MINING IN MEXICO — Placer Dome mining Mexican silver

As an international mining company, Placer Dome (TSE) has years of experience working in a variety of foreign countries. Today the company has mines and exploration projects all over the globe.

While Mexico isn’t featured anywhere near as prominently as Chile, Australia, and Papua New Guinea in the company’s growing list of mines and exploration projects, Placer Dome has owned a 49% equity interest in a mine project in the country since the mid-1970s.

But the main commodity produced at the Real de Angeles mine in the state of Zacatecas is silver, although significant quantities of lead and zinc as by-products are also produced.

Silver prices have been depressed and in decline for years, and the current price of US$3.75 per oz. reflects the world’s recessionary environment, ample metal inventories and increased government sales.

Placer Dome’s share of production in 1991, through associated company Minera Real de Angeles, was 4.1 million oz. silver at a total production cost of US$2.84 per oz. The mill feed was 2.9 million tons grading 1.73 oz. silver per ton, with recoveries of about 77%.

In view of lower metal prices, the long-term mining plan was modified that year to obtain better value by extracting the highest grades available, and by deferring stripping activity.

The project’s minable reserves at the end of 1991 were reported at 26.6 million tons grading 1.43 oz. silver, down considerably from 70.4 million tons a year earlier. Placer Dome notes, however, that potential exists for increasing reserves once an evaluation is completed of additional mining material.

As a result of this and other favorable changes, Placer Dome has stepped up the pace of exploration activity in Mexico. It recently opened a new office in Hermosillo, where a number of other majors and juniors are also basing their

exploration efforts.