Canadian miners in Mexico Snapshot: Eight companies to watch
With its mining friendly policies, highly prospective mineral belts, and well-developed infrastructure and regulatory regimes, Mexico is an attractive jurisdiction for mining companies of all sizes. Below are eight companies with exploration, development, and production-stage projects in the country.
ALTALEY MINING
Mining equipment at Altaley’s Tahuehueto Gold Mine project in north-western Durango State, Mexico. Credit: Altaley Mining
Altaley Mining (TSXV: ATLY) is a Vancouver-based junior with two 100%-owned gold, silver, and base metals projects — Tahuehueto and Campo Morado.
The company’s flagship 74.9-sq.-km Tahuehueto property in Mexico’s northwestern Durango state, about 250 km northwest of the capital city of Durango, encompasses at least 12 mineralized zones hosted within a structurally controlled epithermal system that has been traced for more than 6 kilometres.
A 1,000-tonne-per-day processing plant is nearing completion on the property that will allow the project to start commercial production in 2023.
In April, an updated prefeasibility study for Tahuehueto envisioned an underground mining operation with an average annual production of 25,987 oz. of gold, 453,952 oz. of silver, 827 tonnes of copper, 3,155 tonnes of lead, and 6.1 million lb. of zinc over a nine-year mine life.
All-in sustaining costs (AISC) were estimated at US$844 per gold-equivalent oz. over the life of the mine. Total life-of-mine capital costs are estimated at US$56.9 million, with US$33.7 million budgeted for sustaining capital over the mine life. The resulting after-tax net present value was estimated at US$161.3 million, based on US$1,650 per oz. gold and using a 5% discount rate, with a 65.5% internal rate of return and a two-year payback.
Tahuehueto contains 6.3 million measured and indicated tonnes grading 2.11 grams gold per tonne, 46.97 grams silver per tonne, 0.27% copper, 0.9% lead, and 1.98% zinc for 425,000 contained oz. gold, 9.5 million oz. silver, 36.6 million lb. copper, 123.9 million lb. lead, and 273.4 million lb. zinc. Inferred resources add 918,000 tonnes grading 1.02 grams gold, 28.86 grams silver, 0.15% copper, 1.16% lead, and 1.96% zinc for 30,000 oz. gold, 840,000 oz. silver, 3.1 million lb. copper, 23.6 million lb. lead, and 39.8 million lb. zinc.
Campo Morado in the state of Guerrero, about 360 km southwest by road from Mexico City, is an underground polymetallic mine capable of processing 2,500 tonnes of mineralized material per day. The mine resumed commercial production in 2017 after being placed on care and maintenance by the previous owners in 2015.
Altaley Mining has a market cap of $54.4 million
GR SILVER MINING
GR Silver Mining (TSXV: GRSL; US-OTC: GRSLF) controls over 430 sq. km of land within its expanded Plomosas silver-gold project in the Rosario mining district of Sinaloa state, about 98 km southeast of Mazatlan. The property includes two past-producing precious metals underground and open pit mines — Plomosas and La Trinidad — and the integrated San Marcial and La Trinidad property.
The Vancouver-headquartered junior’s portfolio also includes early to advanced stage exploration targets that increase its landholdings to 778 sq. km of concessions containing several structural corridors that total more than 75 km in strike length.
In August, GR Silver announced a new silver discovery in the first drill hole 250 metres to the southeast of the San Marcial resource area on Plomosas. The discovery hole, SMS22-10, intersected 101.6 metres grading 308 grams silver per tonne from 98.5 metres downhole, including 0.8 metre at 7,139 grams silver, 0.3 metre at 3,065 grams silver, and 0.2 metre at 1,774 grams silver.
In July, the company reported high-grade silver mineralization from the ongoing 2022 resource expansion drill program at its 12.5-sq.-km San Marcial project, located on the eastern edge of the Rosario mining district, about 5 km south of Plomosas.
\Highlights from the first 23 holes included SMSP22-003, which intersected 15.4 metres grading 547 grams silver per tonne starting from 16 metres downhole, including 2 metres at 1,179 grams silver; SMSP22-012, which returned 15 metres at 324 grams silver from surface, including 1 metre at 1,541 grams silver; and SMS22-02, which cut 2.8 metres grading 455 grams silver from 285.9 metres, including 0.3 metre at 3,854 grams silver.
