LATIN AMERICAN SPECIAL — New Mexican mines producing

Foreign influence on mining in Mexico continues to be felt with the recent openings of new gold mines.

Long-time Mexican producers such as Torrez, whose foreign ownership (30%) today belongs to Homestake (NYSE), have been joined by the likes of Hecla Mining (NYSE), project partners Eldorado (VSE) and Campbell Resources (TSE), and Wallhalla Mining of Australia.

Homestake, an international gold producer, acquired its interest in the Torrez mining complex when it took over International Corona in 1992. Homestake’s share of production from Torrez that year was 16,209 oz. gold and about 1.3 million oz. silver.

The Torrez complex, 250 miles northwest of Mexico City, entered production in 1976 with four underground mines. The complex, which features a central 2,500-ton-per-day concentrator, is operated by 33% owner Industrias Penoles S.A.; Cia Minera Fresnillo has the remaining 37% interest.

The official opening of Hecla’s La Choya open-pit, heap-leach gold mine in Sonora state, 30 miles south of the U.S. border, was staged in February. Hecla expects to recover about 200,000 oz. during the 3-year life of the mine. La Choya is Hecla’s first mining operation outside of Canada and the U.S.

Elsewhere in the same state, Minera Roca Roja, a wholly owned subsidiary of Walhalla, officially opened its Amelia heap-leach gold mine last November. Situated about 24 miles east-northeast of Magdelena, Amelia hosts minable reserves of 1.3 million tons averaging 0.088 oz. gold per ton (at a cutoff grade of 0.018 oz.). At a planned production rate of 30,000 oz. per year, Amelia has a 5-6-year lifespan. The company has a large land position at Amelia and is hoping to expand its reserves significantly.

About 2.5 miles to the southwest of Amelia sits the Santa Gertrudis gold mine, which entered production in late 1991. Phelps Dodge (NYSE) has a 49% interest in the mine, which yielded 52,500 oz. in 1992. Reserves at the end of that year stood at 6.8 million tons grading 0.072 oz.

Partners Eldorado and Campbell started up their heap-leach La Colorada gold project in Sonora state, 30 miles southeast of Hermosillo, late last year. Eldorado has an agreement to earn a 70% interest from Campbell (through Campbell subsidiary Minerales Sotula) in the project, which is expected to yield 22,000 oz. this year.

Buying a 33.3% interest in the Avino gold-silver-copper mine, 60 miles northeast of Durango, is Royal Bay Gold (VSE). The project belongs to Compania Minera de Avino, which is 49% owned by Avino Mines & Resources (VSE) and 51% by the Ysita family of Mexico. The deal calls for Royal Bay, Avino and the family to own one-third shares in the mine, which in 1993 yielded 6,280 oz. gold, 673,000 oz. silver and 653,000 lb. copper.

Large base metal producer Asarco (NYSE) is active on the Mexican mining scene through its 28.3% stake in Mexico Desarrollo Industrial Minero S.A., which owns and operates 13 mines in the country.

In production since 1992 is the 40%-owned Bismark zinc mine of Cyprus Amax Minerals (NYSE). Other owners of the Chihuahua state mine are Grupo Penoles, with a 40% interest, and venture capital company Promociones Industrials Banamex with 20%.

Exall Resources (TSE) reported in January that it had completed test mining on three areas of its Rio Yaqui placer gold project at Hermosillo. A production decision is awaited.