Mexico Snapshot: Eight juniors tapping into Mexico’s mineral potential

Despite patches of trouble in different regions of the country from time to time, Mexico remains one of the most favoured mining and exploration jurisdictions for Canadian and U.S. juniors. Here is a look at eight juniors active in Mexico.

AMERICAS SILVER

Toronto-based, Darren Blasutti-led junior silver miner Americas Silver (TSX: USA; NYSE-AM: USAS) has two operating mines in Mexico and Idaho plus a development project in Mexico, and ranks as one of the lowest-cost silver producers globally.

In Mexico, Americas Silver achieved commercial production in the fourth quarter of 2017 at its San Rafael silver-zinc-lead mine, which is part of its wider Cosala operations in Sinaloa State. In 2017, the company produced 940,000 oz. silver, 11.6 million lb. zinc and 5.6 million lb. lead at the mine, and has been ramping up production through 2018.

The junior notes that mining at San Rafael is proceeding at a planned 50% of reserve grade for the first 18 months of commercial output, so that silver production will increase noticeably through 2020 as head grades rise.

In Idaho, the company has its Galena mine and mill complex, which produced 1.14 million oz. silver and 20 million lb. lead in 2017.

For 2018 from the two mines, Americas Silver is guiding combined production of 1.6 million to 2 million oz. silver (or 7.2 million to 8 million equivalent oz. silver), versus the 2017 total of 2.1 million oz. silver (4.7 million equivalent oz. silver). Last year’s all-in sustainable cost (AISC) was US$13.11 per oz. silver, but Americas Silver is guiding an AISC of a maximum US$4 per oz. silver in 2018.

In Mexico’s Sonora State, Americas Silver has its San Felipe silver-lead-zinc development project — a high-grade past producer acquired by Hochschild in 2006, which spent US$45 million on the asset.

EVRIM RESOURCES

Vancouver-based Evrim Resources (TSXV: EVM; US-OTC: EMRRF) has a stated goal of becoming a “top exploration company operating under the prospect-project generator model, with an effective team, innovation, quality partnerships, sustainability and social responsibility.”

It is active in district-scale projects in key mineral belts in western North America: the Golden Triangle in B.C.; the Laramide porphyry belt in northwest Mexico and Arizona; and western Mexico’s Sierra Madre Occidental.

Its wholly owned, 232 sq. km Cuale high-sulphidation epithermal gold-silver project in Mexico’s Jalisco State has seen mapping, trenching, soil surveys, and geophysical surveys. Elsewhere in Mexico, Evrim has royalties on the Ermitano gold-silver property and the Cumobabi copper-moly-gold-silver property — both in Sonora.

Evrim has optioned its Sarape epithermal vein gold-silver property in Sonora to Coeur Mining and has optioned is Cerro Cascaron high-grade gold-silver epithermal vein property in Chihuahua State, Mexico, to Harvest Gold.

Between 2011 and 2018, $26 million has been spent exploring Evrim’s various properties, with partners funding 80% of the total.

EXCELLON RESOURCES

Brendan Cahill-led Excellon Resources (TSX: EXN; US-OTC: EXLLF) describes its wholly owned, underground Platosa silver-lead-zinc mine in Durango as having been Mexico’s highest-grade silver mine since production started in 2005.

Today, the Toronto-based company is focused on optimizing Platosa’s cost and production profile, finding more high-grade silver and carbonate replacement deposit mineralization on the Platosa project and epithermal silver mineralization on the Miguel Auza property, located 220 km south of Platosa.

Excellon says it also ready to “capitalize on the opportunity in current market conditions to acquire undervalued projects in the Americas.”

Excellon’s shareholders include Eric Sprott, Concept Capital, Sinigual, Sprott Asset Management, Global X, Notae Investments and US Global.

In July, Excellon updated the resource estimate at Platosa, tallying measured and indicated resources of 485,000 tonnes grading 549 grams silver per tonne, 5.6% lead, 5.9% zinc (or 1,055 grams silver equivalent per tonne) for a contained 8.6 million oz. silver, 59.8 million lb. lead and 63 million lb. zinc (or 16.5 million oz. silver equivalent).

MEXICAN GOLD

From its base in Thunder Bay, Ont., junior Mexican Gold (TSXV: MEX; US-OTC: MEXGF) is exploring its Las Minas gold project, which is located in the Las Minas mining district in Mexico’s Veracruz State, which the company says is “host to one of the largest, under-explored skarn systems known in Mexico.”

Led by president and CEO Brian Robertson, Mexican Gold has recently reported encouraging results from its 2018 exploration campaign, highlighted by: 5.11 grams gold per tonne and 7.15% zinc over 2 metres from an outcrop 7 metres southwest of the Guadalupe 3 mine; 5 grams gold over 2 metres at the Guadalupe 3 mine; 11.14 grams gold over 1.4 metres at Las Escondida mine; 4.06 grams gold, 32 grams silver and 0.72% copper over 1 metre at the Changarro mine; and 4.85 grams gold and 12.70 grams silver over 0.8 metre at a small mine below Changarro.