The company says the results demonstrate the potential for resource expansion both near-surface and at depth. Pit-constrained mineral resources at San Marcial stand at 7.6 million indicated tonnes grading 117 grams silver per tonne, 0.3% lead, and 0.5% zinc (147 grams silver equivalent per tonne) for 29 million oz. contained silver, 53 million lb. lead, and 86 million lb. zinc (36 million oz. silver-equivalent). Inferred resources add 3.4 million tonnes at 91 grams silver, 0.1% lead, and 0.35% zinc (108 grams silver equivalent) for 10 million oz. silver, 8 million lb. lead, and 26 million lb. zinc (12 million oz. silver equivalent).
GR Silver Mining has a market cap of $38.1 million.
OROCO RESOURCE
Vancouver-based Oroco Resource (TSXV: OCO; US-OTC: ORRCF) is an exploration company focused on advancing its Santo Tomás porphyry copper project, which borders the states of Sinaloa and Chihuahua, roughly 175 km northeast of the deep-water port of Topolobampo.
The junior controls 89.1 sq. km of contiguous mineral concessions that include the Santo Tomás North and South copper deposits.
In mid-July, Oroco released two additional assay results from its drilling campaign on the property. Hole N013, drilled to the northwest and down-dip of hole N011, intersected a broad 450-metre interval of altered, mineralized andesite and monzonite intrusion at the northern extremity of the company’s current North zone drill program. That interval included 128 metres grading 0.32% copper-equivalent from 247 metres downhole, 95 metres of 0.45% copper-equivalent from 439 metres, and 126 metres of 0.29% copper-equivalent from 547 metres.
Hole N014 cut 330 metres of altered, mineralized andesite and monzonite intrusion down dip from intervals at holes N012 and N007 drilled on the North zone, returning 126 metres grading 0.23% copper-equivalent within that interval.
Oroco says it has now completed 20 holes on the zone and has received drill results from 14 of these holes covering 10,293 metres. The drilling is part of its 2021-2022 campaign that has spanned 1.1 km of strike length along the core of the North zone deposit.
The company said it plans to complete a preliminary economic assessment on Santo Tomás in the first or second quarter of 2023.
Oroco’s other Mexican asset is its 100%-owned Xochipala project, which covers two mineral concessions — Celia Generosa and Celia Gene — totaling 1.9 sq. km in the state of Guerrero.
Oroco Resource has a market cap of $173 million.
OSISKO DEVELOPMENT
Osisko Development (TSXV: ODV; NYSE: ODV) has projects in Canada and Mexico.
The Montreal-headquartered junior is focused on advancing its 113.4-sq.-km development-stage San Antonio project in Sonora state, roughly 160 km from the towns of Hermosillo and Obregon. The property has five deposits, Sapuchi, California, Golfo de Oro, High Life, and Calvario over 2.8 km within the Sapuchi-Cero Verde trend.
In June, Osisko released an initial open pit resource estimate for San Antonio. The estimate outlined 14.9 million indicated tonnes grading 1.2 grams gold per tonne and 2.9 grams silver per tonne for 576,000 oz. of gold and 1.4 million oz. of silver. Inferred resources add 16.6 million tonnes grading 1 gram gold and 3.3 grams silver for 544,000 oz. of gold and 1.8 million oz. of silver.
The company said the estimate was based on 84,454 metres of current and verified historic drilling in 579 holes, of which 27,870 metres in 177 holes were drilled in 2021.
Commenting in a June 30 press release, Chris Lodder, Osisko’s president, said the new resource strengthened the company’s portfolio for near term advancement and towards possible production. “Osisko Development has made considerable progress at San Antonio in the past year with the construction of the leach pad, near-term processing of the stockpile and completion of a drill program to generate this initial resource,” he said.
Since acquiring the property in November 2020, the company said it has been focused on amending existing permits to transition the mine production to a gold heap-leach operation. To date, it has constructed a leach pad and carbon-in-column plant to process stockpiled mineralized material, which totalled 1.1 million tonnes with an average grade of 0.57 gram gold per tonne. Processing of the stockpile began in late 2021, and currently, 680,000 tonnes of mineralized material has been processed.
