Already the world’s leading silver producer by a clear margin, Mexico is expected to hold the top position for some time to come on the back of several new projects under development and some excellent drilling successes. Mexico has long been recognized for its silver riches, with some historians noting that the Spanish Conquistadores “came for gold but stayed for the silver”.
Mining for the precious metal has been consistent since then and in 2020 the nation returned to the top as the world’s leading silver miner producing 5,541t (178Moz) of silver, or 23% of the total global mine production and 18% of total silver supply in 2020. That grew to 5,600t in 2021 and output levels remain strong this year with production increasing by 2.28% in June of 2022 over the same month in the previous year.
The Mexican silver industry has achieved great success and built a solid reputation around the world for being a world leader in silver production and silver exports. Today, as modern industries such as automotive, petroleum, and machinery becoming Mexico’s new label in the global market, the silver industry in Mexico remains one of the most important parts for the economic growth and foreign exchange earnings.
The Mexican mining industry expects investments to rise 15% in 2022, led by silver, with the nation’s mining sector expected to invest US$5.5B in 2022, up 15.2% from 2021, according to the Mining Chamber of Mexico (Camimex).
Meanwhile, BNamericas reports that a significant amount of that investment will be targeted on exploration spending in 2022 as companies seek to grow reserves and advance projects in a strong metals price environment. According to BNamericas, 10 of the country’s main silver and gold producers have outlined aggregate budgets of around US$377M.
New projects
Leading international advisory firm, Ax Legal, has described Mexico as one of the most important mining jurisdictions in the world. In addition to being the top producer of silver globally, Mexico is global leader for 17 minerals, including the second in fluorite, third in celestite and wollastonite, sixth in zinc, seventh in salt, eighth in copper, and ninth in gold. The company’s latest review of Mexican mine developments says the project portfolio continues to advance in 2022.
Ax reported that this year the construction pipeline for new projects has grown to 11 new projects whose capital expenditure total US$2.71B – up from the US$1.5B that was announced at the start of the year. Silver developments make up a large portion of new projects and include:
Juanicipio by Fresnillo (LSE: FRES) and MAG Silver (TSX: MAG)
- Capex: $440M
- Metals: Silver and gold
- Stage: Under construction
Fresnillo (56%) is a joint venture with MAG Silver. Juanicipio will produce 11.7Moz of silver and 43,500oz of gold are projected annually once in operation. Initial mine life is 12 years.
Terronera by Endeavour Silver (TSX: EDR)
- Capex: US$175M
- Metals: Silver, gold
- Stage: Pre-construction
- Start-up: A construction investment decision is expected in 2022
Terronera is a major underground silver and gold mine proposed for the Jalisco state of Mexico. The prefeasibility suggests a 1,600tpd underground mining operation capable of producing up to 3Moz of silver and 32,800oz of gold a year. The Terronera project is estimated to hold 5.56Mt of probable ore reserves grading 205g/t silver and 2.29g/t gold and containing a total of 36Moz of silver and 410koz of gold. Terronera will be an underground mining operation involving cut and fill, as well as long hole stoping method.
Pyrite Plant by Fresnillo
- Capex: US$155M
- Metals: Silver and gold
- Stage: Under construction
The Pyrites plant is expected to improve overall recoveries of gold and silver, and therefore maximize production in the Fresnillo district; expected to total an average of 3.5Moz silver and 13Koz gold per year once both phases are operating at full capacity. This project was divided into two phases. The first phase consisted of the iron flotation circuit and pyrites leaching plant at the Saucito mine, which was commissioned mid-2018. The second phase, a 14,000tpd tailings flotation plant at the Fresnillo mine, is under construction.
The second phase, a flotation circuit, will treat the ongoing and historical tailings from the Fresnillo mine to produce a pyrites concentrate which will be sent to a filtration plant and then on to the leaching plant at Saucito, the final part of the process to produce the precipitates.
Las Chispas by SilverCrest Metals (TSX: SIL)
- Capex: US$138M
- Metals: Silver and gold
- Stage: Commissioning/ start-up
- Commercial production: Q4 2022
Las Chispas mine is an underground silver and gold mining development in Sonora, Mexico that will average 5.2Moz of silver and 56,000oz per annum of gold. The project has an estimated life of mine of 8.5 years. Las Chispas is one of the highest-grade primary silver mining projects in the world.
Exploration success
Mexico’s silver riches have again been highlighted by a string of recent drilling successes, including Capitan Mining Inc.’s (TSXV: CAPT) exciting new results from five reverse circulation (RC) drillholes from the Jesus Maria silver zone at its 100%-owned Cruz de Plata Project in Durango, Mexico.
The latest drill results have extended high-grade silver mineralization at Jesus Maria to depth; identifying a new higher grade silver zone, which remains open. All the recently reported drill holes successfully intersected the Jesus Maria vein and extended the zone down-dip.
The current programme is part of Capitan Mining’s continued exploration activity focus on the expansion and delineation of the Jesus Maria, high-grade, Ag-vein zone. Drillholes were designed as either step-outs along section or as strategic infills, to further delineate areas of high-grade Ag-mineralization.
“We are very pleased to show the continuity at depth of both grade and thickness of the Jesus Maria silver vein,” Capitan’s CEO, Alberto Orozco, said.
“We look forward to upcoming holes which will not only continue to test the extension of Jesus Maria, but of the Gully Fault Ag-Au zone as well. These two higher-grade silver zones in conjunction with the JM North, JM South and San Rafael targets, highlight the potential for significant scale at the Cruz de Plata Silver Project.”
The company has been in talks with various geophysical groups with respect to conducting a property wide airborne magnetic/magnetotelluric survey across the property package this autumn. In conjunction with this, a more focused programme of deep penetrating, ground IP/resistivity is also being discussed, to be conducted over the Jesus Maria, and Capitan targets.
Other significant drilling successes announced recently have been made by Chesapeake Gold Corp. (TSXV: CKG), Endeavour Silver (TSX: EDR), Kootenay Silver (TSXV: KTN), and Vizla Resources (TSXV: VZLA).