Robertson says that “our ongoing field exploration work continues to deliver high-grade assays from historical mines, as well as discoveries within the Changarro-La Perdida area. These results from several widely spaced localities show that the high–grade mineralization is extensive and appears to be structurally controlled, similar to the El Dorado Dike Contact zone.”

MINERA ALAMOS

Minera Alamos (TSXV: MAI) has two advanced, open-pit projects in northwest Mexico: the La Fortuna gold project in western Durango State, and the Los Verdes copper-molybdenum project in southeastern Sonora State.

The company has just done a positive preliminary economic assessment (PEA) of La Fortuna that shows a US$70-million, after-tax net present value, a 93% after-tax internal rate of return and an 11-month after-tax payback period.

This would be for a 1,100-tonne-per-day, five-year mine that would annually produce 43,000 oz. gold, 220,000 oz. silver and 1,000 tonnes copper at an all-in sustaining cost of US$440 per oz. gold.

Pre-production capital expenses for such a mine would total US$26.9 million.

Measured and indicated resources stand at 3.5 million tonnes grading 2.78 grams gold per tonne, 16.5 grams silver per tonne and 0.22% copper, at a cut-off grade of 1 gram gold.

“With an after-tax internal rate of return in excess of 90%, [the] excellent PEA results confirm that the La Fortuna project provides a robust base for the next phase of gold production in the company’s growth pipeline,” Minera Alamos CEO Darren Koningen said.

PROSPERO SILVER

Vancouver-based Prospero Silver (TSXV: PSL; US-OTC: PSRVF) is another Mexico-focused prospect generator whose aim is to “discover world-class precious metal projects” by applying a “unique blend of practical exploration experience and cutting-edge mineral deposit science to find new gold and silver systems.”

Of note, in April 2017, Fortuna Silver Mines committed to invest $1.5-million to fund Prospero’s drill programs.

In May 2018, Prospero raised $1 million in a private placement, with funds earmarked for the company’s project-generative exploration programs in Mexico, adding value to its existing property portfolio and other exploration expenses, and for general working capital purposes.

At the same time, a 3,000-metre drilling campaign got underway at Prospero’s Buenavista project in northwest Durango State, as the fourth project to be drilled under the agreement with Fortuna Silver, which was revised agreement in early May 2018, with a warrant exercise announced on May 7, 2018. As on the first three projects, the drill program is preliminary and intended to confirm below-surface structures and help the company determine where in the vertical epithermal column an orezone might lie.

SILVER BULL RESOURCES

Vancouver-based Silver Bull Resources (TSX: SVB; US-OTC: SVBL) is exploring and developing its wholly owned Sierra Mojada zinc-silver project located 150 km north of the city of Torreon in Coahuila, Mexico.

The project is part of a large land package consisting of 20 mining concessions totalling 47 sq. km in a historical, high-grade silver-lead-zinc mining district discovered in 1879.

Sierra Mojada has a National Instrument 43-101-compliant measured and indicated global resource of 58.7 million tonnes grading 3.6% zinc and 50 grams silver per tonne for 4.7 billion lb. zinc and 90.8 million oz. silver.

Silver Bull notes that within this resource, discrete, high-grade zones of silver and zinc mineralization include: a high-grade measured and indicated “Zinc zone” of 10.03 million tonnes at 11% zinc and a 6% cut-off, for 2.4 billion lb. zinc; and a high-grade measured and indicated “Silver zone” of 19 million tonnes at 102.5 grams silver per tonne at a 50-gram cut-off for 62.6 million oz. silver.

In August, Silver Bull closed a second tranche of a private placement for cumulative gross proceeds of US$3.8 million, with the funds to be directed to general working capital purposes.

STARCORE INTERNATIONAL MINES

Robert Eadie-led Starcore International Mines (TSX: SAM) says there are four reasons to be interested in the company: “production-oriented assets, low-risk and high-reward exploration projects, a focus on corporate social responsibility, and dedicated management.”

The Vancouver-based junior owns a range of assets across Mexico, the U.S. and Canada: the San Martin producing gold-silver operation in Queretaro; the Altiplano processing facility in Matehaula; the El Creston advanced exploration property in Sonora; and four exploration assets available for joint venture, which include Toiyabe in Nevada, Lone Ranch in Washington State, the Ajax molybdenum project in B.C. ,and the Molybrook project on the island of Newfoundland.

During the first quarter of 2018, the Altiplano facility received 407 tonnes of concentrate containing 1,249 oz. gold and 58,115 oz. silver, and Altiplano sold 1,219 oz. gold and 48,197 oz. silver.