Nicaragua on track for gold mining boom

Nicaragua is shaping up for a gold mining boom, with companies pushing ahead with projects delivering more than 300,000oz/y in the coming years.

The growth aims – spread across four producers and explorers – comes amid widespread praise for the country as a positive jurisdiction for mining, and against a backdrop of higher prices.

Gold is trading around US$1,900/oz after hitting all-time highs of over US$2,000/oz in August, up from around US$1,200/oz in October 2018.

Combined output growth offered by the projects, of around 312,500oz/y, will almost double Nicaragua's gold output.

Exports of the yellow metal were 8,860kg (285,000oz) in January-September, according to latest figures from export regulator Cetrex – up from 8,368kg in the same period last year.

NICARAGUA – KEY STRENGTHS

While Nicaragua has yet to win broad recognition as a mining-friendly jurisdiction, companies operating in the country have been quick to offer praise.

Key strengths include a supportive government and communities and skilled labor.

“We’ve been pleasantly surprised with how supportive the ministry of mines, the federal and local governments, and the local communities have been of us restarting the historical San Albino mine,” Mako Mining CEO Akiba Leisman told BNamericas in September.

“We have also been pleasantly surprised by the depth of expertise in the country.”

Relative safety – with few reported problems with organized criminal cartels – and an efficient regulatory framework are other reported pluses.

“There is rule of law, and order. You have a government that is welcoming of investment, job creation,” Calibre Mining CEO Russell Ball said in an interview in January.

“You have a mineral endowment that is under-explored and you have this legacy DNA mining culture. That doesn’t happen in too many places in the world.”

GROWTH OPPORTUNITIES

La India

Production aim: 170,000oz/y

Condor Gold plans to begin production at its La India project in 24 months before delivering an underground expansion.

The company has secured permits for an open pit operation producing 120,000oz/y gold over seven years, CEO Mark Child told the TSX Latam Mining Investor Day.

“We can materially expand that production to 170,000oz/y by adding the underground [operation]. The intention is to do that when we are in production,” Child told the online event.

Condor is currently focused on getting the project shovel-ready, with site clearance due to start this year, and buying land for the permitted mine infrastructure, which is about 93% complete.

Engineering for a tailings storage facility is also advancing and about 45% complete, the CEO said, with further exploration also planned.

El Limón, La Libertad

Production increase: 62,500oz

Calibre expects to grow production from its Nicaraguan assets as it utilizes spare mill capacity at the La Libertad mine by hauling material from deposits around 250km away.

This will begin with the recently permitted Pavon Norte open pit project, which is expected to start production in 1Q21, VP, corporate development and investor relations Ryan King told the Precious Metals Summit Beaver Creek conference in September.

The company also has a 700,000oz inferred resource at the Eastern Borosi project.

Calibre expects La Libertad to produce 120,000oz/y gold for the next three years, with an additional 50,000-70,000oz/y from the El Limón mine over 10 years.

This is 62,500oz higher than the 110,000-125,000oz total guidance for 2020, based on midpoint figures.

The 2020 forecast has been revised down from 140,000-150,000oz due to COVID-19 disruptions.

San Albino

Initial production: 40,000-50,000oz/y

Mako is aiming for its first gold pour at San Albino in January 2021, with the high-grade open pit project expected to produce 40,000-50,000/y once in commercial operation, expected in April or May, Leisman told BNamericas in September.

The focus will then shift to exploring and developing the nearby Las Conchitas deposit, which could become a second mining area and help double processing levels to 1,000t/d, possibly within two years, the CEO added.

Mako also has the Potrerillos concession to the north of San Albino, which is on strike and with the same mineralization.

Hemco Nicaragua

Production increase: 30,000oz/y

Colombian miner Mineros plans to increase production at its Hemco Nicaragua subsidiary, which operates in the Bonanza mining district.

The operation mills ore produced by the company and by artisanal miners. About 70% is currently supplied by artisanal producers.

“Last year Nicaragua [operations] came close to producing 130,000oz, but with two new fronts we are working on, Pioneer and Porvenir, we expect to increase annual production to around 160,000oz and change the mix to 50% owned, 50% artisanal,” CEO Andrés Restrepo told the TSX event in a video presentation.

In addition to allowing artisanal miners to work on at least 1% of its concessions – which is required by law – Mineros offers safety and best practice training to artisanal miners, while helping them secure accident insurance, Restrepo added.