Canadian Miners in Mexico Snapshot: Eight companies to watch
Its strong infrastructure, long mining heritage and prospective mineral belts draw explorers and miners from near and far. Here are eight companies with exploration, development and producing projects in the country.
Golden Tag Resources
Golden Tag Resources (TSXV: GOG) is a Toronto-based explorer holding its 100%-owned San Diego project in Durango state, subject to a 2% net smelter return to Golden Minerals (TSX: AUMN, NYSE: AUMN). The project, located 75 km southwest of Torreon in the state of Coahuila has a 2013 historic resource of 16.5 million tonnes grading 60 grams silver per tonne, 0.71% lead, 1.22% zinc and 105 grams silver equivalent per tonne for 55.5 million oz. of silver equivalent. Its inferred resource totals 42 million tonnes grading 115 grams silver equivalent per tonne for 160 million oz. of silver equivalent. The resource estimate was based on 33,000 metres of diamond drilling since 2005 and was completed by SGS Canada.
Golden Tag expects to complete the acquisition of the La Parrilla Silver Mine Complex in Durango from First Majestic Silver (TSX: FR; NYSE: AG) in late August. The two companies, together with First Majestic Plata entered into a definitive asset purchase agreement for La Parrilla in December 2022.
La Parrilla is a fully permitted former producing mine complex consisting of five high-grade underground silver mines and an open pit that operated continuously from 2004 to September 2019 when it was placed on care and maintenance due to low silver prices.
The complex has a historic measured and indicated resource of 1.1 million tonnes grading 277 grams silver equivalent per tonne for 9.95 million oz. of silver equivalent, and inferred resources of 1.4 million tonnes grading 274 grams silver equivalent per tonne for 12.5 million oz. of silver equivalent.
Golden Tag will acquire 100% of the assets of La Parrilla in return for US$20 million of Golden Tag shares and deferred payments of US$13.5 million for total compensation of US$33.5 million. First Majestic will be Golden Tag’s largest shareholder as a result of the transaction.
The acquisition is dependent on receipt of applicable regulatory approvals by the TSX Venture exchange and Golden Tag shareholders relating to First Majestic’s control of more than 20% of Golden Tag voting rights.
Golden Tag Resources has a market capitalization of $26 million.
Guanajuato Silver
Guanajuato Silver (TSXV: GSVR; US-OTC: GSVRF) reported record production from its four wholly owned silver mines for the quarter ending June 30. A July 14 press release issued by the company reported the production of 477,650 oz. of silver, 4,719 oz. of gold, 875,802 lb. of lead and 897,258 lb. of zinc for 941,338 oz. of silver equivalent from its El Cubo, Valencia, and San Ignacio mines in Guanajuato state, and its Topia mine in Durango.
The total production for Q2 represents a 2.5% increase over Q1 and is the sixth straight quarter of increased precious metal production.
Guanajuato acquired the Topia, San Ignacio and Valencia mines as well as the Cato processing plant from Minera Mexicana Rosario, a subsidiary of Great Panther Mining, in August 2022 for US$14.7 million in cash and shares. The El Cubo mine and mill complex was acquired from Endeavour Silver (TSX: EDR; NYSE: EXK) in April 2021 for US$7 million cash and 21,331,058 shares.
In a June 26 press release, Guanajuato reported the results of a preliminary economic assessment (PEA) for its El Cubo mine complex as part of a scheduled program to update technical reports and resource estimates for all of its mines in Mexico. A resource estimate for its San Ignacio mine is expected later this year.
The PEA for El Cubo reported indicated resources of 453,180 tonnes grading 200 grams silver per tonne and 2.51 grams gold per tonne for 2,914,000 oz. of silver and 36,500 oz. of gold. Inferred resources total 1.4 million tonnes grading 219 grams silver per tonne and 2.84 grams gold per tonne for 9.6 million oz. of silver and 129,900 oz. of gold. A six-year mine life was reported, but “El Cubo has already demonstrated a production history that has extended well over 100 years,” said Guanajuato chairman and CEO James Anderson. “Our goal,” he added “is to continually increase mineral resources through infill and exploration drilling to end each year with 125% of the total resources that we started the year with.”
