Mexico Mining Review 2021/22 by Mexico Business Publishing

2021/22

Introduction After more than a year of COVID-19, Mexican mining companies have learned to work safely to avoid contagion and are returning to prepandemic production levels. Metal prices and demand are in an upward trend, suggesting a stronger 2021 compared to the year before. However, challenges continue to hamper the industry’s growth. Mexico is among the Top 10 producers of 17 minerals. The country ranks first in silver production, sixth in zinc, eighth in gold and ninth in copper. Mining is essential for the country’s development, representing 2.3 percent of national GDP and 8.3 percent of industrial GDP. Despite its great potential however, the sector’s attractiveness has been declining amid uncertainty during the administration of López Obrador following a complete halt in the granting of new concessions and constant pressure from the government regarding mining companies’ fiscal and environmental compliance. Authorities have also expressed an inclination for greater control over the sector and resources like lithium, which has worsened investment confidence, leading some companies to other jurisdictions perceived as mining-friendly. Despite the multiple challenges facing the industry, the sector is one of the main pillars of the Mexican economy and the country remains an attractive destination for projects. Its wealth of resources, mining culture and strategic geography make it a solid choice. In addition, through new technologies and the modernization of processes, the industry is becoming smarter, more efficient and more responsible. Although the lack of government support and an adherence among some companies to traditional operations have made the transition to Mining 4.0 slower compared to other mining countries, the sector is on the right track. Mexico Mining Review 2021 presents in-depth analyses, interviews and insights on the main challenges and opportunities facing the country’s mining sector, as well as the external factors that are shaping it. Recovering investor confidence, a change in the relationship between companies and the government, improving regulatory frameworks and the adoption of better technologies are among companies’ main concerns. However, if properly addressed, Mexico could further enhance its position as a major mining destination.

Table of Contents

Introduction

Mining Industry 2021

Finance & Investment

Exploration & Discovery Potential

Development & Innovation

Production & Optimization

Mining Industry 2021 Mining historically has been linked to the country’s advancement as it attracts investment and generates welfare, especially in remote or marginalized areas. However, a broader lack of knowledge among the public and some government authorities about the industry has compromised the sector’s development. Some authorities continue to believe that mining operations remain the same as 50 years ago, accusing companies of damaging the environment, negatively affecting communities and contributing too little to the country’s economic development. The reality is quite different: mining is one of the most regulated industries in Mexico and one of the best providers of opportunities. The entire sector has taken on the task of demonstrating these attributes to the general public and especially the authorities. There are also initiatives aimed at improving the strained relationship between the government and mining companies. However, these efforts have not yet yielded a legal framework that provides certainty and addresses the main concerns of miners. As global demand for minerals is expected to increase in the coming years to support the transition to a low-carbon world, Mexico has a great opportunity to benefit as one of the Top 10 producers of 17 minerals. However, the industry needs more incentives and better support to play a key role in the green transition as it strives to become a leading example of responsible mining.

Mining Industry 2021 7

Analysis Changing Mining Landscape Post‑Midterm Elections

Infographic The Mining Industry and the Midterm Elections

Conference Highlights How to Close the Gap in Mexico’s Mining Industry

Expert Contributor Miguel Lucero | Senator and President of the Senate’s Ordinary

Commission of Mining and Regional Development

View From the Top Ana Maria Gonzalez | President of WIM Mexico

View From the Top Efraín Alva Niño | Director of the Extractive Industries Unit at the Ministry of Economy

View From the Top Pablo Mendez | President of CLUMIN

View From the Top Jose Castro | Director of CLUMISIN

Analysis More Mining Needed for a Decarbonized World

Infographic More Mining Needed for a Decarbonized World

Expert Contributor James Rasteh | Founder of Coast Capital

View From the Top Steve Robertson | CEO of Infinitum Copper

Roundtable Which Metals Will Lead the Decarbonization Trend?

Expert Contributor Bradford Cooke | Founder and Executive Chairman of Endeavour Silver

Expert Contributor Armando Alatorre Campos | President of CIMMGM

Spotlight Torex Gold Gets Greener and Sets Ambitious Targets for 2021

Content Links

Mining Industry 2021 | 7

Changing Mining Landscape Post‑Midterm Elections President López Obrador’s MORENA party emerged from the midterm elections without its supermajority in Congress. The result was welcome news in the mining sector as a subsequent change in policy direction and greater stability were expected. However, the main concerns in the sector remain, including a general halt in granting of concessions and permits. “The change in political power will not lead to a change in the Mining Law in the near future. However, the outlook is positive for projects, as there have been significant changes in recent years. There has been less exploration in recent years but without a drastic drop,” says Craig Gibson, Technical Director of ProDeMin. On June 6, López Obrador’s coalition won 279 seats, divided among MORENA (197), PVEM (44) and PT (38). This is 53 seats short of a qualified or supermajority in the 500-seat Congress that would have allowed the administration to fast-track initiatives like an amendment to the Constitution. “It will no longer be so easy to make decisions without analyzing all the factors and actors involved. I think this will give investors more confidence,” says Ana Muñoz, Secretary of Women in Mining in Mexico. Despite the country’s potential and even after promising election results, the current environment has prevented the arrival of new projects and investments. Political factors, taxes, legal frameworks and security concerns are key to investors and these obstacles are forcing them to look at other countries, reported CAMIMEX. The Canadian Chamber of Commerce in Mexico (CANCHAM) believes that the lack of clear rules in policies and uncertainty were behind the 18 percent fall in Canadian investment in 2020. “Canada has billions of dollars waiting for the mining, energy, pharmaceutical and agri-food sectors. The investments are ready but until the investment climate in the country is improved, they will not happen,” says Enrique Zorrilla, President of CANCHAM. The country’s economic recovery and increased demand for minerals for the energy and automotive sectors have fueled investors’ interest in Mexico. However, investment uncertainty persists. “In 2021, other (negative) factors that are affecting the sector became more evident. It is no longer COVID-19 but uncertainty,” says the President of CAMIMEX, Fernando Alanis. He says a dozen companies are planning to invest elsewhere as regulatory and tax problems compromise Mexico’s attractiveness in the Americas. There have been some positives for foreign investment, nonetheless. Mexican authorities, for example, have introduced new initiatives in an effort to improve the industry’s situation. “We are working to provide a modern regulatory system that will reduce substantially the so-called bureaucracy,” Minister of Economy Tatiana Clouthier told MBN. However, actions such as MORENA’s initiative to nationalize the country’s lithium production, although it was withdrawn, sent the wrong message to the sector. “We were very concerned about some of President Lopez Obrador’s proposals. If a government can unilaterally break Read the complete article More about this topic

existing contracts and nationalize an industry, foreign investors will generally reduce or avoid investing in all Mexican sectors,” says Bradford Cooke, Founder and CEO of Endeavour Silver.

The Mining Industry and the Midterm Elections PARTY PARTICIPATION AFTER THE MIDTERM ELECTIONS

NUMBER OF DEPUTIES 0

100

150

200

250

300

252 79 49 44 24 23 12 11 6

50.4% MORENA 15.8% PAN 9.8% PRI 8.8% PT 4.8% MC 4.6% PES 2.4% PRD 2.2% PVEM 1.2%SP

51.7- 52.5%

Elected governors

Public participation in the elections

US$44.57

10 10 99

6.57

66 5 5

3.75

3 3

4.65

4.89

4.30

4.94

4 4

PT-MORENA-PVEM

Baja California

Víctor Castro

MORENA-PT

Baja California Sur

Rubén Rocha

PAS-MORENA

Sinaloa

Alfonso Durazo

PT-PVEM-MORENANA

Sonora

Miguel Navarro

PT-PVEM-MORENANA

Nayarit

Indira Vizcaíno

MORENA-NA

Colima

David Monreal

MORENA

Zacatecas

PT-MORENA

Michoacán

MORENA

Tlaxcala

Layda Sansores

PT-MORENA

Campeche

Evelyn Salgado

MORENA

Guerrero

María Eugenia Campos

PAN-PRD

Chihuahua

Nuevo Leon

PVEM-PT

San Luis Potosi

PAN-QI

Queretaro

Lorena Cuéllar

2.50

2 2

Samuel García

Sources: INE, Forbes, CAMIMEX and El Economista

2020 2020

2019 2019

2018

2016 2017 2018 2017

2015

2016

2014

2015

2013

2014

2012

2013

1 1 0 0

State

Alfredo Ramírez 4.63

billion invested over the past nine years

8.04

Party

Marina del Pilar

MINING INVESTMENT IN MEXICO (US$ billion)

2012

Mining Industry 2021 | 8

Infographic

Ricardo Gallardo Mauricio Kuri

Conference

Mining Industry 2021 | 9

Highlights

How to Close the Gap in Mexico’s Mining Industry Fernando Alanís President of the Mexican Mining Chamber

Tonatiuh Herrera Undersecretary of Promotion and Environmental Regulations at the Ministry for the Environment and Natural Resources

hile it is true that Mexico’s mining industry remains a major asset to the country, industry experts agree that it has lost some of its former sheen. By combating misinformation, establishing talks, protecting the environment

and sharing many benefits, Mexico can begin to close the gap and regain its gleam.

