Mexico Mining Forum 2024 PDAC - Impact Report

IMPACT REPORT

After five years of absence, Mexico returned to the Prospectors and Developers Association of Canada (PDAC) Convention in 2024 by the hand of Mexico Mining Forum, marking a significant reentry into one of the largest mining events globally. This return coincides with rising demand for minerals to support the energy transition, an area where Mexico boasts abundant resources.

While Mexico was once a premier mining jurisdiction, its attractiveness has recently taken a hit, dropping from the 28th in 2018 to the 37th position in 2023, according to the Fraser Institute’s Annual Survey for Mining Companies 2022.

Despite facing challenges, including political factors, Mexico is renowned for its abundant mineral resources, which are crucial for the energy transition. The country holds a prominent position in the production of 16 different minerals, most of them considered essential for the energy transition.

Recognizing Mexico’s pivotal role in the energy transition, industry stakeholders, from local governments to private companies, are actively exploring opportunities to maximize the country’s potential. Mexico Mining Forum 2024, held within the framework of PDAC, provided a platform for the sector to highlight Mexico’s key attributes and discuss how local governments can support streamlined mining processes. The forum brought together finance professionals and companies already operating in Mexico to provide a broader perspective to new investors and to help them learn from the experiences of more seasoned players.

Among other topics, participants emphasized that companies involved in mineral extraction should not overlook the environmental impact of these kinds of operations. Companies shared their insights on their approach to sustainable mining, including projects, results, and overall value generation for surrounding stakeholders. These efforts align with international standards and can potentially ensure a truly green energy transition.

277 companies

474 conference participants

Breakdown by job title

24.89% CEO/DG/CM

23.62% Associate/Executive/ Geologist/Engineer/ 20.25% VP/President/ Board Member

Director 13.92% Manager

Matchmaking

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The MBE App delivered AI-powered intent-based matchmaking to the Mexico Business Summit 2023 attendees

172 participants

142 matchmaking communications

50

1:1 meetings conducted

25 speakers

296 in-person attendance

Conference social media impact

9,607 direct impressions during MMF

12% click through rate during MMF

9.09% conference engagement rate

8 sponsors

5,379 visitors to the conference website

Pre-conference social media impact

67,233 direct pre-conference LinkedIn impressions

3% pre-conference click through rate

4% pre-conference engagement rate

Matchmaking intentions

366

Total

976

• 149MKM

• Achilles Information Limited

• ADC

• Adventus Mining

• AEM

• Aggreko

• AGI

• Agnico Eagle Mines Ltd.

• Alamos Gold Inc.

• Allnorth Ingenieria

• Almaden Minerals Ltd.

• Altum-Mining

• AM Exploration

• Amera Securities LLC

• Americas Gold and Silver Corporation

• Amvest Capital

• Aosenuma

• ArentFox Schiff LLP

• Argonaut Gold & newGold Minera San Xavier

• AtkinsRealis

• Austin Powder Mexico

• Avino Silver & Gold Mines LTD

• Baffinland

• Baker McKenzie

• BAn Co BASE

• Benzinga

• Buffalo Wire Works, Co., Inc.

• Bureau Veritas

• Business Consultants Mexico

• ByLSA DRILLIn G

• Caldera Drilling

• CAMIMEX

• CASTMET

• CEC Mining Systems Corp.

• Cereceres Estudio Legal SC

• Chihuahua Global EDC

• Cia Minera Peña de Bernal SA de CV

• CIBC

• Cles Fonctionnel Inc

• Clúster Minero de Sonora

• CMP group

• Co MInSA

• Consulate General of Mexico

• Consultant Senior

• Control Risks

• CTA

• Cyanco

• CyPlus Idesa

• DAVLo M MD

• DBR Abogados

• De Hoyos Aviles

• DEA Incorporated

• Defiance Silver Corp

• DETECTo R EXPLo RACIon ES S.A. DE C.V.

• Diamond Drilling Supplies

• Dias Geophysical Ltd

• Discovery Silver

• DMC Mining Services

• DRASLoVKA

• EC Rubio

• Eclipse Mining Technologies

• Electrum Copper Corp.

• Embassy of Canada in Mexico

• Emerson

• Empresas MATCo, S.A. de C.V.

• Empress Royalty

• Endeavour Silver Corp

• En ERTELECo M

• Engineers without borders Canada

• Epsa internacional

• Equinox Gold

• eResearch Corp.

• ESC-LLC

• Essco

• Evidencity

• E y México

• F & L Worldwide

• FIMSA

• Fleet Space

• FLSmidth Ltd.

• Foreign Investment and Trade Mexico Canada

• Forte Dynamics Inc

• Fortuna Silver Mines

• Frima

• FTI Consulting

• FullSpectrum Leadership Inc

• Fundación Minera de Chile

• Galicia Abogados

• Gambusino Prospector de México SA de CV

• Gap

• Gatos Silver Inc.

• GATX Corp

• GEA GRo UP MEXICo

• Genetec

• GEoSERVIX

• Global Service

• GLo BEXPLo RE DRILLIn G

• Gobierno de durango

• Gobierno del Estado de Zacatecas

• GoGold Resources Inc.

• Gold Resource Corp

• GoVER n MEnT o F THE STATE o F CHIHUAHUA

• Government of Zacatecas

• GR Silver Mining

• GroundTruth Exploration

• Grupo México

• Grupo Minero Panuco

• Grupo minero Ragosa

• Guanajuato Silver

• Halyard Inc

• Hecla Mining

• Heiras Abogados

• Heliostar Metals

• High River Services, LLC

• Impact Silver Corp.

• In CA AZTECA Go LD

• In CIMMET SA

• Inclusive Mining

• In DUSTRIAL MI n ERA SI nALoA

• Infinity Global Capital

• InfraVia Capital

• Insuco

• InTERA inc

• Intercam Financial Group

• InTER nATIonAL

BUSIn ESS So LUTIonS

• Investissement Québec International

• Jamieson Group

• Japan organization for Metals and Energy Security

• Just Refiners Mexico, S de RL de CV

• Kingsley Gate

• Kluane Drilling Ecuador

• Kluane Drilling LTD

• Kluane Drilling Mexico

• Kluane Drilling nicaragua

• Knight Piesold and Co.

• Kootney Silver inc.

• KPMG

• KP o Ventures

• Kuya Silver

• Lica

• LITH oS FIELD ConSULTIn G

• LKI Mining

• Loadscan Limited

• M3 Engineering & Technology Corp

• M3 Ingeniería Perú S.A.C.

• M3 Mexicana S. de R. L. de C.V.

• Maclean Engineering

• Madison Intelligence

• MAG Silver Corp.

• Mammoth Resources Corp.

• Manny Mining

• Maple Gold Mines

• Market news.