On July 20, Guanajuato announced a bought-deal private placement for gross proceeds of $8 million.
Guanajuato Silver has a market capitalization of $113.3 million.
Heliostar Metals
In an Aug. 3 news release Heliostar Metals (TSXV: HSTR) announced that it is evaluating three underground mining scenarios with different cut-off grades and mining rates for its Ana Paula gold-silver project in the Guerrero Gold Belt halfway between Mexico City and the Port of Acapulco. The scenario that maximizes profitability and shortens the timeline to production will then form the basis of a feasibility study in 2024.
Acquired in March from Argonaut Gold (TSX: AR) for US$30 million, Ana Paula has measured and indicated resource estimate of 21.2 million tonnes grading 2.16 grams gold per tonne and 5.3 grams silver per tonne for 1.47 million oz. of gold and 3.6 million oz. of silver, according to a 2023 preliminary feasibility study. Its proven and probable reserve estimate comes to 14.1 million tonnes grading 2.38 grams gold per tonne and 5.61 grams silver per tonne for 1.1 million oz. of gold and 2.5 million oz. of silver.
The study estimates a mine life of eight years, life of mine capital expenditures of $257.6 million and initial capital of $233.6 million, with payback within 2.5 years. Pre-tax NPV was pegged at $464 million at a discount rate of 5% with a 31% pre-tax internal rate of return.
On July 11, Vancouver-based Heliostar reported the closing of a $7 million private placement, which will be used to continue exploration work at Ana Paula as well as for general corporate working capital purposes.
Heliostar also has an option to acquire a 100% interest in the San Antonio gold project from Argonaut Gold and Compania Minera Pitalla, contingent on the acquisition of an environmental permit by March 2026. If Heliostar is able to obtain the permit, it has a further 18 months to acquire the 100% interest in return for payment of between US$80 million and US$150 million depending on the price of gold.
Located in Baja California Sur 160 km north of Cabo San Lucas, San Antonio has a 2012 measured and indicated resource of 65 million tonnes grading 0.83 grams gold per tonne for 1.7 million oz. of gold, and an inferred resource of 6.2 million tonnes grading 0.34 grams gold per tonne for 67,000 ounces.
Heliostar also has a 100% interest in the Unga gold project in Alaska and the Oso Negro, La Lola and Cumaro development properties in Mexico.
Heliostar Metals has a market capitalization of $45.8 million.
Monumental Minerals
Monumental Minerals (TSXV: MNRL; US-OTC: MNMRF) announced on July 12 the start of drilling at its pre-resource Jemi rare earth elements (REE) project in Coahuila state, 40 km south of the U.S. border. The drilling will test areas with high concentrations of rare earth mineralized dykes and sills at surface and the company’s deposit model for the property.
The model was based on detailed geological mapping, regional stream sediment sampling, ground radiometric geophysical surveys and lithogeochemical sampling suggesting a mineralized REE layered intrusion at a depth of less than 300 metres. The drill campaign will test six targets to a depth of approximately 300 metres.
Monumental has an option to acquire a 100% interest in Jemi from the local vendors through an assumption agreement with Discovery Silver (TSX: DSV; US-OTC: DSVSF) concluded in September 2021. The assumption of ownership is contingent on the completion of US$2 million of exploration expenditures on the property by May 16, 2024 and the payment of US$500,000 in cash or common shares to the vendors upon exercise of the option.
The 36.5-sq.-km Jemi project hosts numerous REE occurrences containing potentially economic concentrations of neodymium, praseodymium, dysprosium and terbium with associated tantalum, niobium and zirconium.
In April, Vancouver-based Monumental Minerals closed a non-brokered private placement for gross proceeds of $2.2 million to be used for exploration and development work and for general working capital purposes.
The company also has option agreements with Lithium Chile (TSXV: LITH; US-OTC: LTMCF) to acquire a 75% interest and title to the Laguna cesium-lithium brine project and a 50.1% interest in the Salar De Turi lithium project in Chile.
Monumental Minerals has a market capitalization of $4.6 million.