“Resources are the basis of the country’s development and, therefore, mining is fundamental. If we stop mining, other industries will collapse,” says José Jabalera, Director of Mine Development at the Ministry of Economy. Today, Mexico is a Top 10 producer of 17 minerals. The country

José Jabalera

ranks first in silver production but it is similarly important in the

Director of Mine Development at Ministry of Economy of Mexico

mining industry is also the fifth-largest economic activity in the

production of gold, fluoride, copper, lead and other minerals. The country as of 2020, says Fernando Alanis, President of Mexico’s mining chamber CAMIMEX. Since mining activity often occurs in remote areas, it can become an important lever for economic growth in these areas as well. “Mining can boost the economic reactivation of communities far away from cities. It is, therefore, an important part of Mexico’s development,” Jabalera says. Last year, the Mexican mining industry did not perform as expected and experienced some low points as a result of the global pandemic, a lack of granted concessions and governmental regulatory uncertainty, which slowed down investments. This resulted in having 24.1 percent fewer investments than in 2019, for a total of US$3.532 billion. “Mexico dropped from the 20th most attractive mining country down to 42nd place in 2020. The pandemic has had its effect, but investments have dropped by more than half since 2012,” says Alanis. He also agrees with other experts who concur that certainty is the keyword for improvement. Nevertheless, fostering certainty is much easier said than done. Efraín Alva Niño, General Director of Technical Support and Head of the Extractive Activities Coordination Unit of the Ministry of Economy, believes that spreading accurate information about the industry and its activities is of the essence. “Mining misinformation must be urgently addressed. Mexico has a world-class mining sector and our task is to convey that message to the public,” he says. Even though the country is competitive on

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a global scale, many remain unaware of the benefits the industry could bring and instead remain antagonistic toward any type of mining operations.

t an early age, I experienced the mining process in the mountains of the state of Durango. Accompanied by my grandfather, we searched for gold on the riverside. Years later, I have the opportunity to be a Senator and President of the

Ordinary Commission of Mining and Regional Development, one of the most important commissions in the Senate of the Republic,. The main role of the Mining and Regional Development Committee is the analysis and drafting of opinions for law initiatives and proposals with points of agreement presented by senators from the different parliamentary groups, international instruments and appointments that are referred to them by the presiding officers. They also receive communications related to proposals and concerns made by ejidatarios of indigenous communities, associations of small and medium mining producers, environmental organizations and business chambers. It is sufficient for the committee to agree on how to deal with

Mining Industry 2021 | 10

these matters, informing applicants of the activities carried out

Senate Mining Commission Readies New Agenda Miguel Lucero

Senator and President of the Senate’s Ordinary Commission of Mining and Regional Development

to deal with them. The legislative work of the Mining and Regional Development Commission during the LXIV Legislature has focused on the analysis of legislative proposals regarding the creation of government bodies, such as the Mexican Geological Service, the implementation of Free and Informed Prior Consultation, requirements for water concessions and the analysis of proposals to grant powers to issue sanctions to the Ministry of the Economy and the Ministry of the Environment and Natural Resources. Although the population does not have a defined position on mining, in recent years, various nongovernmental organizations and indigenous communities have spoken against mining activity, mainly because of the violation of their right to be consulted on extractive projects on their properties or areas of influence, particularly for open-pit mining projects. Trends in environmental protection and conservation have led to legislative proposals with a focus on sustainable development, which provide a new perspective on what the new Mexican mining industry should be, with a focus on citizen participation, care for the environment and social responsibility toward the communities. We are about to begin the LXV Legislature, where the Mining and Regional Development Commission will analyze initiatives on mining in Protected Natural Areas, the implementation of free and informed prior consultation in mining projects and proposals for the digitalization and streamlining of procedures. In addition to the redistribution of the Mining Fund in which, through the construction of better policies and legislative proposals, legal norms are endorsed that allow for the promotion of scientific research and technological innovation in mining. To this end, the members of the Commission on Mining and Regional Development are prepared to undertake a priority agenda, in which the open parliament will be crucial for decision-making, including the participation of mining experts, academics, small and medium-sized producers and environmental

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organizations, as well as the labor sector and all those involved in the matter. This will be done with the aim of shaping a legal framework of international standards toward more sustainable development that allows us to find a balance between industrial viability, social, labor and environmental responsibility.

VIEW TOP Mining Industry 2021 | 11

from the

Q: What is WIM looking to achieve in the mining industry? A: Our contribution to the mining industry is to show what women can do in the sector, since women can do as much as anyone else. Therefore, we promote women’s roles, their contribution and all the benefits that are obtained when there is a more equitable work environment. When I started working at the mining industry in 1992, it was not common to see women in the industry. Only 2 percent of workers in the sector were women. Thanks to our constant promotion, that number has increased to 16 percent and we now see women taking on many jobs, playing an active role as drivers, engineers and CEOs. Q: What are the main barriers that women face in Mexico’s mining sector? A: The biggest challenge we face is our macho culture, where it is thought that only men can perform certain jobs or tasks. This has made it difficult for women to imagine themselves in a hostile environment such as mining. We have to change this mentality, especially in men, so that they understand that women can also perform their tasks. This is a complicated challenge because it is difficult to help men adapt and help them see that this is not a competition between women and

Ana Maria Gonzalez

men but an alliance, where both genders can work together and complement each other. Q: What progress has been made toward

President of WIM Mexico

the inclusion of women in mining? A: Mexico has made progress. Today companies employ more women because they understand that women can contribute as much as men. There are also women who now hold high

Impact of Women in Mining Grows

managerial positions in Mexico and we are very happy to see that every year more women are incorporated into the sector. However, one of the problems we see is that when women occupy higher positions, for instance, as a country manager, some men do not follow their orders because many doubt a woman’s ability to do the work. To understand how the entire industry is improving conditions for women, we collect data and monitor the progress of our members. This allows us to identify problems and to help provide a solution. There are still some factors that could be improved but I think making women feel more accepted and welcomed in a male-dominated industry has been a great success. Q: How do you think the Mexican mining industry will progress in the coming years regarding gender equality? A: I believe the mining industry will continue to improve its policies as well as the working environment for women. We will continue to be a key partner for the industry and the government to achieve a more inclusive sector.

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For this year, we will work closely with mining companies and CAMIMEX to attract more women to the sector and improve their working conditions. There is a long way to go, but there is no doubt that we will achieve a more equitable industry.

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from the

Q: Why is mining a fundamental industry for the development of Mexico? A: In Mexico, mining has always been a highly important industry. During the colonial period, one factor that set our country apart from other countries was the availability of precious metals, such as gold and silver, which have remained relevant to this day. The industry has maintained its economic relevance to this day, comparable to Mexico’s oil and gas industry. However, contrary to oil and gas, which are on decline, mining has remained at the forefront because of its importance to many other industries. Q: How can Mexico improve its position as a mining investment destination? A: The lack of legislative certainty has kept investors on edge. The legislative situation in our country must be improved through the provision of more information. Data must be available to all people, from common citizens to the highest-level officials. We have seen a trend in social media where there is a great deal of misinformation concerning mining. I would like to urge mining companies to make a greater effort to communicate what the mining industry is and the many benefits it provides. We need people to understand that the mining industry is a responsible and highly competitive sector; we have always

Efraín Alva Niño

aimed for sustainable mining. The mining industry in Mexico is world class and it is much more inclusive than it was a 20 years ago. The industry is changing for the better.