• Marsh Canada

• MATCo

• MC Law o ffice

• McKinsey & Company

• MCnet

• MDA

• Mecanicad

• Mhph

• Micon - Halyard

• Micon International

• Micromine

• Minas de San nicolás S.A.P.I. de C.V.

• Minaurum Gold, Inc.

• Mineit consulting

• Minera Frisco

• Minera La Paz

• Minerales de tarachi

• Minesense

• Mining Industry

• Mining Risks Advisors

• Ministry of Economy of Zacatecas

• Mining Plus US

• Monarca Minerals Inc.

• Monex

• Multisistemas

• Multisistemas de Seguridad Industrial

• Mundo Minero

• newFields Companies

• newFields Servicios de Mexico

• newmont

• n uricumbo + Partners

• ocean Partners

• odgers Berndtson

• orex Minerals Inc.

• orion Productos Industriales

• orion Resource Partners

• orla Mining

• oroco Resource Corp

• Pace Immigration LATAM Group

• Pan American Silver

• Parts Service Supply Co.

• PCG

• PhotoSat

• Polytechnique de Montréal

• Pontones & Ledesma, S.C.

• Pqa del Peru

• Prime Mining

• Prismo Metals Inc.

• Proactive

• ProActivo

• ProDeMin

• Purves Redmond Limited

• Quantec Geoscience

• Ragosa grupo minero

• RB MEXICo LAW

• Rcmp

• Red Cloud Securities

• RELyon n UTEC

• Responsible Mining Solutions

• Retired

• Revista ProActivo

• Reyna Silver Corp.

• Riverside Resources Inc

• Sánchez Mejorada, Velasco y Ribé, S.C.

• SCAn IA MI n In G

• Scotiabank

• Secretaría de Economía

• Servicio Geológico Mexicano

• Servicios y proyectos mineros de México

• SGS

• Silver Tiger Metals Inc

• Solensa

• Solum Consulting Group

• Sonoro Gold Corp.

• Speakap

• Spm

• SRA Steyn Reddy Associates

• Stansberry Research

• Stantec

• Stephen Paul de Wit P.Geol

• StevenDouglas

• STG Mining Supplies Ltd.

• Stonex

• supera world

• SyM technology

• Syensqo

• Tait Communications

• Tamarack Mining Services

• TBC&SK CIBERSEGURIDAD

• TBSEK

• Teck Resources Limited

• Tecmin servicios

• TEG

• Tehama Capital Corp.

• Tekio, Collective Intelligence Agency

• Tellus mining

• Terracore geo

• Tesolum Exploration

• THinK Best Practice

• Tn Mining

• Todd y Asociados, SC

• Torex Gold

• Toronto Global

• TRADUWEB International Translation Services

• Traxys Europe

• University of Texas

• UTEP

• VALPA I n GEn IERIA

• VERACIo

• Viarmosa International

• Virgen de la merced mining

• Vizsla Silver Corp.

• V-Max

• Willms & Shier Environmental Lawyers LLP

• Women in Mining Central america and Caribbean

• Wood Mackenzie

• Worley

• WSP

• Xcalibur Smart Mapping

• Zelkam - Rentar

• Zonge International, Inc.

08:30

MEXICO’S MINING OUTLOOK

Speaker: Karen Flores, CAMIMEX

08:45

WHAT ARE THE MAIN PRIORITIES FOR MINING COMPANIES OPERATING IN MEXICO?

Moderator: Karen Flores, CAMIMEX

Panelists: Armando Ortega, CanChamMx

Peter Megaw, MAG Silver

Javier Reyes, Luca Mining

09:45

10:15

11:00

MEXICO’S SECURITY OUTLOOK

Speaker: Jorge Tello, Madison Intelligence

NETWORKING COFFEE BREAK

MEXICO MINING INVESTMENT OUTLOOK

Moderator: Alfredo Phillips, Almaden Minerals

Panelists: Dean McPherson, TMX

Brodie Sutherland, Tocvan

Hernán Dorado, Guanajuato Silver Company Ltd.

David Rhodes, Luca Mining Corp.

Dan Dickson, Endeavour Silver Corp.

12:00

12:25

12:40

13:05

SONORA MINING OUTLOOK

Speaker: Margarita Vélez, Government of Sonora

ALAMOS GOLD – THE FUTURE OF THE MULATOS DISTRICT

Speaker: Scott Parsons, Alamos Gold

CHIHUAHUA MINING OUTLOOK

Speaker: Fernando Alba, Ministry of Innovation and Economic Development of Chihuahua

ZACATECAS MINING OUTLOOK

Speaker: Rodrigo Castañeda, Government of Zacatecas

13:30 NETWORKING LUNCH

15:00

SHAPING MINING’S FUTURE: ESG, SUSTAINABILITY AND ENVIRONMENTAL IMPACT PERMITS

Moderator: Ben Chalmers, Mining Association of Canada

Panelists: Tony Makuch, Discovery Silver Corp.

Chafika Eddine, orla Mining

Kenneth MacLeod, Sonoro Gold Corp.

Jody Kuzenko, Torex Gold

Michelle Robinson, Minera Camargo

15:55 RENTAR CASE STUDY

Speaker: Brian Livingston, Zelkam - Rentar

16:05

DURANGO MINING OUTLOOK

Speaker: Alfredo Miguel Herrera, SEDECo Durango

16:30 SOUTHERN COPPER CORPORATION EXPANSION PROJECTS

Speaker: Óscar González Rocha, Southern Copper Corporation (SCC)

17:00 END OF MEXICO MINING FORUM 2024 PDAC

19:00

MEXICO MINING FORUM NETWORKING COCKTAIL AT KENSINGTON BALLROOM OF DELTA HOTEL

MEXICO’S MINING OUTLOOK – FIRST LOOK AT MMF 2024 PDAC

Mexico holds a notable position in the global mining sector due to its abundant resources, longstanding mining culture, and untapped potential. Although the industry is among the most regulated and socially responsible in the country, it faces ongoing criticism and is often branded as a dirty sector. CAMIMEX, however, has vowed to show the true impact of mining as a social, economic and wellbeing driver in Mexico.

CAMIMEX comprises a total of 124 operational units representing approximately 90% of Mexico’s mining value. In 2022, most investment in mining activities came from Mexican companies at 57%, followed by the United States at 21%, and other countries at 14%. In 2023, there was a 3% global decrease in investment in mineral exploration. Despite this, Latin America maintained its status as a leading destination for exploration investment, accounting for 25% of the total. In Latin America, Mexico holds a prominent position in the production of 16 different minerals, securing the top spot in silver, second in fluorite, third in sodium sulfate and wollastonite, fourth in lead and celestite, fifth in magnesium sulfate, barite, and molybdenum, sixth in diatomite and cadmium, seventh in salt and zinc, eighth in gypsum, ninth in gold, tenth in copper, eleventh in kaolin and manganese, fourteenth in feldspar, eighteenth in graphite, seventeenth in iron, nineteenth in silica sand, and twenty-third in phosphate.

