Spotlight: 7 Mexican silver projects due online by 2025 set to add more than 17Moz/y

Seven silver projects involving investment of US$1.65bn this year and next are expected to add around 17Moz annually to Mexico's output, according to mining chamber Camimex.

According to statistics bureau Inegi, Mexico’s silver production fell 14.7% in 2023 to 181.9Moz. The country is the world's largest producer of the precious metal.

PROJECTS

Camimex expects the Tahuehueto project of Canada's Luca Mining, the EC120 expansion of Americas Gold and Silver, Terronera belonging to Endeavour Silver and Torex's Media Luna will start operations this year. The operations would add 7.6Moz/y of silver, according to BNamericas estimates.

Last week, Luca (formerly Altaley Mining) announced that it completed construction of its US$30mn Tahuehueto gold mine in Durango state.

Tahuehueto is an underground operation with 1,000t/d nameplate processing capacity. The mine was completed within budget and has been successfully producing on a pre-production basis for several months.

“Processing rates are currently averaging 450t/d and we expect to steadily increase over the coming weeks to reach commercial production in September 2024. Tahuehueto is set to become the second cornerstone asset at Luca. We are ultimately targeting at least 50,000oz AuEq annual production from this mine,” CEO Dan Barnholden said in a statement.

Americas Gold and Silver's EC120 project in Sinaloa state combines the El Cajón and Zona 120 silver and copper deposits at its Cosalá operation.

The company plans to accelerate development at the deposits and begin commercial production of silver and copper concentrates in 4Q24, according to the Camimex annual report. Investment is put at US$24.9m and according to the preliminary feasibility study, annual production of 2.5Moz silver and 2,041t copper is expected over a 5-year lifespan.

Vancouver-based Endeavour’s US$271mn Terronera underground silver and gold mine in Jalisco state reached 64.5% completion as of end-June, up from 50% at end-March.

More than US$204mn of the project's budget has been spent to date. Project commitments total US$260mn, 96% of the total capital budget, the company stated in a release.

The Canadian miner said that progress on surface construction has reached 77% and the Terronera project remains on track for commissioning in 4Q24.

As of end-June, Mexico-focused Torex Gold’s Media Luna underground project in Guerrero state had reached nearly 80% completion, up from almost 70% at end-March, the Toronto-based company said in a release.

“As a result of near completion of engineering and procurement activities and incorporating the strength of the Mexican peso, budgeted capital expenditures have been finalized at US$950mn. This represents a US$75.5mn increase (+8.6%) over the original budget of US$874.5mn,” the company said.

2025

In 2025, Camimex expects three silver projects to start operations: Sierra Madre’s La Guitarra reactivation and Los Ricos North and Los Ricos South owned by GoGold Resources, adding more than 9.5Moz per year. 

Sierra Madre Gold and Silver announced the first shipments of silver and gold concentrates from La Guitarra in Mexico state. On July 25, the company shipped 90.68 dry metric tons (DMT) containing approximately 3,000g of silver and 30g of gold per DMT. The company has approximately 90 DMT of additional concentrate expected to be shipped later this week.

Sierra Madre will continue ramping up production to reach 500t/d throughput for approximately 350DMT of silver and gold concentrate production per month by year-end.

According to Camimex data, the planned investment is US$4.6mn.

GoGold Resources, based in Halifax, Nova Scotia, operates the Parral tailings mine in Chihuahua and the US$148mn Los Ricos South and the US$221mn Los Ricos North exploration projects in Jalisco state.

“We are advancing our definitive feasibility study at Los Ricos South, and anticipate a press release on the results of the study in early September. The definitive feasibility study has a focus towards a larger underground mine with a much smaller open pit. We have applied for an underground permit as in our view this will be more likely to be obtained on a timely basis,” CEO Brad Langille said in a release earlier this month. 

At Los Ricos South, GoGold intends to focus on technical studies, including a feasibility report, and advance the permitting process to make a construction decision. Los Ricos North’s prefeasibility study and engineering reports will follow after Los Ricos South, the company says.

CONTEXT

President Andrés Manuel López Obrador's administration, which started in 2018 and will end on October 1, has not approved any new mining concessions and permitting delays have also affected ongoing developments.

The sector has been impacted by the uncertainty generated by the mining reform in May 2023, which, among other changes, gave geological service SGM exclusive exploration rights.

A lack of regulations for the four amended laws that apply to the sector is holding back projects, especially those linked to exploration.