Director of the Extractive Industries Unit at the Ministry of Economy

Q: What steps is the Mexican government planning to take to reduce investment risk and remove legal and regulatory hurdles? A: We are working on facilitating the exploration of lithium,

Mining Needs Better Communication Strategies

considered “white gold.” Our job is to ensure that everybody gets the correct information. Ultimately, our goal concerning lithium is to keep pushing for thorough exploration campaigns. There are already existing permits but we are looking for more potential areas and encouraging their exploration. Another important aspect is the 2013 Tax Reform that disallowed tax deductions during the first year of exploration. This is the reason behind the 40 percent drop in exploration investment. We are working on a proposal with Economy Minister Tatiana Clouthier and CAMIMEX. We are looking to improve the exploration phase for companies, as well as exploring the possibility of reducing the amount of taxes and implementing other incentives. Q: What is the outlook for mining concessions and permits? A: Unfortunately, there is a presidential order to stop mining permits. However, and this is where we come in, while we understand that there will be no new mining permits for the time being, we are asking the government to allow us to work on the ones we already have. We need to oversee current exploration

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programs, which are very complex. Mining exploration takes years and sometimes they do not represent any viable resources, meaning that the exploration investment could be lost. That is why we continue to make an effort to reduce the risks related to mining exploration investment.

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from the

Q: What is CLUMIN’s role in attracting and preserving foreign mining investment? A: Suppliers, mining companies and government officials make up the cluster. Our objective is to push supplier development by attracting investments. By generating additional investment and building more mines, we end up having more suppliers. We work alongside state officials to promote our state to foreign investors. Chihuahua remains a Top 5 state in all metal production. Ahead of the June 6 legislative elections, we spoke to all the candidates about the importance of mining while listening to their proposals. We want mining to be included in their economic projects. Q: What are the main challenges that companies in the state face? A: The main challenge that we have detected is communication with government officials. The cluster is a group of people who help each other. That meaning that when the mining industry needs certain policies or economic development, we come together and we come up with solutions to achieve our goals by establishing communication networks with the government. Another challenge is to continue attracting investment. Chihuahua requires investment to develop more mining projects and further develop the supply market.

Pablo Mendez

Q: How did the pandemic affect mining companies that belong to the cluster? A: The pandemic opened many doors in terms of the various

President of CLUMIN

ways to conduct business. For instance, the advantage of having a training course online meant that many more people could attend without having to interrupt their activities. Despite these breakthroughs, the pandemic certainly affected the industry, especially in regard to labor. The mining industry relies heavily on

Pushing Chihuahua’s Supplier Development

manual labor. When more than half of your workforce is unable to work, your entire operation is compromised. Thankfully, we are seeing that the pandemic is ending in other countries and we hope that Mexico is not too far behind. Q: What makes Chihuahua a great state to invest in mining? A: Chihuahua has many top-of-the-line mining suppliers. The geological situation is a big plus for the state but what sets Chihuahua apart from other states like Sonora, Guerrero and Zacatecas is that Chihuahua remains unexplored, which will lead to more medium to large-sized mining operations. In addition, in 2010, mining companies depended on out-of-state and sometimes out-of-country suppliers. Q: How has the cluster worked with members and nonmembers to develop the market? A: We work alongside suppliers, and we promote their services with the objective of increasing supplier development. We really push for supplier growth and expansion. We also have training courses catered to our suppliers. Out of our 135 suppliers, the

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majority are equipment suppliers. These are the companies that get the most benefit out of our courses that range from security, environmental and economic development to finance and legal. We also hold business-to-business meetings, where we connect a mining company directly with a supplier.

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from the

Q: What is CLUMISIN trying to achieve in Sinaloa and its mining sector? A: The Sinaloa Cluster wants mining to be seen as an essential industry and to be recognized for its important impact the state’s development. To that end, we have made a great effort within academia to promote the sector and its benefits. Previously, the Autonomous University of Sinaloa did not have a specialized career for mining engineers but through a strong alliance, we were able to create engineering careers. We are contacting schools to raise awareness about the opportunities that exist if more specialized careers for miners are opened. Q: What is CLUIMISIN doing to attract more investment to Sinaloa? A: We have around 20 mining projects in the state that are the engine of development and an important source of jobs for Sinaloa. Lately, we have witnessed an increase in investment in the state that has much to do with the reduced contagion rate of COVID-19 cases. In 2020, the pandemic greatly affected the mining sector, especially due to the lockdowns and its label as a non-essential industry. However, it looks like mining companies will have a better year in 2021. Mining is an important industry for the development of Mexico

Jose Castro

and I firmly believe that greater investment attraction requires greater governmental support. Some of the statements and policies issued by the federal government, as well as the closing of the Undersecretary of Mining, have been severe setbacks

Director of CLUMISIN

for the industry. These actions have sent a negative message about the industry, suggesting that it is not as important as other sectors. Fortunately, some authorities have recognized the importance of mining and the benefits it brings to the country.

Sinaloa Strengthens Its Mining Ambitions

Q: What are your members’ main concerns and how are you working together to address them? A: The main concerns have been the governmental policies that have hindered the sector, such as the suspension of concessions and the dismantling of the Mining Fund. We have tried to hold discussions with officials and to propose solutions to improve the situation. It has been said that taxes will go to the Ministry of Education, so the cluster has advocated that this money be allocated to host communities so that they can obtain greater benefits. The institutions that grant permits are also a concern because they have not started working on a full-time basis. Additionally, with the pandemic, the permitting processes take longer. As a cluster, we are working to provide certainty. We are advocating for the rights of the sector and to change its negative image. Q: What support is the cluster receiving from the state and federal governments? A: The government of Sinaloa has provided great support because it is in favor of mining. We are also in contact with the federal government, although the decisions and opinions of the president have a great impact on the sector. Despite this, we have a good relationship with the federal government. We

hope that the proposal of Minister of Economy Tatiana Clouthier to hold mining roundtables will result in greater cooperation and union between the sector and the government. Q: What impact do you think the midterm elections will have on the mining sector? A: The cluster and mining companies need to have a better relationship with the new government, while voicing the current state of the industry and the opportunities that exist. Normally with the changes in government, there is also a change in mining management. We would like that the person in the government who fills this position be someone who knows and is interested in mining. The government has a lot of weight in the development of the sector and the investments that may come to Sinaloa so we hope to have an open government that seeks to continue promoting mining activities. Q: What benefits do companies gain from joining the cluster? A: We are the connection between government officials and mining companies. We offer webinars and workshops to promote responsible mining. Likewise, when a mining company comes to us with a specific concern, we provide a solution through expert training. As a cluster, we can easily contact industry and government leaders. In addition, we have a job board for people interested in working in the industry, which is an additional service for our partners to help them find specialized labor in our state. Q: What training does the cluster provide to implement responsible mining practices? A: Sinaloa has associations like “Accionarse” that promote responsible practices. We also meet with mining companies and provide them with advice on how to be more socially and ecologically responsible. We look for solutions that can adapt to our mining companies because we know that the majority of our companies are small and medium-sized and, therefore, they do not have a large budget for ESG programs. We can also help them with all the governmental procedures. I believe that our greatest challenge in the implementation of responsible practices is our culture. Canadian companies come with this chip of responsibility because they know the consequences that can result from poor management. In Mexico, people need to place greater emphasis on the care of the environment and the implementation of responsible practices.