Radius Gold
Radius Gold (TSXV: RDU), a member of the Vancouver-based Gold Group of companies, has four projects in Mexico: the Amalia and Plata Verde projects in Chihuahua, the Maricela project in Sonora and the Tropico project in Zacatecas.
The Plata Verde project is the site of an undocumented large-scale underground bulk mining operation from the late 1800s that was rediscovered by Radius geologists in January 2020. No references to the operation were found in the records of the Mexican Geological Survey despite the evidence of an extensive series of underground caverns, and a smelter operation and crushing circuit on surface.
In July 2022, a Radius subsidiary negotiated an exclusivity agreement with Minera San Julian, a wholly owned subsidiary of Fresnillo plc (LSE: FRES), the world’s leading silver producer. The deal granted San Julian nine months to evaluate the project and negotiate an option agreement to earn a 70% interest in the project. In a July 19, 2023 news release, Radius announced a six-month extension of the exclusivity period to Jan. 7, 2024, and the right to a further six-month extension contingent on an advance of US$500,000 to fund drill testing and the receipt of interim funding of $206,000.
In the release, Radius president and CEO Bruce Smith said Fresnillo has spent significant funds on road building, drill pads, geological work and metallurgical testing.
The Amalia silver-gold project was optioned to Pan American Silver (TSX: PAAS; NYSE: PAAS) in July 2018, giving it the right to earn an initial 65% interest in the project in return for a cash payment of US$1.5 million and the expenditure of US$2 million on exploration over a four-year period. Sixty-seven drill holes totalling 23,058 metres have been completed at the Amalia project, including one intersection of 438 grams silver per tonne and 0.8 grams gold per tonne over 17 metres that was reported in August 2022.
Radius announced the discovery of the Tropico project in March 2023 for which it has an option agreement with local claim owners. The explorer agreed to a payment of US$200,000 over a 42-month period to be followed by payments of US$5 million at month 48, US$5 million on completion of a compliant feasibility study and US$3 million if reserves exceed 2 million gold equivalent ounces.
In a June 7 press release, Radius reported the completion of geological mapping, rock chip sampling and a deep penetrating CSAMT survey.
At its Maricela project, geologists have mapped and sampled an epithermal silver and gold mineralized system extending about 1.5 km long by 300 metres wide. Rock chip samples collected by Radius have returned values of up to 12.75 grams gold per tonne and 3,780 grams silver per tonne. The company can earn a 100% interest in Maricela by paying the private property owner US$1.25 million over three years and a final payment of US$1,060,000 at the end of year three.
Radius Silver has a market capitalization of $21.4 million.
Regency Silver
Regency Silver (TSXV: RSMX; US-OTC: RSMXF), a Vancouver-based company, reported in a July 19 press release that eight of nine holes drilled this year at its flagship past producing Dios Padre project in Sonora have intersected sulphide-specularite supported breccias similar in nature to the breccia hosting gold-copper-silver mineralization intersected in a discovery hole last year.
The 2022 discovery hole, part of a 2,000-metre drill program targeting a large IP target north of the historic mine, intersected 6.84 grams gold per tonne, 0.88% copper and 21.82 grams silver per tonne over 35.8 metres.
Among the follow-up holes drilled this year, REG-23-14 intersected 35.9 metres of 5.51 grams gold per tonne, including 29.4 metres of 6.32 grams gold per tonne. Hole REG-23-15, which was drilled approximately 65 metres down-dip from REG-23-14 and approximately 90 metres down-dip from the 2022 discovery hole, intersected 128.35 metres of 0.84 grams gold per tonne, including 57.95 metres of 1.49 grams gold per tonne and 32.5 metres of 2.23 grams gold per tonne.
The high-grade Dios Padre gold-copper-silver project, located midway between Hermosillo and Chihuahua City, has an inferred resource of 11.3 million oz. of silver equivalent at an average grade of 255.64 grams silver equivalent per tonne at a cut-off grade of 120 grams silver equivalent per tonne.
The property has excellent access to infrastructure, including a major highway, power and skilled labour. The area has a 400-year history of silver mining and is located in the vicinity of Pan American Silver’s (NYSE: PAAS, TSX: PAAS) Dolores Mine, Agnico Eagle’s (NYSE: AEM; TSX: AEM) Pinos Altos mine and Alamos Gold’s (NYSE: AGI; TSX: AGI) Mulatos mine.