In 2022, Mexico’s mining activities were concentrated in key states, with Sonora leading at 31.4%, followed by Zacatecas

at 26.1%, Durango at 11%, Chihuahua at 10.2%, and Guerrero at 5.1%. The total value of national mining production in 2022 amounted to MX$316.9 billion (US$15.7 billion), marking a 5.3% decline from 2021. Gold, copper, silver, iron pellets, and zinc stood out as the top five minerals, contributing to 86.3% of the overall mining production.

The mining sector continues to play a pivotal role in Mexico’s development, contributing significantly to the nation’s economic landscape. In 2023, it constituted 9% of the industrial GDP and 2.9% of the national GDP. Beyond its economic impact, the sector provided essential inputs for 70 key industries and generated employment in 696 communities spread across 212 municipalities.

In 2023, the sector hired 417,380 people directly, with over 2.5 million indirect jobs added by December, creating 11,201 new positions. In 2022, the average wage in mining, based on IMSS data, exceeded the national average by 33%. Currently, 72,088 women work in Mexican mining, making up 17.3% of the total workforce according to IMSS figures. Tax contributions in 2022 totaled MX$72.9 billion, with income tax (ISR) comprising 79.6% of the total.

In 2022, the mining sector invested MX$5.8 billion in environmental conservation, representing 14% of SEMAR n AT’s budget of MX$40.8 billion. C on AGUA reported that the companies affiliated with CAMIMEX represent about 0.27% of the national

volume of water concessions. In addition, approximately 70% of water consumption came from treated and recirculated wastewater.

In 2022, there was a 13% increase in clean energy investment from mining companies compared to 2021. A total of 4,636GWh of energy from clean sources was produced and consumed by 42 mining operations, constituting 38% of the overall energy consumption. CAMIMEX stressed that a long-term goal for the chamber is to continue to drive high standards in ESG practices, especially in sustainability, workplace health and safety, and inclusion and diversity.

While CAMIMEX’s figures show the positive impact mining has in Mexico, the López o brador administration has criticized the sector for not being socially and environmentally responsible. The president has promoted several initiatives to limit mining activities in Mexico. o n May 8, the Mining Law was published in the o fficial Gazette of the Federation, aiming to reduce the duration of mining concessions from a maximum of 100 to 80 years. The text also establishes that exploratory activities are reserved for the State through the Mexican Geological Survey (SGM) or through assignments to entities of the federal public administration.

The Mexican Association of Mining, Metallurgy and Geology Engineers (AIMMGM), CanCham and CAMIMEX have expressed concern about the new law, especially about leaving exploitation in the hands of the government, as SGM lacks

the resources to properly carry out this activity. In addition, CAMIMEX warned that the Mining Law could cost the nation up to 420,000 direct jobs and US$9 billion in lost investment in the coming years.

o n Feb. 5, President López o brador presented another reform package, which includes a ban on open-pit mining permits and water concessions in places with low water availability. Pablo Méndez, Managing Partner, EC Rubio, told MB n that the proposed changes have increased concerns about investment from both domestic and international companies, despite Mexico’s prominent position as a leading global mining producer. Méndez stressed that, if the proposal is accepted, its impact would extend beyond copper projects, affecting gold and silver projects as well, as most of them are open-pit mines. Luis Humberto Vázquez, President, AIMMGM’s CD n , called on the sector to understand that the proposed reform cannot be enforced without thorough debate, however. Vázquez emphasized that, as the role of mining in the country’s development becomes clearer, it is likely that there will be modifications to the current Mining Law, as well as these new reform proposals.

Due to the lack of political certainty, CAMIMEX pointed out the sector needs greater collaboration with the authorities to promote mining and foster economic growth. With the next government, CAMIMEX aims to achieve several objectives, including the reactivation of concessions, exploration, legal certainty, competitive fiscal conditions, and collaboration with mining states on sector development policies.

MINING PRIORITIES IN MEXICO – FIRST LOOK AT MMF 2024 PDAC

While investment keeps coming to Mexico, mining companies are not without challenges. ESG, capital availability, licensing, and climate change still top the list of priorities for companies in Mexico. Digitization and innovation, cost and productivity, geopolitics, cybersecurity, green investments, and labor are also

added to the mix, while companies face political uncertainty due to changes in the Mining Law, new reform proposals, and the nationalization of projects.

Top ESG concerns for investors in 2024 are local community impact, waste and tailings management, water management,

net zero emissions, and diversity, equity, and inclusion. Most mining companies participating in an E y survey stressed that their ESG priority is to track and report performance to avoid mistakes, manage resources better and have better control processes in place. ESG success can lead to better access to capital, a healthier talent pool, and a stronger license to operate, reported E y

Capital has gained importance as the sector competes for investment and incentives to accelerate exploration and development of minerals crucial to the energy transition. Capital continues to flow predominantly into the iron and steel, gold, and coal industries. However, nickel and lithium are increasingly attracting investors, indicating a change in the investment landscape.

In terms of licenses to operate, mining companies are more focused on meeting the growing expectations of authorities and communities. However, the challenge is in defining what to prioritize and how to ensure that actions taken by companies have a lasting impact on communities.

According to E y, mining companies that maintain open and close communication with community leaders tend to have greater labor engagement and fewer strikes.

With climate change, miners face the dual challenge of supplying minerals for the energy transition and cutting greenhouse gas (GHG) emissions. In addition, more and more mining companies have realized the importance of preparing for climatic events that can affect the company’s production and the health and safety of workers.

Digitalization is another key priority for miners, as they hope to reduce costs and improve productivity. E y highlights that while many mining companies have a wealth of data, many still struggle to manage and capture information. In addition, many have become more exposed to cyberattacks, leaving their operations, personnel, finances, and assets vulnerable.

In addition to these risks, mining companies in Mexico face political uncertainty, as President López o brador promoted several initiatives to limit mining activities in Mexico. Among the main concerns of mining companies is the new Mining Law, which aims to reduce the duration of mining concessions from a maximum of 100 years to 80 years and give exploration exclusivity to the Mexican Geological Survey (SGM). Experts have expressed concern about the new law, especially for leaving exploitation in the hands of the government, as it lacks resources and expertise to tackle diverse projects. In addition, CAMIMEX warned that the Mining Law could cost the nation up to 420,000 direct jobs and US$9 billion in lost investment in the coming years.