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Mining Industry 2021 | 16

More Mining Needed for a Decarbonized World Mining is playing an integral role in greening the world. It is a role that will only gain in prominence in the transition to a low-carbon environment given the demand for certain minerals in green technologies. Although clean technologies use a variety of different components, they all share a common characteristic: higher material intensity against fossil fuelbased electricity generation. This means that the use of renewable energy will drive the demand for minerals as they are better at producing and storing electricity. According to the World Bank, mineral demand for clean technologies is expected to continue rising until 2050. Wood Mackenzie says the mining industry must invest US$1.7 trillion over the next 15 years to be able to supply enough metals for this green shift. Among the new uses for mined minerals are the production of EVs and structures or components used to generate electricity, such as photovoltaic cells, magnets or motors in wind turbines. For some minerals, especially those used for storage technologies like lithium, demand is expected to increase by 500 percent by 2050. Other minerals, such as copper, are not expected to see such a large increase but their demand will continue to increase over time. Other factors that are expected to bolster mineral demand are power generation and energy storage needs, particularly when political decisions come into play and innovation. Despite the many opportunities that will emerge for mining from this green shift, there are also some risks. First and foremost, environmental and social challenges need to be addressed to ensure that increased demand does not affect the responsible practices that have been implemented in the sector. A report by Fitch Solutions forecasts that silver, copper, nickel, aluminum, lithium and cobalt will be among the commodities that will be boosted in the next 20 years due to their use for green and digital transitions. While some minerals like copper, nickel and aluminum have well-established industries, other segments like lithium and cobalt are expected to strengthen and mature as demand increases. Currently, Mexico ranks among the Top 10 countries in the production of 17 minerals. According to CAMIMEX, Mexico ranks first in silver production, eighth in copper and ninth in gold, which puts it in line to benefit from this green boom. Moreover, the country also has a major lithium project from Ganfeng Lithium and Bacanora Lithium that is expected to start operations in 2023. Mexico not only has the important task of taking advantage of the large amounts of green metals that it has in its territory but also of ensuring that production remains responsible. “The world needs the help of the mining sector to achieve its sustainable goals. The sector has been promoting a structure more oriented to sustainable development, Read the complete article More about this topic

taking care of the environment and people,” said Sergio Almazán Esqueda, President of the Association of Engineers, Metallurgists and Geologists of Mines of Mexico (AIMMG).

More Mining Needed for a Decarbonized World TABLE 1: EXPECTED DEMAND FOR MINERALS FROM GREEN TECHNOLOGIES (thousand tons)

If the world wants to go green, it needs more mining production, especially of minerals considered essential to the green revolution. “Over 3 billion tons will be

2018 annual production

2050 projected annual demand from energy technologies

2050 projection as % of 2018 production

1,200,000

7,584

Aluminum

60,000

5,583

Chromium

36,000

366

Copper

21,000

1,378

sector not only has the task of meeting growing demand

Manganese

18,000

694

but of doing it responsibly.

Titanium

6,100

3.44

Lead

4,400

781

Nickel

2,300

2,268

ACTIONS THE MINING INDUSTRY NEEDS TO TAKE

Graphite

930

4,590

494

Invest nearly

Molybdenum

300

Cobalt

140

644

460

Lithium

415

488

in the next 15 years

Vanadium

138

189

Produce more than

Silver

Neodymium

8.4

0.75

1.73

231

Mineral

lron

lndium

required by 2050 to deploy sufficient wind, solar and geothermal power, as well as energy storage, to have a chance of limiting warming to 2°C by 2100,” reported Reuters. Fitch Solutions forecasts that the commodities that will be boosted the most in the next 20 years are silver, copper, nickel, aluminum, lithium and cobalt. Now, the

US$1.7 trillion

3 billion tons of minerals and metals

Source: World Bank

MINERALS WITH RELEVANT LOW-CARBON TECHNOLOGY APPLICATIONS Carbon capture and storage Gas Coal Nuclear Energy storage Geothermal Hydro Concentrated solar power Solar

Zinc

Vanadium

Titanium

Silver

Nickel

Neodymium

Molybdenum

Manganese

Lithium

Lead

Iron

Indium

Graphite

Copper

Cobalt

Chromium

Wind Aluminum

Mining Industry 2021 | 17

Infographic

t a time of unprecedented monetary expansion and inevitable currency debasement, it is surprising to note that gold miners, despite their very high margins and cash flows, happen to trade at all-time low valuations, and in many

cases, all-time low share prices. The investment case becomes even more compelling when one considers that the world is running out of gold reserves, which means that miners with attractive assets are more valuable than ever. Demand for gold is at an all-time high and increasing, driven

by growing middle classes in countries such as China and India and central banks in emerging markets. The latter hold only 5 percent of their reserves in gold, compared with 15 percent or more for their Western counterparts. As emerging market central banks catch up with their Western counterparts, they could account for the entirety of the world’s gold production

Mining Industry 2021 | 18

for the next 20 years.

The Case for Gold and Gold Miners James Rasteh Founder of Coast Capital

Supply of gold, on the other hand, is declining, due to dwindling new discoveries. While the pace of exploration has increased 200 percent over the past 20 years, the amount of gold discovered has declined by 95 percent and the quality of the gold discovered is often exceptionally low. This means that for the first time in history, we have entered a period of adinfinitum declining production – 10 years from now, the world will produce 50 percent less gold than it does today. The unprecedented demand/supply imbalance and the declining production beginning in 2020 are accentuated by the explosion in monetary supply, which inevitably leads to higher gold prices over time. Like a bucket of water that has been placed on high heat, we expect the price of real assets that are in finite quantity, like gold, to heat up in the coming years. Meanwhile, we are likely to see another US$1.5 to US$3 trillion increase in money supply in the coming months. This has breathtakingly positive implications for the price of gold, and gold miners. Gold mining is the most profitable industry in the world and began the year with 20 percent operating margins. Since then, margins have more than doubled, due to an increase in the price of gold as well as a decline in production costs, which consist mainly of energy, raw materials and labor in local currency. The average gold miner is currently four times as profitable as the average S&P company, yet it only has 1/3 the valuation. Coast Capital believes that there is no more attractive industry to invest into. We believe that the gold mining sector outshines all other investment candidates facing value investors (in light of the very low valuations and world-class margins), as well as eventdriven investors (in light of the wealth creation that is all but guaranteed to come to pass as the major operators are forced to buy, for important premia, their smaller counterparts) or macro investors (in light of the generational expansion rates in monetary supply).

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Needless to say, the best opportunities go to investors who have geological and operational expertise in the sector, and the best investors also work to improve their invested companies’ impacts on their local communities, and the environment.

VIEW TOP Mining Industry 2021 | 19

from the

Q: Why did Infinitum Copper decide to focus primarily on acquiring and developing world-class copper assets? A: The timing for Infinitum Copper is really perfect as copper is essential to achieving a low-carbon world, with the goal of replacing diesel and other petroleum products with greener alternatives. I believe that the future of the industry, society and our lives will depend heavily on copper, as there is no other replacement for it. Perhaps silver could be an option, but it is more expensive. As a result, copper will be the metal that leads the world’s green transition. Q: How is the company influenced by the current copper market environment? A: It is certainly a good time to have quality copper projects. Companies well positioned with the right people and projects in the industry get a lot of attention when the price of copper rises. We have a fantastic opportunity with our Adelita project. Its exploration potential is great and in the current bull copper environment, we believe it has the potential to become a major project in Mexico. Q: What were the main factors that the company considered before acquiring the Adelita project?

Steve Robertson

A: Adelita is a carbonate replacement deposit (CRD) system that is related to a known mineralized porphyry that provided metal-laden fluids to create mineralization in the area. This is a project well known to Peter Megaw, who is an expert in

CEO of Infinitum Copper

CRD’s. Megaw was very excited about the Adelita project, so we acquired it and now he is helping us develop and execute our exploration plans. Q: How does the company ensure a good relationship

Copper to Lead Low-Carbon Transition

with nearby communities and state authorities? A: When we decided to start this project, our first step was to communicate with the local community. We have Jorge Rafael Gallardo, who is a fantastic project leader. He was born in the area and has lived there his entire life, so he is the right person to communicate with the locals. We are really interested in understanding their needs and concerns, as well as explaining our plans to them. Regarding state authorities, Sonora is highly dependent on mining, and as a result the government officials are very experienced and competent in their jobs. We feel very comfortable working in Mexico and especially in Sonora. Q: Why do you consider the Adelita project to be a world-class asset? A: Adelita is a world-class asset primarily because of the scale of its system. One of the previous operators drilled the skarn altered zone about 300m depth and remained in the skarn alteration and mineralization, showing the great extent of

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the system. We are also a couple of kilometers from the edge of the intrusive source and we are still in the first part of the system, which also demonstrates the strength and longevity of the system. These two characteristics generally result in large and rich deposits.

