Spotlight: Mexico’s US$1bn construction-stage mining projects

Mexico-focused mining companies are rumbling toward production at construction-stage projects with combined capex of US$1.1bn, as they seek to cash in on current high metals prices.

BNamericas lists seven mining projects in construction, which will deliver more than 500,000oz/y gold and 16Moz/y silver once in full operation.

MEXICO’S CONSTRUCTION-STAGE MINING PROJECTS

1. Juanicipio, capex: US$440mn

Metals: Silver, gold

First production target: 2021

The Juanicipio project will offer a significant step-up in silver output for Fresnillo, while transitioning 44% JV partner MAG Silver to producer status.

Plant commissioning is expected by Q4, Fresnillo said in a May presentation, a few months later than previously anticipated due to delayed infrastructure contracts and pandemic-related protocols, and a brief work stoppage in 2020.

The plant is expected to reach 40-50% capacity in Q4, ramping up to 90-95% in 2022.

Development ore from Juanicipio is already being processed at the Fresnillo mine plant, production from which is expected at 1.5-2.5Moz silver.

At full tilt, the mine will produce 11.7Moz/y silver and 43,500oz/y gold, making it one of Mexico’s larger silver assets.

Fresnillo has budgeted US$226mn of capex for Juanicipio in 2021.

2. Los Filos expansion, capex: US$213mn

Metal: Gold

Project completion target: 2023

Equinox Gold’s Los Filos expansion project aims to boost the Guerrero state mine to one of Mexico’s largest gold operations.

Post-expansion production is expected at around 350,000oz/y gold, up from current levels of around 150,000-200,000oz/y.

The expansion is multi-pronged, comprising development of the Guadalupe open pit – which began production in April – and the Bermejal underground deposit, which will deliver ore from late 2021.

Bermejal underground development restarted in April, after the company updated a social collaboration agreement with a local community that had blockaded the mine.

The timing and size of a planned carbon-in-leach (CIL) plant, the third element of the expansion, and the overall project capex, will be clarified following completion of a feasibility study due around mid-year, according to the company’s Q1 MD&A report.

3. Las Chispas, capex: US$138mn

Metals: Silver, gold

First production target: 2022

SilverCrest Metals kicked off construction at Las Chispas following completion of a feasibility study in February, which outlined a US$138mn (US$164mn including sunk costs) project, producing 5.2Moz/y silver and 56,000oz/y gold.

The company is on track to complete construction in 1H22, it said in May, with overall progress estimated at 14.3% at end-Q1, compared to a target of 10.9%.

Detailed engineering was expected to be substantially completed during Q2, while Ausenco has been mobilized to begin plant construction.

The company expects to invest about US$114mn at Las Chispas in 2021.

4. La Yaqui Grande, capex: US$137mn

Metal: Gold

First production target: 2022

Alamos Gold’s La Yaqui Grande project aims to extend the life of its Mulatos mine while lowering costs at the Sonora state property.

The US$137mn investment remains on track for commercial production in 3Q22, the company said in its Q1 MD&A report.

Pre-stripping rates ramped up to 48,000t/d by end-Q1.

This year will see the bulk of the heavy lifting at La Yaqui Grande, with Alamos planning to incur US$95-100mn of capex, with US$16.8mn spent in the first quarter.

The project is expected to produce 123,000oz/y gold.

5. Camino Rojo, capex: US$134mn

Metal: Gold

First production target: 2021

The Camino Rojo gold project will propel Orla Mining to producer status, with the company targeting first production in late 2021.

Activities are focused on earth moving, concrete pouring and structural and mechanical installations in areas of the crushing circuit, plant, heap leach and process pond, camp and administration offices, the company said in May.

Engineering was 95% and construction 22% complete, with US$107mn of total project capital committed as of end-April.

A first gold pour is targeted for Q4, with average output of 94,000oz/y gold.

6. Tahuehueto, capex: US$32mn

Metals: Gold, copper, silver, zinc, lead

First production target: 2021

Altaley Mining (formerly Telson Mining) is accelerating development of its Tahuehueto gold and polymetallic project after securing new funding.

The company announced a US$25mn syndicated funding package and closed a US$8.0mn private placement, as well as executing a silver stream financing with Empress Royalty.

Tahuehueto is currently around 60% complete, Altaley said earlier in June. The project involves constructing a 1,000t/d capacity processing facility and related mine infrastructure.

Pre-production is on track by end-2021 with full production due in 1Q22.

7. Santana-Los Verdes, capex: US$7.55mn

Metal: Gold

Commissioning target: 2021

Minera Alamos is another junior headed for producer status as it advances its Santana-Los Verdes asset toward production.

The company reported Monday that construction activities have concluded ahead of commissioning planned for end-June.

The announcement follows a first blast at the Nicho Norte pit in May.

Minera Alamos is aiming for steady-state operations next year.

Output is expected at around 27,500oz/y gold.

PRE-CONSTRUCTION

In addition to the construction-stage projects, the BNamericas database lists Southern Copper’s US$159mn Pilares mine project in the pre-construction stage.

Southern is on track for first production in 1Q22. Pilares will operate as an open pit mine, producing 35,000t/y copper, with ore transported for processing at the La Caridad asset.