Osisko Development has a market cap of $533.1 million.
PRIME MINING
Vancouver-headquartered Prime Mining (TSXV: PRYM; US-OTC: PRMNF) is focused on developing its high-grade Los Reyes gold-silver project in Sinaloa, 43 km southeast of Cosalá.
In July, the junior reported additional assays from its second phase step-out and infill drill program on the property. The drill results are from eight holes on the San Miguel East deposit (one of eight known deposits on the land package) in the western part of Los Reyes and targeted mineralization is below the current resource, the company said.
Highlights from the drilling included holes 22SME-11, which intersected 3 metres grading 1.24 grams gold per tonne and 14 grams silver per tonne starting from 12 metres downhole; 18 metres at 2.72 grams gold and 129.8 grams silver from 223.5 metres; and 3 metres at 1.12 grams gold and 4.15 grams silver from 303 metres. In addition, hole 22SME-10 returned 2.9 metres at 1.88 grams gold and 283.72 grams silver from 253.5 metres; and hole 22SME-14 cut 6 metres at 1.25 grams gold and 67.15 grams silver from 39 metres.
Prime said that all eight holes encountered mineralization, with seven of them extending mineralization beyond the current historic resource area, which currently contains 19.8 million measured and indicated tonnes grading 1 gram gold per tonne and 26.1 grams silver per tonne for 633,034 oz. contained gold and 16.6 million oz. silver. Inferred resources add 7.1 million tonnes at 0.78 gram gold, 29.9 grams silver for 178,837 oz. gold and 6.8 million silver ounces. The estimate was based on a cut-off grade of 0.22 gram gold per tonne.
“Our ongoing Phase 2 drilling of step-out holes at San Miguel East has made discoveries of both mill and heap-leach grade mineralization that are expanding the potential resource at this deposit,” Daniel Knuz, the company’s chief executive officer, said in a July 18 press release.
“Once again, our drilling continues to intersect multiple veins down-hole that increase the resource potential,” he added. “We also expect that the deposit will grow along strike to the southeast eventually connecting with the nearby Noche Buena deposit.”
To date, the company has completed 201 holes (57,585 metres) of its Phase 2 drilling campaign, and currently has six drills turning on the property. It said that drilling will continue until the end of October.
Prime Mining has a market cap of $196.1 million.
SOUTHERN SILVER EXPLORATION
Southern Silver Exploration (TSXV: SSV: US-OTC: SSVFF) is focused on developing high-grade precious and base metal properties in North America.
The Vancouver-headquartered junior is advancing its 100%-owned Cerro Las Minitas silver-lead-zinc project in Mexico, about 70 km northeast of the city of Durango.
The 344.5-sq.-km property lies within the prolific Faja de Plata region of northern Mexico, one of the world’s most significant silver-producing regions. The area hosts Hecla Mining’s (NYSE: HL) San Sebastian silver-gold mine, about 30 km east of Cerro Las Minitas, and the La Preciosa silver-gold project, about 30 km to the west, operated by Coeur Mining (NYSE: CDE).
In July, Southern Silver released assay results from drilling on the property’s North Felsite zone. The zone is located on the eastern side of the property and wraps around the northern edge of the Central intrusion where it transitions into the North Skarn target area.
Highlights from the drilling included hole 22CLM-187, which intersected 2.2 metres grading 162 grams silver per tonne, 0.6 gram gold per tonne, 0.3% copper, 1.5% lead, and 0.6% zinc (314 grams silver-equivalent per tonne) from 489.8 metres downhole, including 0.7 metre at 499 grams silver, 0.1 gram gold, 0.4% copper, 4.6% lead, and 1.5% zinc (759 grams silver-equivalent).
Rob Macdonald, the company’s vice-president of exploration, said in a July 25 press release that the latest drill results “have now confirmed the continuity of new mineralization over an approximate 400 metre strike length extending laterally from the Mina La Bocona to the Skarn Front deposits.”