Mining Industry 2021 | 20

Which Metals Will Lead the Decarbonization Trend?

Experts expect demand for several key minerals and metals to grow exponentially in the coming years as these are essential to creating cleaner and greener technologies. Mexico ranks among the Top 10 countries in the production of 17 minerals, and as a result, it is expected to benefit from this transition. What are the main factors to watch out for regarding the decarbonization trend?

Copper is essential to achieving a low-carbon world, with the goal of replacing diesel and other petroleum products with greener alternatives. I believe that the future of the industry, society and our lives will depend heavily on copper, as there is no other replacement for it. Perhaps silver could be an option, but it is more expensive. As a result, copper will be the metal that leads the world’s green transition. I believe that Mexico has a very important role to play since it is one of the main producers of many metals. Its contribution will not only be in the supply of copper, but also in silver, gold and many of these metals that are essential for our transition to a

Steve Robertson

decarbonized world.

CEO of Infinitum Copper

Silver is essential to a green economy. You cannot have electric vehicles (EVs) without silver coating every electronic circuit, nor can you have solar power without silver coating each photovoltaic cell (PCs). Silver is the best natural conductor of electricity on planet Earth. Mexico is the largest silver mining country in the world, producing 5,541 tons (178 million oz) of silver or 23 percent of total mine production in 2020. Even though silver mining in Mexico goes back thousands of years to the Mayans and the country has dominated modern silver production for hundreds of years, Mexico continues to have

Bradford Cooke Founder and Executive Chairman of Endeavour Silver

some of the best exploration potential worldwide for the discovery of new silver orebodies and the development of new mines.

While gold is not specifically classified as a strategic ‘climate-smart’ mineral by the World Bank and has not been identified as a critical raw material by main producers of green technologies, the range of its scientific and technological applications suggest that it plays an important role in advancements to mitigate climate change. More precisely, gold is a transition metal as it has the unique characteristic of being able to bond with other elements, augmenting their capabilities. Furthermore, gold is an excellent conductor of electricity and is particularly non-reactive with air, water and

Isabelle Ramdoo Deputy Director of IGF on Mining, Minerals, Metals and Sustainable Development

most other substances, which implies that it has very little risk of corrosion. In addition, gold nanoparticles can be used to improve PV in solar panels, hence creating more and cleaner energy sources.

ith climate change in the news almost every day, there has been a concerted effort in recent years to “green” the global economy by moving away from high-carbon fossil fuels to low-carbon

renewable energy sources. Because energy sources like solar and wind are not constant, energy storage in batteries has also become a focus of research. In the same way, there is major move underway to replace all forms of transportation fueled by hydrocarbons with electric vehicles that run on batteries. This has put a lot of public attention on battery metals, such as lithium, cobalt and nickel, and electrical conductors like copper and silver. President AMLO recently asked the Minister of Economy to evaluate the potential importance of lithium mining to the economy of Mexico, notwithstanding the fact that the few known lithium deposits in the country are small,

Mining Industry 2021 | 21

low grade and metallurgically complex.

The Green Economy Needs Silver but Where Does It Come From? Bradford Cooke Founder and Executive Chairman of Endeavour Silver

Mexico is not endowed with world-class lithium deposits like those in the Andes Mountains of South America but it is endowed with world-class silver deposits. Silver is essential for a green economy. You cannot have electric vehicles (EVs) without silver coating every electronic circuit, nor can you have solar power without silver coating each photovoltaic cell (PCs). Silver is the best natural conductor of electricity on planet Earth and because it can be manufactured as microscopic films and wires, there is not enough silver in EVs or PCs to affect their manufacturing costs but the forecasted growth of EVs and PCs is most definitely enough to affect the price of silver. So where does silver come from and how is it used? Where Does Silver Come From? Around 80 percent of the 30,365 ton (976 million oz) total silver supply came from mines in 2020. The balance of annual supply typically originates from recycling and inventories. However, over 70 percent of mine supply does not come from silver mines; it typically is produced as a by-product of other metal mines, such as copper, lead, zinc and gold. Only 27 percent of mine supply came from primary silver mines in 2020. Mexico is the largest silver mining country in the world, producing 5,541 tons (178 million oz) of silver, or 23 percent of total mine production in 2020. Even though silver mining in Mexico goes back thousands of years to the Mayans, and it has dominated modern silver production for hundreds of years, Mexico continues to have some of the best exploration potential worldwide for the discovery of new silver orebodies and the development of new mines. The reasons for this are threefold: 1. Plate Tectonics – Mexico is situated on the silver-enriched North American crust and when the Cocos plate under the Pacific Ocean was subducted below the North American plate, it partially melted both plates and the magmas rose up to form one of the longest volcanic belts in the world. These volcanoes heated the surrounding rocks, and the ground water contained within them also heated up. Since hot water rises, as these waters moved up in the crust, they started dissolving metals out of the rocks they

were passing though. When these waters rose within 1-2km of the then surface (now eroded), the drop of pressure caused these waters to deposit their dissolved minerals in fractures. After erosion removed the overlying rocks, these orebodies were exposed to the surface and discovered by people, both ancient and modern. 2. Modern Exploration – Once outcropping orebodies have been discovered and mined, the main challenge for modern day exploration geologists is how to see below the Earth’s surface in order to discover buried orebodies hiding below the surface. Many new technologies have been developed over the past 70 years to help geologists discover blind orebodies, including detailed geological models of what orebodies look like, advanced geochemical sampling to detect metals that may have leaked upward from orebodies below into surficial sediments, soils and rocks, and complex geophysical surveys to measure the magnetic, electrical and other effects of buried orebodies. Mexico has enjoyed a resurgence of mineral discoveries and the development of new mines in recent years as a result of modern exploration. 3. Free Trade – From 1961 to 1993, Mexico was effectively closed to foreign investment in the mining sector because of legislation restricting foreign ownership to 49 percent of Mexican mining companies and mining concessions. This changed to 100 percent ownership when Mexico joined NAFTA. Therefore, the Mexican mining sector prior to 1993 was dominated by a few very large Mexican companies that did not have easy access to either international sources of financing or modern exploration technologies, so there was very little investment in exploration to discover new orebodies. Since 1993, there has been a boom of foreign investment into exploration and mining in Mexico, which has resulted in several new silver discoveries and mine expansions, such as Peñasquito, Fresnillo and many more. Once silver ore has been mined, it must be processed to separate the silver from the rest of the rock it occurs in. Once the silver ores are crushed and ground down to clay-size particles, two different methods are used to recover the silver, depending on the type of silver ore: 4. Oxide ores can be leached using chemicals to recover the silver into a precipitate that is smelted on site to produce raw silver bars, called dore. Dore bars normally contain over 95 percent silver plus any gold that occurs with the silver and impurities, such as lead, zinc or copper, so they require refining to produce pure silver bars. 5. Sulfide ores can be concentrated using chemical flotation to form silver concentrates, usually with lead, and these concentrates are then sold to smelters who separate the silver into pure silver bars. The pure silver bars are then sold to metal traders, wholesalers, manufacturers and bankers who warehouse them for sale to users of silver. In my next article, I will talk about how silver is used in a green economy.