Regency’s portfolio of projects also includes the El Tule gold project in northern Nayarit close to the border of Sinaloa and the Paisano/Pamela gold project in Peru.
A systematic mapping and sampling program to prioritize drill targets is planned for El Tule, which contains extensive old mining operations and ongoing artisanal mining.
Regency Silver has a market capitalization of $20.6 million.
Sierra Madre Gold & Silver
Sierra Madre Gold & Silver (TSXV: SM; US-OTC: SMDRF) reported the results of four holes from the phase 1 drill program at its La Tigra gold-silver project on July 13, including one intercept of 7.11 grams gold per tonne and 10.55 grams silver per tonne, or 7.25 grams gold equivalent over 5.9 metres.
A joint venture agreement with Industrial Minera Mexico requires payments totalling US$1.5 million over three years and the completion of an NI-43-101-compliant technical report containing a resource estimate. Industrial Minera Mexico can elect to retain a 51% interest in a joint venture with Sierra Madre if the report estimates gold resources of 1 million oz. or more.
Historical mining was carried out at La Tigra by thousands of gold panners prior to 1900, with more recent production beginning in 1927 and `between 1983 and 1991 by Compania Minera Unida Oriente and Campania Minera Nayoro, respectively.
Sierra Madre also has a 100% interest in the past producing La Guitarra project, which it acquired from First Majestic Silver (TSX: FR; NYSE: AG) in March 2023 in an all-share transaction valued at US$35 million. The fully permitted underground operation, located in the Temascaltepec mining district, 130 km southwest of Mexico City, produced up to 1.5 million oz. of silver equivalent annually between 2015 and 2018, and is currently on care and maintenance.
In a May 31 press release, Vancouver-based Sierra Madre announced the closing of a $10.3 million private placement with proceeds to be used for the development of the 399-sq.-km La Guitarra project and general working capital purposes. Plans for La Guitarra include a two-year drill program and a resource report by Sept. 30 followed by a PEA and a new mine plan.
Sierra Madre also has a 100% interest in the Tepic gold-silver project in Nayarit, which has a 2013 historical indicated resource of 1.1 million tonnes grading 201 grams silver equivalent per tonne for 7.1 million oz. of silver equivalent and an inferred resource of 537,835 tonnes grading 181 grams silver equivalent per tonne for 3.1 million oz. of silver equivalent.
Sierra Madre has a market capitalization of $56.2 million.
Vizsla Silver
Vizsla Silver (NYSE: VZLA; TSXV: VZLA) is continuing to report encouraging results from its 100%-owned flagship Panuco silver-gold project in Sinaloa state. In a July 13 press release, the company reported drill results from 20 expansion holes at its Copala target, including one result of 310 grams silver per tonne and 2.32 grams gold per tonne over 18.5 metres for 445 grams silver equivalent per tonne.
The strike length at the Copala target is now 1,670 metres and remains open in both directions with three drill rigs onsite to continue expansion and infill drilling in anticipation of an updated resource estimate in Q4 of this year.
On May 30, Vizsla reported drill results from five holes at the recently discovered La Luisa vein, about 700 metres west of the property’s Napoleon target. Hole NP-23-262 reported 372 grams silver per tonne, 5.82 grams gold per tonne, 2.15% lead and 3.15% zinc for 916 grams silver equivalent per tonne over 3.05 metres. These drill results expanded the high-grade footprint at La Luisa to 350 metres in length by 450 metres down dip.
Vancouver-based Vizsla Silver has completed more than 250,000 metres of drilling at Panuco and has budgeted for an additional 90,000 metres this year.
A January 2023 resource estimate for the 72-sq.-km property reports an indicated resource of 7.5 million tonnes grading 243 grams silver per tonne, 2.12 grams gold per tonne, 0.23% lead and 0.71% zinc for an average grade of 437 grams silver equivalent per tonne accounting for 104.8 million oz. of silver equivalent. An inferred resource of 7.2 million tonnes accounts for an additional 114.1 million oz. of silver equivalent. Vizsla Silver has a market capitalization of $299.4 million.