Ramon Pérez, President, Luca Mining, acknowledged positive aspects of the Mining Law, such as its focus on indigenous and environmental concerns. However, he expressed concern over a perceived misunderstanding of the mining industry. The company advocates for a thorough revision of the law to avoid potentially detrimental effects on both the country and the industry.

Another concern has been the recent reform package, which includes a ban on open-pit mining permits and water concessions in places with low water availability. However, Luis Humberto Vázquez, President, AIMMGM’s CD n , has called on the sector to understand that the proposed reform cannot be implemented without in-depth debate. He also stressed that there will likely be amendments to the current Mining Law and new reform proposals.

Armando o rtega, President, CA n CHAM, acknowledged the challenging task of altering authorities’ and public perception of the mining sector, which has long been seen as a dirty and irresponsible industry. However, o rtega highlighted the unique opportunity for mining to showcase its role as a crucial partner for the country and the world due to its key role in the green transition.

MEXICO SECURITY OUTLOOK- FIRST LOOK AT MMF 2024 PDAC

A successful mining operation goes beyond technology and an efficient extraction process. Companies operating in Mexico must be knowledgeable about the security challenges facing the industry and how to address potential threats, highlights Jorge Tello-Peón, Director, Madison Intelligence Mexico.

Despite the government’s optimistic stance on the country’s security outlook, the reality reveals a significant surge in crimes like coercion, homicides, and cargo theft. The current administration, under President López o brador, has witnessed unprecedented violence, marked by over 180,000 homicides and territorial clashes among drug cartels.

“México’s security challenges are both severe and numerous, requiring immediate and enduring commitments. Present security measures address symptoms but fall short of addressing root causes”

Jorge Tello CEO and Founder | Madison Intelligence

CAMIMEX recently stated that criminal attacks against mining companies increase their operating costs by between 10% and 20%. The chamber adds that the figure could be higher considering that mining companies must invest heavily in personnel training and hire more security guards. o rganized crime employs diverse pressure tactics, including financial coercion and direct violence (threats and kidnappings), says Tello Peón. He added that, during the 2024 elections, various crimes have surfaced, including direct violence against candidates, vote manipulation, and organized crime influencing candidate positioning.

Luis Vázquez, President, AIMMGM, reported that some companies have even paid off criminal gangs, resulting in a 3% increase in the final cost of minerals. Vázquez added that states with a long mining history like Chihuahua, the State of Mexico, Guanajuato, Sonora, and Zacatecas rank among the states with the highest perceived insecurity.

Tello-Peón emphasized that the discrediting of institutions, along with government acts and omissions have contributed to this unfavorable landscape. In addition, criminal organizations often have stronger ties to communities, providing them with jobs, infrastructure, public services, and medicines, among other benefits. This has led individuals to consider circumventing established authorities or entering negotiations with organized crime, jeopardizing principles, people and operations in the long term.

“México’s security challenges are both severe and numerous, requiring immediate and enduring commitments. Present security measures address symptoms but fall short of addressing root causes,” says Tello-Peón.

Mining companies face not only the physical threats of in-person crime but also the increasing danger of cyberattacks. In 2024, cybersecurity reemerged as a significant concern for mining companies, marking its return to the top spots of the list of challenges faced by companies for the first time since 2020, securing the 8th position. E y attributes this resurgence to the digitalization of the sector, the surge in remote work, and geopolitical tensions such as the Russian-Ukraine war. Escalating concerns among mining leaders are centered around threats to their intellectual property, a concern expected to intensify with the increasing investment in ESG initiatives.

In 2022, Guacamaya hackers carried out a cyberattack that not only impacted public institutions, but also mining, oil and gas companies. In 2024, Alamos Gold also suffered a cyberattack that led to the public exposure of sensitive corporate data. In

response to the evolving landscape, key companies such as Torex Gold have elevated cybersecurity to a top corporate and operational priority, recognizing the urgent need for robust measures to protect against cyber threats.

Tello-Peón emphasizes the importance of having better strategies, recognizing that a one-size-fits-all approach is ineffective.

Tello Peón advocates for strategic solutions, such as forming alliances with mining clusters and chambers, utilizing social intelligence, accessing reliable data, fostering collaboration with authorities like SEDE n A, n ational Guard, and the government, implementing security prevention and reaction protocols, engaging in negotiation tables with authorities, and risk and crisis management strategies.

MEXICO MINING INVESTMENT OUTLOOKFIRST LOOK AT MMF 2024 PDAC

Mexican mining activities remain strong despite uncertainty. However, recent policy changes are starting to threaten investor confidence, based on the country’s investment competitiveness ranking and opinions from industry insiders.

Between January and September 2023, the mining sector received US$2.7 billion, accounting for 9% of the national FDI, as noted by the Ministry of Economy (SE). The current investment of US$2.9 billion represents a substantial increase of 123% when compared to the US$1.3 billion recorded between January and September 2022. Additionally, it is 11.5% higher than the US$2.6 billion registered during the same period in 2021. However, the figure is still 9.4% below the peak registered in 2013.

In 2022, Mexico went from ranking 34th to 37th in the Fraser Institute’s Annual Survey of Mining Companies featuring 62 mining countries and jurisdictions, making this Mexico’s worst ranking in the last 5 years.

Mexico’s performance dropped by 20.6 points in terms of policy criteria. Mining companies also reported increased concerns: in Mexico’s legal system (+13 points), disputed land claims (+10 points), and the government and existing regulations (+7 points). Mexico also ranked 20th out of 47 regarding the best practices for mineral potential. It also ranked 37th out of 62th in terms of quality of infrastructure, while placing 44th out of 62 in the political stability index.

The drop in investment confidence has been mainly attributed to the Lopez o brador administration, after putting the granting of new mining concessions on hold. The energy reform, the Mining Law, as well as new reform proposals such as banning open-pit permits and having stricter rules for water concessions have generated great uncertainty for companies and investors in Mexico.

Luca Mining stressed that mining companies invest in Mexico based on the established

rules of the game and that suddenly and unconstitutionally changing them hurts the country’s attractiveness. Similarly, Alfredo Phillips, Director, Almaden Minerals, considers that Mexico’s mining sector has enormous potential. However, he emphasizes that political stability is crucial for fostering investment. Phillips also highlights the importance of government decisions being based on science rather than misconceptions.

CAMIMEX’s Annual Report for 2023 shows that Mexican CAMIMEX members contributed 53.8% of the investments in 2022, while 32.7% originated from Canadian members. The United States accounted for 7% of the

investments, while the remaining 6.5% was distributed among different countries, positioning Canada as the foremost foreign investor in the sector. According to Canada’s Trade Commissioner Service, there are over 138 Canadian companies involved in the Mexican mining industry.

Despite the challenges, Mexico’s mining jurisdiction remains consistently strong. According to Dean McPherson, Head of Global Mining, TMX Group, the country is home to 124 projects, which represent over 10.33% of TMX Group’s listed companies. Mexico ranks among TMX Group’s top jurisdictions, closely following the United States and Canada.