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ith industrial minerals and rocks, the market is the central element of the equation. On one side are the providers: who, where, how; on the other, the consumers: who, where, how, why. When talking about

lithium, there is no exception. The principal producers are Australia (pegmatites), Chile (brines), and China, which together accounted for 87 percent of 2020 production (82kt). In the case of China, it produced pegmatites (56 percent) plus continental brines (44 percent). Consider also that the nationality of lithium is not necessarily the same as that of the producing company; lithium is a global business. On the side of the consumers, there are tens of lithium-based compounds used in industries as diverse as glass and ceramics, lubricants, metallurgy, pharmaceuticals, polymers, nuclear

Mining Industry 2021 | 23

and, obviously, the battery sector. The latter ranges from the

China Corners Lithium Market but the Metal’s Nature is Global Armando Alatorre Campos President of CIMMGM

tiny batteries for cellphones, which require just a few grams of lithium, through a series of different sizes for tablets, laptops, cameras, hand tools and up to electric plug-in vehicles (EV), where around 50-60kg of lithium are required. As sales of new internal combustion cars will end in the next 15-25 years (depending on the region) because of green policies around the globe, sales of EVs will grow around 20 percent yearly in the next decade. Therefore, the need for a lot more Li-batteries is prognosticated, which is why the world is now looking at the “lithium rush.” Not all batteries, however, are created equal. First of all, they contain either lithium carbonate or lithium hydroxide. Furthermore, they are not made out of only those compounds: several mining products are needed. Talking about Li-ion batteries for EVs, there are, currently, seven different types: LFP (lithium iron phosphate), LCO (lithium cobalt oxide), LMO (lithium manganese oxide), NMC (lithium, nickel, manganese, cobalt oxide), NCA (lithium nickel, cobalt, aluminum oxide), NCM (lithium, nickel, cobalt, manganese) and solid-state batteries (ceramic separator instead of a liquid). The names and components refer to what makes the cathode. Each battery type has pros and cons due to the held energy and the time it remains in the cell. There are even several formulas for a given type. Cobalt, for example, is neither easily found on the market nor cheap. The process for an EV battery is complex and segmented. There are nine principal cathode producers (six in China); the anodes have six relevant producers (four from China); there are nine leading electrolytes factories (six Chinese); and there are 17 top cathode-anode separator plants (11 in China). Finally, the plants where all these components are put into an EV battery account for as many as 20 leading firms with a cited installed capacity of 475GWh; 15 are in China, three are in South Korea, with one each in Japan and France.

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No matter where lithium comes from, most of it ends up in China, at least for the time being. The global number of batteryproducing plants today is around 102. It is likely that another 226 will come on stream by 2030; however, the vast majority will still be in the Asia-Pacific region.

SPOTLIGHT

Mining Industry 2021 | 24

Torex Gold Gets Greener and Sets Ambitious Targets for 2021 Torex Gold has released its 2020 Responsible Gold Mining Report, which shows that the company achieved excellent performance in its environmental, social and governance areas, as well as its new goals and targets for 2021. Last year, the company was able to have a great year despite the pandemic and the temporary suspension of mining activities. Torex ended the year with more than 430,000oz of gold produced, which is the company’s second-highest annual production. Although it was a great achievement, it was not what the company was most proud of. Regarding the environmental performance, Torex reported zero environmental incidents, 100 percent compliance with environmental laws and regulations and zero water discharges at site. In addition, the engineering studies for its 8.5MW solar plant has been completed, 5 million fingerlings have been released in local waterways, 65,745 native trees have been planted and more than 105ha of land have been reforested. On the social side, the company was recognized for having secure and robust COVID-19 protocols. In addition, it continued the implementation of Community Development Agreements (CODECOPs) with 11 local communities and invested US$4 million in community projects. In governance matters, Torex was recognized Read the complete article More about this company

by the Globe and Mail’s “Women Lead Here”. Women represent 30 percent board of directors and 40 percent of its executive team.

Mexico’s Mining Tradition, Today Karina Rodríguez Matus Partner at Rodríguez, Matus & Feregrino

Senate Mining Commission Readies New Agenda Miguel Ángel Lucero Senator and President of the Senate’s Ordinary Commission of Mining and Regional Development

The Mining Industry in Light of the New Political Landscape Pablo Méndez President of Chihuahua Mining Cluster-CLUMIN

Dedication, Passion Drive Success for Women Miners Ana Laura Muñoz Director General of Rama Mantenimiento Industrial Total

Legal Certainty Needed to Retain Foreign Investment Andrés Pérez-Howlet Managing Partner at Molina, Hanff & Pérez-Howlet

Understanding the Importance of the Modern Mining Industry Juan E. Pizarro-Suárez Managing Partner at Pizarro-Suárez & Bandala

Women Leaders, Intercultural Cooperation Key to USMCA Success Jennifer Burge CEO of WorldWise Coaching & Training

Americas Gold and Silver’s Mine Is Still Blocked 08/12/2021

Blockade Lifted at Equinox Gold’s Los Filos Mine 08/02/2021

Mining One of the Most Attractive Sectors for Investment 07/27/2021

Finance & Investment Investors became more selective in their choice of projects in 2020 as the COVID-19 pandemic increased investment risk, given that lockdowns could potentially lead to the suspension of operations, overdue portfolios and unfulfilled production targets. The result was greater difficulty in accessing funds. However, as mining companies return to pre-pandemic production rates, investor confidence is also on the rise. One key element for financing success is the adoption of ESG criteria that can create long-term value, reduce risks and help seize opportunities related to environmental, social and economic issues. Experts believe that mining companies that do not put ESG practices at the core of their business will find it difficult to access capital. Through new technologies and processes, the Mexican mining industry is minimizing its environmental footprint and the negative impact on communities. Companies are also learning to communicate their ESG performance to foster trust in Mexico among investors and financial institutions. Alternative financing options are also emerging, giving miners a wider array of choices. Although equity and debt financing remain the main financing options, streaming, net profit returns and asset monetization are the new trends in the sector. Through alternative solutions, companies can better maintain long-term investment plans, ensuring stronger balance sheets and consistent returns and valuations.

Finance & Investment

Analysis ESG Criteria at the Heart of Investment Decisions

Conference Highlights Improving Miners’ Access to Finance

View From the Top Imaru Casanova | Senior Gold Analyst of VanEck

Expert Contributor Michael DiRienzo | Executive Director of The Silver Institute

View From the Top Ramon Perez | President and Director of Candelaria Mining

Conference Highlights Mexico’s Exploration Outlook: Opportunities and Best Practices

View From the Top Andrés Pérez-Howlet | Managing Partner at Molina, Hanff & Pérez-Howlet

Analysis Financing Alternatives Are Gaining Strength

View From the Top Alexandra Woodyer | President, CEO and Director of Empress Royalty Corp.

View From the Top Taj Singh | President, CEO and Director of Discovery Silver

Roundtable How Important Is ESG in Accessing Financing Solutions?

View From the Top François Dumont | COO of GoldFinX

View From the Top Ralph Shearing | CEO of Altaley Mining Corporation

Content Links

Finance & Investment | 29

ESG Criteria at the Heart of Investment Decisions WHAT IS THE MAIN RISK FOR MINING AND METALS IN 2021?

Whether or not an investor pours money into a mining project today often hinges on environmental, social and governance (ESG) criteria. ESG practices create long-term value, reduce risks and help to seize opportunities related to environmental, social and economic issues, while reducing carbon emissions, enhancing diversity and helping communities develop. With mining destined to play a key role in the transition to a lowcarbon economy, experts say the demand for responsible practices will only grow. Conversely, mining companies that do not embrace ESG practices will struggle to access capital. This is not a recent trend in the industry. Mining has a long history of implementing increasingly sustainable agendas and practices to lessen its impact on communities and the environment. However, the term may sound unfamiliar because ESG now incorporates all environmental, social and

45.4% ESG issues 13.6% COVID-19 supply chain disruption

9% Trade tensions 9% Chinese slowdown

7.5% COVID-19 demand destruction

7.5% Resource nationalism 3% Emerging markets 1.5% Strength of US dollar 3% Other

WHAT AREA OF MINING & METALS WILL FACE THE MOST SCRUTINY FROM INVESTORS AND REGULATORS RELATED TO ENVIRONMENTAL AND SOCIAL ISSUES?

governance issues into one comprehensive framework. ESG has made mining companies consider environmental, social or governance risks that may affect their access to capital, permits and work in communities. In addition to reducing risks, it also create new opportunities to reduce energy and water bills, as well as carbon emissions, improving performance and community relations and better managing mine closures. There has been good progress in improving ESG practices. An example is the Global Industry Standard on Tailings Management developed by the International Council on Mining and Metals (ICMM), the United Nations Environment Program (UNEP) and the Principles for Responsible Investment (PRI). It is the world’s first tailings management standard that can be applied to existing and future tailings facilities. The standard has strengthened mining practices by integrating local social, environmental, economic and technical criteria that cover the entire life cycle of the tailing’s facility. It has also established higher levels of accountability and expectations for transparency and disclosure of information. Despite the benefits, and the significant industrywide promotion and adoption of ESG standards, Fiona Reynolds, CEO of PRI, said market engagement on ESG issues has been mixed and there are many companies that still have a long way to go. She highlights that it is investors who are pressuring companies to improve their practices. “While investors have

