Mexico gold miners deliver output surge

The largest gold miners in Mexico delivered a surge in output in this year’s first quarter.

The dominant three – Fresnillo, Newmont and Torex Gold – produced an aggregate 535,702oz of the yellow metal, up 27.1% from 421,500oz in the first quarter of 2020, according to figures compiled by BNamericas.

The rise, which was mainly due to higher grades, came in a mixed quarter for Mexico-focused gold miners, with five of 11 significant producers posting lower output.

Combined production by the 11 was 809,735oz, up 14.3% from 708,528oz in 1Q20.

The data show Mexico’s biggest miners have bounced back strongly from the COVID-19 suspensions in April-May 2020, and are performing well despite ongoing pandemic-related restrictions, including social distancing measures, which have limited the number of onsite personnel.

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TOP MEXICO GOLD MINERS

1. Fresnillo, Q1 gold production: 228,193oz

Mexican miner Fresnillo saw output rise 15.9% from 196,963oz in 1Q20, due to higher grades at the Herradura and Saucito mines, which was partially offset by lower grades at Noche Buena, which is approaching planned closure.

The company, a subsidiary of Industrias Peñoles, is tracking ahead of 2021 guidance of 675,000-725,000oz gold

2. Newmont, Mexico output: 178,000oz

Newmont’s Peñasquito mine produced 178,000oz gold in Q1, up 53.4% from 116,000oz, due to higher grades and throughput.

The result puts the Zacatecas state asset in a good position to meet or beat guidance, with Newmont forecasting around 660,000oz gold in 2021 from the mine in a strong year of operations.

3. Torex Gold: 129,509oz

Like Newmont, Torex had a very strong showing in Q1, with output rising 19.3% from 108,537oz, on higher grades at the El Limón-Guajes mine.

The result - Torex’ best ever first quarter performance - puts the company in line to exceed the upper end of 2021 guidance of 430,000-470,000oz gold.

OTHER FIRMS WITH HIGHER OUTPUT  

Argonaut Gold, which ranked fifth in the list, produced 45,137oz gold at its Mexican operations, up from 39,619oz, with gains at both the El Castillo and La Colorada assets.

Pan American Silver – the sixth biggest gold producer – generated 37,500oz gold, up from 28,200oz, largely due to higher output from the Dolores mine, which benefited from higher grades, partly offset by temporary leach constraints during the current stage of pad construction.

Equinox Gold also posted a rise in output at its Los Filos mine, with further increases expected as the year progresses.

Los Filos produced 29,477oz in Q1, earning Equinox an eighth spot in the list.

Output of 9,617oz in the same quarter last year reflects a partial quarter of operations, after being acquired by Equinox in the Leagold Mining acquisition which closed on March 10, 2020.

Equinox expects Los Filos to produce 170,000-190,000oz gold this year, with output heavily weighted to H2.

Production in Q1 was reduced as operations ramped up in January following a community blockade, which was lifted in late December.

Equinox’ Mexican output will also be boosted by the addition of the Mercedes mine, which it acquired in the takeover of Premier Gold Mines in April, and which is expected to produce 30,000-35,000oz gold this year.

FALLING OUTPUT

Five of the 11 companies saw gold production slip in Q1.

Agnico Eagle Mines - the fourth biggest producer - reported output of 50,460oz gold in Mexico, down from 74,420oz.

The fall was due to lower grades at the Pinos Altos (pictured) and La India mines and the transition to residual leaching at Creston Mascota after resources were depleted.

Alamos Gold produced 35,600oz gold at its Mulatos mine, which placed the company seventh.

Mexico output was down from 43,300oz in part due to lower grades at Mulatos, coupled with the closure of the El Chanate mine.

Ninth-placed Coeur Mining produced 28,605oz gold at Palmarejo in Mexico, down from 31,578oz on lower grades.

First Majestic Silver, number 10 in the list, produced 23,873oz, down from 32,202oz, on lower production at the San Dimas and Santa Elena mines, while 11th placed Minera Frisco saw output dip to 23,411oz from 28,092oz, on lower grades and throughput at the San Felipe and El Coronel mines.

OUTLOOK

Mexico’s gold miners made a strong start to the year and are well placed to deliver on growth forecasts.

Production of 809,735oz puts the 11 companies on track to meet or exceed BNamericas’ forecasts of 3.17Moz for 2021 – a figure based on guidance and estimates for a larger pool of 19 companies.