He added that mineralization remains open at depth in both the North Felsite and the North Skarn targets. “Continuous to semi-continuous mineralization has now been identified around the circumference of the Central intrusion with the exception of the southwest quadrant which remains to be explored by diamond drilling.”
Southern Silver has completed a total of 196 holes (84,872 metres) on Cerro Las Minitas.
Southern Silver Exploration has a market cap of $71.4 million.
TOCVAN VENTURES
Tocvan Ventures (CSE: TOC: US-OTC: TCVNF) is a Vancouver-based precious metals exploration company with two properties in the Mexican state of Sonora — its flagship Pilar gold project in the Sonora gold district and El Picacho project in the Caborca orogenic gold belt.
In July, Tocvan announced the completion of its latest drilling campaign at Pilar. The drilling comprised seven reverse-circulation drill holes totaling 1,382 metres and focused on step-out targets along the 4-T zone and a newly discovered trend between the Main zone and 4-T. At press time, assay results were pending for all seven holes.
The company said that drilling will resume in mid-September to follow up and expand on the target areas.
Earlier that month, Tocvan also reported results from surface sampling on El Picacho. To date, the company has collected 65 samples from the Murcielago prospect, which it says has defined a new target area.
Highlights from the sampling along a 450-metre trend at the prospect included rock samples that returned 7.2 grams gold per tonne, 36 grams silver per tonne, and 4.4% lead; 4.5 grams gold, 197 grams silver, 4.8% lead, and 7.1% zinc; 3.3 grams gold, 67 grams silver, and 1.6% lead; and 2.7 grams gold, 25 grams silver, and 1.9% zinc.
The Murcielago prospect “is one of six key target areas at El Picacho that has seen little to no drilling,” said Brodie Sutherland, Tocvan’s chief executive officer, in a July 6 press release. “The consistent mineralization seen across a 450-metre trend coupled with high-grade historic results along old shafts, makes Murcielago an additional compelling drill target as we look to unlock the potential of the project.”
“Sonora is well known for cost-effective mines that can operate open pits with grades below 0.5 gram gold per tonne with very favourable production costs,” he added. “Seeing this broad low-grade mineralization and higher-grade within gives us a lot of confidence in the potential we have here.”
Tocvan Ventures has a market cap of $25.4 million.
ZACATECAS SILVER
Vancouver-headquartered Zacatecas Silver (TSXV: ZAC; US-OTC: ZCTSF) is advancing its Esperanza gold and Zacatecas silver projects in Mexico.
In July, the junior reported assay results from an ongoing initial diamond drill program on the El Cristo vein system, a northwest strike extension of the Veta Grande vein system onto its Zacatecas property.
Highlights from the drilling included holes CRI-2022-001, which intersected 9.5 metres grading 167 grams silver per tonne, 0.12% zinc, and 0.04% lead (175 grams silver-equivalent per tonne) starting from 40 metres downhole; CRI-2022-02, a step-down hole from CRI-2022-001, that returned 1.5 metres grading 11.3 grams silver, 0.18 gram gold, 1.6% zinc, and 0.48% lead (121 grams silver-equivalent) from 109.5 metres; and CRI-2022-005, which cut 0.65 metre grading 565 grams silver, 1.2 grams gold, 2.7% zinc, and 1.3% lead (829 grams silver-equivalent) from 55.2 metres.
Zacatecas said that all the holes targeted the shallow depth extension of intermediate sulphidation veins below near-surface historical workings or areas close to shallow historical shafts. To date, it has received assays from 13 of 28 holes drilled at El Cristo.
“Several holes hit historical mining voids or zones of backfill material over widths of up to 5 metres, suggesting that a higher-grade part of the near surface vein had already been mined,” said Chris Wilson, the company’s chief operating officer, in a July 7 press release.
“That there are at least 20 shallow historical shafts at El Cristo, strongly suggests that the system is mineralized,” he added, noting that the drilling had only tested small areas of the overall vein system to very shallow depths and that “the first 13 holes intersected a robust silver-equivalent grades over down-hole intercept of up to 9.6 metres is very encouraging. The system is open in all directions across multiple veins.”
Zacatecas Silver has a market cap of $38 million.
This article was first published by The Northern Miner. Read the original story here.