25.5% Emissions from mining operations

23.5 % Emissions from use of mining products

21.5% Local community

15.7%Tailings management 5.9% Water usage 1.9% Human rights 5.8% Other

impact

a strategic role to play in ESG matters, so do companies. The two must work together to be successful,” Reynolds says. With the outbreak of the COVID-19 pandemic, there was concern that the market environment would lead to a regression in terms of ESG but that appears to be unfounded. Beth Burks, Associate Director of Sustainable Finance at

Source: White & Case 2021 Mining & Metals Market Sentiment Survey

S&P Global Ratings, says that companies that endure despite market volatility are those with strong ESG criteria and efficient structures. Rather than push companies to backtrack

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on what has been achieved, Burks says that the pandemic has acted as a catalyst to implement more ESG practices and set higher standards.

Conference

Finance & Investment | 30

Highlights

Improving Miners’ Access to Finance Forbes Gemmel Vice President Corporate Development of Discovery Silver Corp

Javier Reyes de la Campa Chairman of Accendo Banco

John Darch Chairman of Sonoro Gold

Enrique Rodríguez del Bosque CEO of RB Mexico Law

he development of alternative financial solutions could introduce a change to the operational strategies of mining companies, experts say, with juniors in particular benefiting from options that include streaming or royalties and equity. “Junior

companies will have to move along the path of streaming or the royalty and a combination of equity. Although debt is a viable alternative, it has to be of a size that can be easily managed,” says John Darch, Chairman of Sonoro Gold. Darch adds that traditional debt will not be as common in the future for smaller companies. A key determinant for financing is a company’s operational position in terms of cost says Javier Reyes de la Campa, Chairman of Accendo Banco. He says that maintaining a lowcost operation is important to avoid falling into a compromising position in the market. “If the market senses weakness, then the company might be forced to take streams or royalties just to keep the company running.” Many of these alternatives are not new but, in the past, they were difficult to implement. “About 12 years ago when we started to have streaming, not many people even understood what that practice was and they were very concerned about losing control of production,” says Enrique Rodríguez del Bosque, CEO of RB Mexico Law. The practices are also not for everyone, says Darch. “At Sonoro Gold, we have been offered these royalties and arrangements but it always comes back to a balance between risk and reward.” Regardless, these financial structures are here to stay, says Forbes Gemmell, Vice President of Corporate Development at Discovery Silver Corp. “Ten to 15 years ago, there were three or four companies doing this. Now, there are probably 15 to 20, or even more.” Gemmell says many of these companies view the arrangement as a nice, simple model, with structures that have a very low operational expense. “They cover the corporate DNA. They get exposure to the commodity price so they obtain spectacular margins. They are going to be a sort of financing option going forward.” Rodríguez del Bosque represents some of these royalty companies and said that in the past eight years, his firm provides services for royalty companies related to structuring these royalty agreements and that demand for the service has significantly increased. “There is a big amount of money coming

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from these companies into projects, which is a very good opportunity for companies to develop the project, or to increase the size of the project or terminate it.”

VIEW TOP Finance & Investment | 31

from the

Q: How are your investment strategies different from traditional approaches? A: We have a bottoms-up approach to our investment process, which means that we are modeling the companies in our universe in detail, mine by mine, conducting our own evaluation and creating our own operating and financial models. We then analyze the results to give us an idea of where these companies stand. We are looking for value opportunities, so if a company appears to be trading at a discount to its peers, we investigate it. Sometimes, the discount is justified. Other times, the company is simply being undervalued by the market, presenting an opportunity. When selecting an investment opportunity, we determine that the company is of high quality and that identified risks are manageable. We start with a very fundamental evaluation of the company and then we overlay other factors, such as the strength of the management team, quality of the asset, technical risk of the project and mining jurisdiction. We make an investment decision and decide if the company should have a place in our portfolio. Q: Do you consider Mexico to be an attractive investment destination? A: Mexico is a prominent mining jurisdiction with a great deal of geological potential. Historically, we have had a sizeable exposure

Imaru Casanova

to Mexico. However, that exposure has been reduced. In 2018, before the presidential election, we lowered our exposure in Mexico. We reduced the weight of those companies with assets in Mexico to account for what we saw as increased risk in the country.

Senior Gold Analyst of VanEck

Previously, our exposure was around 14 percent for Mexico. Today, it has dropped to around 5 percent. Those risks that we saw coming have become real threats to the mining industry in Mexico. While the reduction of exposure has also been due to companyspecific issues, I would attribute most of the drop in our exposure

Gold: Safe Haven for Investors

to Mexico to the current risks. Q: What are the major investment risks in Mexico? A: The uncertainty comes from nationalistic trends. Recently, for example, a halt in the issuance of new mining permits highlights these risks. Given the current administration, there is an elevated risk that the operational terms could change for the worst and with those changes, the economic benefit derived from the Mexican assets of the companies we own could be impacted. The fact that taxes and royalties could increase also represents a high risk. All of this affects the profitability of the companies we own and impacts their valuation. Q: How are the major silver and gold trends shaping the investment sphere in 2021? A: In 2020, Gold climbed to an all-time high after the impact of the pandemic and the ensuing global economic crisis. Investors considered gold a safe haven to hide from all the uncertainty. In late 2020 and early 2021, news of a vaccine, the world reopening and economies starting to return to normal, affected gold and

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silver’s appeal. However, after all the liquidity that has been and continues to be injected into the global economy, markets are now starting to worry about inflation. That is when assets like gold and silver shine, no pun intended. Exposure to these assets has historically been used as protection against inflation.

Q: What are your expectations for silver in 2021 and what role will the metal play in industrial development? A: The Silver Institute and our consultants at Metals Focus see the economic recovery that is underway continuing over the rest of the year, and that in turn will be good news for silver. As for silver’s supply and demand fundamentals, our fullyear projections for 2021 show gains for every single line in our supply-demand table. Mine production, for example, is expected to rise by 8 percent, as output recovers after last year’s COVID-19-related disruptions. Recycling is also expected to increase, helped by the stronger silver price. Overall, supply is forecast to rise by 8 percent to 1,056.3Moz (32,854 tons) in 2021. In our view, all of this is conducive to further price gains. We expect silver to rise to a peak of US$32 later in the year and

Finance & Investment | 32

that it will average US$27.30 overall in 2021, achieving a 33

Silver Lining: Economic Recovery to Propel Prices Higher Michael DiRienzo Executive Director of The Silver Institute

percent y/y increase. Q: What factors make you believe that silver is the metal of the year? A: Industrial demand globally is expected to see an 8 percent rise this year to a record high of 524.0Moz (16,299 tons). Much of the increase will come from a re-opening of economies and investment in green energy solutions, as illustrated by our expectations respectively of healthy gains for end-use in ethylene oxide catalysts and photovoltaics. Silver use in the automotive industry should also be robust, aided by surging sales of electric vehicles. Demand overall is also benefiting from still limited thrifting and substitution. Jewelry fabrication is forecast to increase by a substantial 24 percent in 2021 to 184.4Moz (5,734 tons). This will primarily be driven by retailers’ follow-through re-stocking and, more importantly, easing COVID restrictions and an economic recovery. That said, this will still fall short of 2019 levels due to high prices and lingering COVID damage. In the US, we are confident of buoyant gains for consumption and even more so for fabrication this year as the economy recovers. Global silverware demand is also forecast to rebound this year (by 32 percent). Q: How will Mexico be affected by the increase in prices and demand for silver? A: We believe Mexico will benefit from both as silver is both an industrial and a financial metal. This year, silver producers in Mexico should see some recovery over 2020 as we expect global silver mine production to rebound strongly in 2021, rising by 8.2 percent y/y to 848.5Moz (26,392 tons). Mined silver output had largely returned to full capacity by the end of 2020 as miners had successfully implemented new procedures to protect workers and ramped up production rates following temporary mine closures due to nationwide

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lockdowns earlier in the year. As a result, combined with the global vaccine roll-out, mines are expected to operate at full capacity throughout the year, which will be the primary driver behind production growth. We think 2021 and beyond will be very good for Mexico.

