issued when the industry is concerned about delays in obtaining environmental permits, such as environment impact statements (EIS) from the environment ministry (Semarnat) and authorization for changes of land use under the new mining law.

“They announce the updates, which are very normal, to tell their investors that they will continue producing in the future,” Alatorre added. 

“Some mining companies are announcing new reserves or deposits that are already explored and studied. This creates confidence in them among their investors and also tells the banks and the general public that they’re still operating and can continue producing for a certain period,” Raúl García Reimbert, president of the college of mining engineers, metallurgists and geologists (CIMMGM), told BNamericas. 

“That is the message, what is perceived, and the perception of business is very important. There are resources, there are reserves and there are operations with the current concessions,” he added. 

Regarding the delay in permitting, García Reimbert said these procedures could be streamlined because he perceives there is a certain openness to improve the situation on the part of the government. In some cases, there may be extensions to the EIS, while in other cases a fresh EIS could be made under the new regulations in force.

“When there is willingness of the parties, that’s happening …. What I do think is difficult now is for [the authorities] to give permission or approve open pit mines, which we hope is not the case,” the CIMMGM president added. 

1. Gatos Silver

Mexico-focused Gatos Silver announced a 2.75-year mine-life extension for its Cerro Los Gatos (CLG) unit to the end of 2030, with a 46% increase in total silver production, adding that there are significant opportunities for further optimization and growth. 

“We have achieved significant life extension objectives with this updated mineral reserve estimate, exceeding our target of adding one or two years,” CEO Dale Andres said. 

“We continue to believe there remains substantial additional value at CLG and we are now analyzing a number of projects with the potential to further improve margins and mine life as we move forward,” he added. 

The CEO said that in the near term, the Los Gatos joint venture that owns CLG, in which Gatos Silver has a 70% interest, is continuing to define the southeast deeps area and ramp up exploration efforts in the Los Gatos district with the mobilization of a seventh surface drill rig in September. 

2. Fortuna Silver

Vancouver-based Fortuna Silver announced the discovery of the Yessi vein, a new blind mineralized structure, at its San José mine (pictured). In 2022, San José produced 5.76Moz of silver, according to Mexican mining chamber Camimex.

“Drilling by the mine geology team recognized a new blind zone of alteration and brecciation, resulting in the intersection of 1,299g/t Ag Eq over 9.9m in drill hole SJOM-1387, and 621g/t Ag Eq over 5m in drill hole SJOM-1391. This new zone has been named the Yessi vein,” Paul Weedon, senior VP of exploration, said in a statement.

“Extension drilling intersected the Yessi vein approximately 200m further east of the Victoria mineralized zone, highlighting the potential size and strength of San José’s mineralized system,” Weedon added.

The recent discovery of the Yessi vein "is news that promises to change the panorama of silver mining in Mexico and, possibly, in the world," specialized portal Minería en Línea reported.

“With high silver equivalent grades, this discovery is not only promising for the company but also for the mining industry and the country's economy,” the portal added. 

3. Chesapeake Gold

Chesapeake Gold issued a metallurgical and mineralogical update to determine the economic viability of its US$359mn Metates gold-silver project as a heap leach mine operation and said it expects to be ready to prepare the prefeasibility study early next year.

“We are very encouraged with the latest results from this phase of metallurgical testwork. A systematic, methodological approach individually testing several parameters under different conditions is being undertaken in 42 columns,” CEO Alan Pangbourne said in a statement.

“The results have identified certain parameters that provide the conditions where the leach technology oxidizes mineralization at a faster rate than our previous testwork. Under these conditions, we believe the targeted oxidation curve will be achieved and provide the foundation for preparing the prefeasibility study early next year,” Pangbourne added. 

Chesapeake will continue to advance the metallurgical program and once sufficient metallurgical work is available, Chesapeake management “plans to commence a prefeasibility study to further de-risk Metates and advance the project toward our goal of developing one of America’s largest gold and silver deposits.”

Camimex estimates that Metates will contribute 91,000oz/y gold and 9,000oz/y silver from 2025.

4. Sierra Madre

Finally, Mexico-focused Sierra Madre provided an in-depth update of its activities at the 100%-owned past-producing La Guitarra silver-gold mine complex and announced its intention to restart production within 20-22 months.

“We are very pleased with the progress at La Guitarra since the March 2023 closing of the acquisition from First Majestic Silver. Work towards a new resource estimate in accordance with NI 43-101 is underway, concurrent with evaluating historic cost data that would feed into a mine restart study,” executive chairman and COO Gregory Liller said in a recent statement.

"On the ground, we are focused on preparing the mine, plant, and equipment for a prompt restart,” he added. 

Sierra Madre’s objectives are to complete a new resource estimate by year-end, followed by a mine restart study, which would include a cost study, a mine plan and a reserve estimate. Underground and plant rehabilitation, as well as a rebuild and refurbishment program of mine and plant equipment, have also begun, the statement added.

“The company anticipates that, given adequate funding and assuming project execution tracks internal projections, the restart of production at La Guitarra could be feasible within 20-22 months,” Sierra Madre said.