SONORA MINING OUTLOOK - FIRST LOOK AT MMF 2024 PDAC

Sonora, a prominent mining state, has solidified its position as a national mining leader, accounting for over 30% of Mexico’s total mining output, according to 2023 data. With projects nearing the production phase, the state’s mining sector is poised to gain strength, opening up more opportunities for companies in the industry.

According to Margarita Vélez, Sonora’s Minister of Economy, the mining sector is a critical industry for the state, present in over 39 municipalities. In more than 23 of these, mining is the primary economic activity, accounting for 32% of the state’s municipalities. Furthermore, the sector generates over 140,000 direct and indirect jobs in the state. This is due to the presence of more than 12,650 suppliers, 20 large and mid-scale mines, 133 exploration projects, and four smelting and refinin g plants.

Sonora has a total of 6,142 mining concessions, with 1,693 currently canceled and the remaining 4,449 still active. o f the active concessions, 1,779 are being utilized, consisting of 1,423 under exploration and 356 designated as mining projects. The total land area covered by these concessions is 5,635,502ha, equivalent to 30% of the state’s territory.

The state currently operates 71 active mines that extract metallic and nonferrous minerals. The local government emphasizes that although Sonora boasts significant geological potential, interest is primarily focused on four key minerals: gold, which accounts for 45% of interest; silver, with 36%; copper, with 12%; and zinc , with 6%.

According to Leonardo Taylor, Sonora’s Director of Mining, the state contributes 31.4% of Mexico’s national production. The state leads in copper production, accounting for 75.6% of the national total, making it the largest copper producer in Mexico and the fifth-largest in the world. Sonora also ranks first in gold production in Mexico, contributing 25.7% of the national output. Additionally, it ranks second in barite production with 21.4% of the national volume, second in iron with 10.7%, and fifth in silver with 6.5%.

The Sonora government asserts that the mining sector is crucial for embracing the energy transition. This commitment is reflected in Plan Sonora, which focuses on sustainable energy initiatives. o ne such initiative is the Puerto Peñasco Photovoltaic Power Plant, which will cover 2,000ha and generate 1GW of energy. once operational,

it will be the largest plant of its kind in Latin America and the fifth largest worldwide.

Acknowledging that clean energy projects are widely spread all over the world, the state’s government believes the participation of the mining sector will be essential as minerals like nickel, lithium, and cobalt have been labeled as critical minerals. Furthermore, transmission lines and electric vehicles (EVs) will require minerals like copper.

According to the Sonora government, challenges and opportunities in the mining sector include the need to strengthen regulation. There is also a call to intensify exploration efforts in line with international standards for sustainable mining. The state also calls for operating mineral deposits responsibly and sustainably, along with expanding exploration to include a

broader range of critical minerals. Water consumption rationalization is a priority. Furthermore, there is a strong emphasis on developing a skilled workforce, supporting a conducive environment for investment, and streamlining permitting processes to assist projects through the necessary au thorities.

Safety remains a top priority in Sonora, with the state hosting the largest presence of security agencies from all three levels of government. This provides an additional layer of security to complement existing municipal agencies. Sonora is home to 11 operational quarters of the national Guard, with 2,200 personnel, and 19 state police operation bases with over 3,500 officers. Additionally, the Mexican n avy recently opened a new complex at the Libertad Port, further enhancing security efforts in the region.

ALAMOS GOLD’S SUCCESS IN MEXICOFIRST LOOK AT MMF 2024 PDAC

While some companies may be transitioning to other metals, Alamos Gold’s full bet on gold has been paying off. In 2023, Alamos Gold reported record gold production of 529,300oz, a 15% increase over the previous year. The increase in production was due to higher production at the company’s Mexican

asset, the Mulatos District, primarily from residual leach from the Mulatos leach pad. The Mulatos District produced 212,800oz in 2023 driven by the performance of La yaqui Grande in its first full year of production, showing 58% growth compared to 2022.

Exceeding the annual production forecast resulted in a significant increase in free cash flow from the Mulatos mine, reaching US$142.1 million. The company announced that the increase in high grade ore reserves at Puerto del Aire (PDA) is being integrated into a development plan scheduled for completion in 1Q24. This plan is expected to outline a substantial portion of Mulatos’ produc tive life.

The company forecasts an increase in production during the first half of 2024. Thereafter, recovery of ounces by residual leach is expected to gradually decline throughout the year. First quarter production is expected to be between 123,000oz and 133,00oz in 2023. By 2026, full year production is expected to increase

by 7%, ranging between 520,000oz and 560,000oz.

Alamos has allocated an overall exploration budget of US$62 million for 2024, representing a 19% increase from the US$52 million spent in 2023. Island Gold and the Mulatos district will share about 60% of the total exploration budget, with each asset being allocated US$19 million in exploration work.

Alamos emphasized the untapped mining potential within the 28,773ha Mulatos district, which remains largely unexplored. The combined mineral reserves of La yaqui Grande and PDA stand at approximately 1.5Moz. Through 2024, the company has explored 27km of PDA. Another notable exploration opportunity lies in the Capulin Target, situated 4km from the Mulatos pit, where wide and significant intervals of gold mineralization have been identified. o ver the past five years, Alamos has seen a 10% increase in mineral reserves, accompanied by a 9% rise in grades, net of 3Moz of depletion.

John McCluskey, President & CEo, Alamos Gold, previously shared with MB n that unlocking the geological potential of Mulatos has proven to be a complex process. While the initial exploration focused on easily identifiable surface alterations, geology has become more intricate over time. He cited PDA as an example, noting that it did not initially reveal itself as a deposit. However, through strategic drilling, the company uncovered its significant potential,

highlighting the need for sophisticated exploration techniques to reveal concealed prospects.

Despite the challenges, the company underscores its growing and long-lived production in n orth America, anticipating a reduction in production costs. With the ongoing development of PDA and Lynn Lake, Alamos aims for an annual production potential of 800,000oz, projecting an 11% decrease in All-In Sustaining Costs (AISC) by 2026, a substantial 46% decline in capital expenditure by the same year, and an average mine asset life of 14 years.

Boosting Green Production

Production results are backed by a strong ESG performance. The company is producing 38% less GHG emissions per ounce of gold than the industry average and achieving a 41% reduction in water use. The company aims to further reduce GHG emissions by 30% by 2030, positioning itself as a leader in ESG initiatives i n Mexico.

on the social front, Alamos has reduced its injury downtime rate by 63% since 2019 and it locally hires 77% of its workforce. In 2023, the company received the Silver Helmet Award from CAMIMEX for the second consecutive year, the Socially Responsible Company award from the Mexican Center for Philanthropy for the 15th consecutive year, and the Ethics and Values in Industry award from C on CAMI n for the fourth consecutive year.

