Mexico roundup: M&A, PEA and project green light

After entering into a definitive agreement, Argonaut Gold has announced that Alamos Gold will acquire all of its issued and outstanding shares. As part of the acquisition, Alamos will acquire Argonaut’s Magino mine in Canada. Additionally, Argonaut’s assets in the US and Mexico will be spun out to its existing shareholders within a newly created junior gold producer initially called SpinCo.

“The agreement with Alamos provides a unique opportunity to place Magino in the hands of a company with stronger financial capacity to complete the ramp-up and optimization of Magino. Ultimately, this decision provides long-term upside potential for all stakeholders,” Argonaut CEO Richard Young said in a statement.

Project go-ahead

Toronto-based Americas Gold and Silver decided to speed up development of its EC120 project at the Cosalá operations in Sinaloa state due to the current higher silver and copper prices.

The company expects to close on financing with a metal trader for the anticipated initial capital requirements of the project, formerly known as El Cajón, this quarter with the goal of producing higher-grade silver-copper concentrates in early 2025.  

The 2019 PEA forecast average annual production of 2.5Moz of silver and 4.5Mlb of copper over a mine life of approximately five years.

The Cosalá operations produced approximately 295,000oz of silver, 2.8Mlb of lead and 8.0Mlb of zinc in Q1 compared with approximately 265,000oz of silver, 2.7Mlb of lead and 7.2Mlb of zinc a year earlier.  

PEA completed

Barksdale Resources announced the results of a preliminary economic assessment (PEA) on the San Javier oxide copper-gold project located in Sonora, Mexico.

The PEA envisions an initial capital cost of US$117mn and the use of conventional open-pit mining with a solvent-extraction and electrowinning plant to produce LME-grade copper cathodes, the company said in a release.

According to Barksdale, the study shows robust economics using a conservative base case copper price of US$4.00/lb, with a 13-year mine life producing 209Mlb (94,800t) of cathode copper and “excellent growth opportunities including resource expansion, assessing the potential for gold recovery, and run of mine processing.”