CHIHUAHUA MINING OUTLOOK - FIRST LOOK AT MMF 2024 PDAC

Despite ongoing challenges, Chihuahua remains an appealing destination for mining companies. The state contributes 20.7% of Mexico’s mining output, making it the third largest contributor to the national mining industry. It also offers unique opportunities for mining operators, including access to a specialized security body and an extensive network of suppliers, making it a

strong contender among Mexico’s leading mining hubs.

According to CAMIMEX’s 2023 report, Chihuahua ranks as the state with the second-highest number of mining projects, totaling over 160. Mining plays a crucial role in Chihuahua’s economy, with the state’s mining production alone valued at

over US$2.4 billion in 2023. Mineral exports from the state also contributed significantly, valued at above US$441 billion. Additionally, Chihuahua received over US$143 million in mining FDI in 2023.

With more than 10 large-scale active mining projects, the sector serves as a key economic driver, employing over 10,000 individuals within the state. Chihuahua is Mexico’s second-largest producer of silver and lead with over 20.7% and 13.3% of the national production, respectively. The state also holds the third position in zinc production and the fourth in copper, accounting for 2.9% of the country’s total copper production. Additionally, Chihuahua is among the Top 5 gold producers in Mexico, trailing behind Durango, Guerrero, Sonora, and Zacatecas.

Chihuahua offers significant development opportunities as Mexico’s largest state. Its proximity to the US border enhances its connectivity, with an extensive road network linking major Mexican and US cities reachable within 12 to 24 hours by road. Additionally, the state is connected to highly efficient rail networks for heavyload transportation to US and Mexican ports, operated by companies such as Union Pacific, Ferromex, and B nSF.

Due to the state’s favorable conditions, several mining companies, primarily with

Canadian capital, have decided to establish operations there. Among the main mining operators are Agnico Eagle, Fresnillo, MRT, Pan American Silver, Gatos Silver, Sierra Metals, Grupo México, Coeur Mining, Minera Frisco, GoGold Silver & Gold, and Bergmann. Chihuahua’s geological conditions also attract junior mining companies and others with exploration projects in the state, such as Kootenay Silver, Fabled Silver Gold, Jinchuan, Silver Spruce, Fresnillo, Discovery Silver, Reyna Silver, Radius Gold, and Impact Silver. Additionally, Chihuahua’s supplier ecosystem comprises over 130 companies including Sandvik, ACEAseguridad Industrial, Austin Powder, IPEC Ingeniería, and CIMA Consultores Ambientales, among others.

Ensuring security conditions is essential for every business, including mining operations. For this reason, the state created the Mining Police to provide support to companies engaged in mining activities within the state. This task force consists of 35 state police officers specialized in guarding, custody, and follow-up of incidents related to mining. They are responsible for combating illegal mineral extraction, securing mining sites, and carrying out operations to protect mineral exploitation activities. The state has also developed curricula to serve the mining sector’s labor requirements, led by the Technological Development Support Institute (InADET) and the High Technology Training Center (CEnALTEC).

ZACATECAS MINING OUTLOOK - FIRST LOOK AT MMF 2024 PDAC

Zacatecas has a rich mining history and an extensive supplier network, making it a premier destination for mining investment in Mexico. As the country’s leading silver producer, among other metals, the state offers opportunities for growth and development in the mining sector.

Zacatecas stands out as Mexico’s top producer of silver, lead, and zinc, ranking second in copper production. The state contributes significantly to Mexico’s mining output, with 35.8% of the national silver production, 18.7% of gold, 62.8% of lead, 47.9% of zinc, and 9.2% of copper. Zacatecas is home to Mexico’s largest gold mine, n ewmont’s Peñasquito, contributing over 13% to the state’s GDP. At the same time, with an approximate value of US$888 million, Zacatecas generates 22.4% of Mexico’s mining production value.

Almost one-third of the state’s territory (31.7%) is designated as “concessioned land” for mining activities. The mining industry in Zacatecas employs 14,990 workers, making it the third-largest formal employment sector after trade and construction, while another 41,103 people are employed in mining-related activities (manufacturing industry). The state also has 16,493 students in STEM fields, supported by 59 higher education institutions and three universities with specialized programs in mining and metallurgy.

According to the government of Zacatecas, the state offers connectivity for mining operators, with over 146 mining units connected with fiber-optic in a 248-mile ratio. The state collaborates with the local Mining cluster (CLUSMI n ) and hosts research centers like the Mining Center in Ciudad Quantum. Furthermore, the state has specialized curricula in education institutions to meet the demand for mining professionals. In terms of technology, the government of Zacatecas reported back in March 2023 that the first vehicle for mining in all of Latin America was

assembled in Zacatecas: the MT-42 heavylift articulated vehicle.

Industry experts affirm that Zacatecas provides an optimal environment for fostering new business opportunities, particularly in the mining sector. Jason Simpson, CEo, orla Mining, said to MBn that the state boasts all essential resources for a successful mining operation, including a skilled workforce and a network of vendors, contractors, and consultants. o perating in a region with a well-established mining community generously supported by the state government adds to the favorable business climate.

While Zacatecas is a leading silver producer, an essential metal for the energy transition, the state has untapped potential in other minerals, hosting one of Mexico’s largest lithium and potassium salt deposits. According to information from the Ministry of Economy and the Mexican Geological Survey, there are 15 exploration projects primarily led by companies from Canada and England in the Zacatecas and San Luis Potosi region, known for containing lithiumrich salt flats.

Rodrigo Castañeda, Minister of Economy, Zacatecas, previously highlighted that having lithium and other minerals attracts companies with existing concessions. These companies are adjusting to the new mining law, which allows for publicprivate partnerships. He emphasizes that this activity would stimulate the economy in municipalities with lithium, strengthen supply chain linkages, and generate tax revenues from the emerging economic units within the sector.

According to information from the Ministry of Economy, Zacatecas has received significant foreign direct investment (FDI), making it a key player in the mining industry. From January 1999 to September 2023, Zacatecas received US$8.9 billion in FDI. Zacatecas’ GDP growth has been

driven by mining and manufacturing for the second consecutive year, according to preliminary figures from I n EGI. In 2022, Zacatecas reported a GDP of MX$221.026 billion, with the mining sector growing by 13.8% and manufacturing by 2.6%. The state’s economic strength is attributed to its efforts to position itself as a key economy in Mexico.

The Government of Zacatecas reports that mining leads exports per entity from 2021-2023, totaling US$4.57 billion and representing 43.3% of all exports. Mining also leads FDI, with US$2.93 billion from 2014 to 2023, representing 65.5% of all foreign investments in the state. Zacatecas has 12 active mining units and four projects: Chalchihuites, Pan American Silver; Sabinas,

Peñoles; San Martín, Grupo México; Fresnillo, Fresnillo PLC; Saucito, Fresnillo PLC; Juanicipio, Fresnillo PLC/MAG Silver; Cozamin, Capstone Copper; San José, Arian Silver; Camino Rojo, orla Mining; Peñasquito, newmont; Tayahua, Frisco; Aranzazú, Aura Minerals; San nicolas, Teck/Agnico; Cerro de o ro, Minera Álamos; Trópico, Radius Gold; and Valenciana, orex Minerals.

Back in February 2023, a cooperation agreement was established between the Government of Zacatecas, o rla Mining-Camino Rojo, and the Mexican Competitiveness Center (CCMX), aiming to generate a local economic impact of MX$400 million for mining sector suppliers. The initiative focuses on integrating and developing local suppliers, talent linkage, social responsibility programs, and comprehensive training and process improvement for local MSMEs, with access to financing and support as direct suppliers to orla Mining-Camino Rojo.

The state government has assured the industry that it will create the necessary conditions to instill confidence in the companies, as they are key drivers for development, well-being, and progress. This commitment includes maintaining favorable conditions for competitiveness and growth, offering investment incentives such as economic and tax benefits, providing comprehensive support for new companies, ensuring the development of a skilled and stable workforce, and enhancing logistical and industrial infrastructure.

SHAPING MINING’S ESG FUTURE - FIRST LOOK AT MMF 2024 PDAC

In the era of sustainability, mining faces the challenge of meeting rising mineral demands for the energy transition while minimizing environmental impact. In Mexico, mining companies are under scrutiny for their environmental and social practices. However, the sector often lacks effective communication skills to convey its responsible actions and ESG efforts. As demands for greater ESG responsibility increase, Mexican mining firms must

enhance their communication strategies to demonstrate their commitment to responsible mining practices.

o n Feb. 5, 2024, President López o brador presented a new reform package, including a ban on open-pit mining permits. The president seeks to no longer grant concessions for open-pit mining projects due to the negative impact on the environment and the adverse health effects

on communities living nearby. However, industry insiders consider the constant attacks on mining companies for alleged environmental damage unfounded, since the sector is one of the most regulated industries in the country and, therefore, one of the most responsible sectors regarding water use.

The mining sector has responded to overregulation by adopting widely recognized standards like Towards Sustainable Mining (TSM). While these standards are wellestablished in Canada, they are also gaining traction among Mexican companies.

Water Management

In Mexico, where many mining operations occur in regions with high water stress, mining companies have developed techniques to responsibly manage water usage. The industry currently utilizes over 0.35% of concessioned water in Mexico, with treated wastewater accounting for over 60% of its supply.

Companies have implemented techniques such as dry stacking, which reduces the need for large tailings dams and minimizes water usage. This method allows for the efficient recovery of water. Regarding tailings, companies have observed an average reduction of 30% to 40% in requirements for concentrators or dynamic leaching plants compared to traditional tailings deposit operations. With traditional methods, reliance on natural processes for water recovery often leaves a significant gap between recoverable water and the plant’s actual needs.

Carbon Footprint

In addition to water management, mining companies are leveraging technology to improve energy efficiency and reduce their carbon footprint. The adoption of renewable energy sources, such as solar and wind power, not only helps reduce greenhouse

gas emissions but also enhances the overall sustainability of mining operations.

For Tony Makuch, CE o , Discovery Silver, ensuring energy efficiency in a project is one of the initial steps in implementing ESG measures. Properly identifying a project’s energy needs enables companies to secure adequate power generation and transmission capacity, ensuring the project’s energy consumption is met. This approach not only supports the project’s operational requirements but also contributes to minimizing environmental impact and addressing potential liabilities.

Furthermore, by investing in renewable energy infrastructure, mining companies can align their operations with ESG goals and contribute to Mexico’s transition to a lowcarbon economy. Torex Gold, for instance, invested over US$5 million to develop an 8.5MW capacity solar plant in Guerrero for its Media Luna project. The company plans to deploy approximately 70 electric trucks and equipment at this site, improving not only the company’s environmental footprint but also its workforce’s safety.

While technology can play a crucial role in transitioning to more ESGcompliant operations, mining companies emphasize the importance of establishing collaborative platforms to engage effectively with local communities. This approach ensures a deeper understanding of community needs, facilitating meaningful participation in ESG initiatives and preventing unilateral decisionmaking. Chafika Eddine, CS o, o rla Mining, highlighted the company’s collaboration with local communities to identify social projects that extend beyond mining, which better suit the community’s needs. o rla Mining has developed poultry farm projects in partnership with local women and Sodexo. Additionally, by engaging with communities and the government of Zacatecas, the company has developed programs to protect local fauna and flora.

RENTAR’S REVOLUTION IN DIESEL PERFORMANCE OP TIMIZATION

In the rapidly evolving field of diesel engine performance optimization, Rentar emerges as a leading force in innovation and efficiency. With a focus on catalyzing improved performance while reducing operating costs and environmental impact, Rentar has established itself as a game changer in fuelbased industries, highlights Brian Livingston, President, Zelkam.

Rooted in a vision to transform the diesel industry, Rentar harnesses state-ofthe-art technology to optimize engine performance and lifespan. Through molecular transformation, Rentar’s innovative technology breaks down complex hydrocarbons into shorter, more efficient molecules, resulting in improved fuel efficiency and decreased emissions and engine wear. This scientifically grounded catalytic process has proven its efficacy across various sectors, from mining trucks to military vehicles.

A notable success story lies in Rentar’s collaboration with a prominent Latin American mining company in 2008. Through Rentar’s technology, the company achieved 6.5% fuel savings, translating into substantial cost reductions for the company’s fuel-intensive operations. Moreover, Rentar’s solution led to a 50% increase in engine rebuild lifespan, further strengthening the company’s bottom line.

The financial implications of Rentar’s solution are compelling, with a detailed analysis revealing significant returns on investment. For instance, an investment of US$650,000 in Rentar’s technology yielded an annual return of US$1.2 million for a mining company’s fleet of 93 machines, with a rapid payback period of just six months. Additionally, Rentar’s solution facilitated a substantial reduction of 3,000 tons of Co2 emissions annually, aligning with sustainability goals.

“Rentar’s solution is technologically advanced, pragmatic, and compatible with existing infrastructure,” highlights Livingston. Installation is straightforward, requiring minimal modifications to fuel lines, and certified by regulatory authorities such as CARB and EPA. Furthermore, Rentar’s technology seamlessly integrates with alternative fuels like biodiesel, offering versatility in evolving energy landscapes.

“Rentar represents a paradigm shift in diesel performance optimization, offering a potent combination of technological innovation, financial viability, and environmental stewardship. In an era marked by rising fuel costs and environmental imperatives, Rentar’s solution offers tangible benefits for businesses and the planet. With Rentar, the future of diesel is not just brighter—it is cleaner, more efficient, and more sustainable,” says Livingston.

DURANGO MINING OUTLOOK - FIRST LOOK AT MMF 2024 PDAC

The Durango government is actively seeking to promote investment in the mining sector to boost its contribution to the local GDP. This development not only stands to benefit the state’s economy but also supports the production of essential minerals for the ongoing energy transition.

Durango is a key player in Mexico’s mining sector, ranking as the third-largest hub of mining projects in the country. With over 128 mining projects within its territory, Durango closely follows Sonora, which boasts 282 projects, and Chihuahua, with 160 projects.

The state ranks as the second-largest gold producer in the country, contributing 13.5% of the national production. It is also the second-largest silver producer after Zacatecas, accounting for 21.1% of Mexico’s silver production. In addition, Durango is the second-largest zinc producer, with a 17% share, just after Zacatecas. Furthermore, the state ranks third in lead production, after Chihuahua and Zacatecas, contributing 9.4% to the national output.

The state stands out in non-metallic minerals, as it ranks first in bentonite, second in perlite, and third in marble and fluorite production. Durango also has deposits of gypsum, clays, limestone, sand, and gravel, which contribute significantly to the state and the country’s GDP.

Furthermore, the state has a consolidated mining cluster composed of several mining companies like Minera Mexicana de Avino (Avino Silver & Gold Mines), Minera Real del o ro (Argonaut Gold), Minerales La Concha, Minera Inde de Durango, Minera Plata del Sur (Southern Silver), Minera Mexicana La Cienega (Fresnillo), Minera El Roble (Industrias Peñoles), Minera Real de la Bufa (Luca Mining), Minera MCL (Unidad El Realito), Minerales del Prado (Chesapeake Gold), Primero Empresa Minera (First Majestic Silver), Industrial Minera Raya (IMIRSA), Minerales de Inguarán, Beneficio de Minerales Herimovi, Beneficios La Luz, Minera La Española, and Minera IGMAR.

Mining Projects need Investment

The state has identified promising mining projects requiring investment due to their untapped potential. o ne such project is the La Mesa project in Pueblo n uevo, Durango, which includes a mining concession (title number 231790) covering 400ha. Geological studies, along with extension estimates and sampling, suggest the project could yield 2 to 4Mt at 2-5g/t Au and 100150g/t Ag, aligning with grades seen in similar mineralizations in the Sierra Madre o ccidental. Infrastructure plans include a 250t/d beneficiation plant, a 750m airstrip, rest areas, offices, and improved access. The project is also working on connecting

to the electricity grid. It has a positive relationship with the local ejido community, actively rehabilitating access roads and preparing new routes for the airstrip and transformation plan.

Another project is Grupo Minermex’s La Lechuguilla project, which comprises 10 mining concessions covering 2,000ha. It includes two mines and a flotation-gravity metallurgical plant with a capacity of 90t/d. The mining camp can accommodate 50 people and features a heliport and an

airstrip. The project focuses on open-pit mining areas and currently operates a 50t/d beneficiation plant, with plans to increase capacity to 200t/d. Investment objectives for 2024 include doubling production at the metallurgical plant, increasing reserves through exploration, and commissioning a tailings dam with a capacity of 500,000t. The project also considers roads, expanding the mining camp, and purchasing additional mining equipment, with an anticipated investment of US$17. 5 million.

SOUTHERN COPPER EXPANSION PROJECTS - FIRST LOOK AT MMF 2024 PDAC

Aiming to harness increasing mineral demand, Southern Copper, a subsidiary of Grupo México has been heavily investing in consolidating its Mexican and Peruvian assets with over US$15 billion over the past decade. Its portfolio includes projects such as Buenavista Zinc and Pilares, in Mexico, as well as Tia María, Los Chancas, and Michiquillay in Peru. These projects are part of the company’s strategy to increase production capacity and meet the growing demand for minerals.

In Mexico, Southern Copper has made significant progress. The company reached full capacity at its Pilares project and began commissioning the zinc concentrator at the Buenavista del Cobre mine in Sonora in 2023. These projects are expected to contribute 44,000t of copper and 55,000t of zinc to Southern Copper’s mining productio n in 2024.

The Buenavista Zinc project, located in Cananea, Sonora, is a key focus for Southern Copper. The project involves the construction of a new concentrator with a production capacity of 100,000t of zinc and 20,000t of copper per year. o nce operational, this facility will double zinc production capacity and provide over 2,000 jobs at the operation site. The budget for this project is US$439 million, with the majority already invested.

The commissioning process for the new plant has reached 99% completion. Startup operations commenced in 1Q24, following necessary technical adjustments to the concentrator. Anticipated production figures for 2024 are promising, with expectations set at 54,500t of zinc and 11,900t of copper. Looking ahead, the plant is projected to maintain a robust output, averaging 90,200t of zinc and 20,700t of copper annually over the next fi ve years.

Another important project is Pilares, also located in Sonora, near La Caridad. Pilares is an open-pit mine with an annual production capacity of 35,000t of copper concentrate. This project is expected to significantly improve the average mineral grade, considering the expected copper grade of 0.78% in Pilares, compared to 0.29% in La Caridad. The development budget for Pilares is US$176 million, with US$145 million already invested. Pilares delivers copper to the La Caridad concentrator. The company aims to make Pilares another separate operation, part of Southern Copper’s project portfolio.

Peruvian operations

Tia Maria, located in Arequipa, Peru, plans to produce 120,000t of copper cathodes annually using environmentally friendly

technology. The project’s estimated capital budget is US$1.4 billion and is expected to create 9,000 direct and indirect jobs during its construction phase.

Los Chancas, located in Apurímac, is a copper and molybdenum porphyry deposit with estimated and indicated mineral resources of 98Mt of oxides and 52Mt of sulfides. The project aims to produce 130,000t of copper and 7,500t of molybdenum per year through openpit mining and processing. The estimated capital investment is US$2.6 billion, with operations expected to star t in 2030.

Michiquillay, located in Cajamarca, is a world-class mining project with inferred

mineral resources of 2,288Mt of copper. o nce developed, Michiquillay is expected to produce 225,000t/y of copper, along with molybdenum, gold, and silver by-products. The project requires an investment of approximately US$2.5 billion, with production expected to star t in 2032.

Southern Copper is committed to social and environmental improvements for local communities and is working with Peruvian authorities to address illegal mining activities. The company’s Peruvian projects are expected to generate significant economic opportunities and contribute to local development through job creation, taxes, and royalties.