VIEW TOP Finance & Investment | 33

from the

Q: What are the company’s investment plans for its assets in Mexico? A: We are working on two projects: our flagship asset is the Caballo Blanco project in Veracruz and the other is the Pinos project located in Zacatecas. Caballo Blanco is a great asset and together with Agnico Eagle, we are planning to allocate a significant investment in 2021. It is likely that we will start a drilling program and an ESG program that will run parallel this year. Regarding the Pinos project, we have all the required permits and we are now evaluating financing opportunities to finish construction and start production. We expect to begin producing 15,000oz and eventually increase that to 20,000oz. Q: How important has ESG criteria become in accessing funding in recent years? A: ESG has definitely become an essential component for institutions and investors when investing in a mining company. It is also an initiative to responsibly manage a project, from its exploration to its production phase. These criteria are required by all investors today, which is why more companies are pushing for broader and better ESG programs. ESG criteria did not receive a great deal of attention in the past but now, it is at the core of many companies. Today, once mining

Ramon Perez

companies have identified good deposits, they launch their ESG programs right away. I think Mexico is beginning to grasp this idea and, as a result, it is becoming a stronger option for financing.

President and Director of Candelaria Mining

Q: How does Mexico compare to other mining countries in Latin America? A: Mexico has a phenomenal mining history. Mining companies do not need to look for people outside the country because

ESG Criteria Opens the Door to More Funding

Mexicans have a great deal of experience with mining. In addition, the industry is very mature compared to other countries like Ecuador that are still developing the sector.However, Mexico has significant safety issues, which is definitely something that raises many questions from investors. I think that the perception of safety in Mexico is perhaps a bit exaggerated. However, it is true that sometimes companies cannot work under such conditions. As a result, the government should help companies feel more secure operating in the country. It is not an easy task but I believe that through alliances and working groups, initiatives can be proposed to improve the situation. Q: How has the company reached out to nearby communities to involve them in projects? A: Zacatecas is a mining-friendly state and, more specifically, Pinos is an area where mining has always existed, so community engagement has been faster and easier. Mining communities truly understand how the sector works and the benefits it brings to communities. At Caballo Blanco we need to come up with a different approach

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for the communities. We have had some meetings with the locals to start cultivating a close relationship, as well as to allocate investments to involve them in the project. It is a challenge because Veracruz is not a mining state like Zacatecas. The key to success will be to provide them with reliable information.

Conference

Highlights Finance & Investment | 34

exico has opportunities to develop large mining projects but is missing out because of challenges including permits and the private sector’s strained relationship with the government, says John-Mark Staude, CEO of Riverside Resources.

“The faster mineral titles, permits and relationships with local governments are in place, the faster we can carry out projects and generate greater impacts on Mexico and its communities,” says Staude. Aside from government relationships, partnerships among companies to fund large projects should also be established. Through these partnerships, the industry would have true potential to generate greater economic spillover and achieve deeper social development for communities, Staude adds. Riverside Resources, which is dedicated to mineral exploration in Mexico, has focused its work on developing large projects in the country, such as the 100 percent Riverside-owned Los Cuarenta and Cecilia projects. The company’s business model is relatively simple: it generates alliances where majors contribute money and Riverside offers technical expertise. The company

Mexico’s Exploration Outlook: Opportunities and Best Practices John-Mark Staude CEO of Riverside Resources

differentiates itself from other prospect generators because it has been able to produce a profit from its JVs, alliances and project sales, says Staude. This has allowed the company to maintain a tight share structure over the last 10 years, with only 44 million shares. It has US$5 million in cash. The company focuses on copper drilling and exploration through a partnership with BHP, as well as gold drilling. “Through our large-project focus, we have brought in over US$80 million for grassroots exploration in Mexico over the past 13 years,” Staude says. Partnerships like that between Riverside and BHP create a spillover effect that can also spur significant international investment into Mexico. “Through our BHP agreement, the company is to fund US$5.4 million in drilling toward two projects plus geophysics in two priority properties,” says Staude. BHP will also fund US$1.3 million per year in 20212022 to continue a copper program in Sonora, bringing BHP’s total funding to more than US$6.5 million for 2021. Exemplifying Mexico’s potential for large projects is Los Cuarenta, Staude says. “The Los Cuarenta gold-silver project represents one of the largest opportunities for Mexico’s long-term economic and social spillover.” The partnerfunded 1,500m drill program has completed exploration in preparation for future drilling. The project is located in Sonora, and has a high-grade, low-sulfidation epithermal gold-quartz vein system. As part of its ESG commitment, during the COVID-19 pandemic, Riverside responded to the municipality of Bacadehuachi by donating PPE products jointly with its partner BHP. The company also expanded safety protocols at Riverside’s office in Hermosillo, while running education sessions and teaching communities about COVID-19 safety protocols. “It is relevant to mention that we employ local people to work at the company. We do this not only to have a better understanding of the community but also to provide the local people specialized

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working opportunities that will improve their skill set,” says Staude, adding that Riverside sponsors universities and students as part of its community commitment.

VIEW TOP Finance & Investment | 35

from the

Q: How are foreign mining companies challenged by the uncertainty in Mexican sector? A: When the law in 1992 permitted foreign companies to invest in the Mexican mining industry, it allowed the industry to develop. The most significant change was when all permits, such as exploration and exploitation, were reduced to only one permit. The permit itself also increased in duration. Since then, there have not been any significant changes to the Mining Law. However, today there is a sense of legal uncertainty given that the federal administration is looking to place greater restrictions on foreign investments. Any change to the Mining Law in this moment presents a big risk for the industry because the current law has worked well to attract large investments from the US, Canada and even Europe, whose investments were all on the rise until 2012. This made Mexico an important destination for mining investment. But the industry has experienced quite a big drop in investment due mainly to administration changes and legal uncertainty. Speculative reforms do no favors for the industry and just add more uncertainty, and all of it stems from an erroneous ideology, as well as misinformed officials who fail to understand the importance of mining and its benefits. One example is the executive order putting a stop to further mining permits. This decision was based on erroneous arguments, including that Mexican soil was being granted to foreign

Andrés Pérez-Howlet

mining companies, when in fact only 8 percent is under permit. Unfortunately, mining companies do not just suddenly stop operating and wait for things to settle down. They take their investments elsewhere — and their return is unlikely due to the lack

Managing Partner at Molina, Hanff & Pérez-Howlet

of trust in the country’s legal procedures. This forces the industry to fight for those permits, resorting to legal protection to keep those already granted. Without investment, exploration is not possible. Without exploration mining ceases to exist.

Legal Certainty Needed to Retain Foreign Investment

Q: How does Molina, Hanff & Pérez-Howlet help mining companies to adapt to these changes? A: One thing that we communicate to our clients is that crises always provide new opportunities. For instance, while the administration has refused to grant any new permits, some existing permits have been canceled due to different factors. A mining company could acquire those halted operations at a lower price, due to the permits being voided, and push the projects forward. This opportunity did not exist before the current administration entered office, but it opens the possibility of conducting exploration in a different way, which also will be aided by the onsite operations that have already been performed. What we want to communicate to companies is that there have been no changes to the Mining Law, and permits are still legally obtainable. We are continuing to provide foreign companies with the tranquility of knowing that if their operations have problems with the executive branch, the legal branch will provide the protection they require. While this situation will push some investors away, those looking for a high-risk, high-reward opportunity will feel at home in the current environment. Q: What role do international organizations play in investment protection in the Mexican mining industry? A: There two types of clients: those that want to invest in a mining operation in Mexico and put their trust in the country’s legal

framework and those that already have projects ongoing here. If their operations are threatened, we must defend them by all means possible. In extreme cases where the local courts are unable to defend our clients’ interests, we are pushed to seek protection from an international organization. Fortunately, we personally have not been forced to such drastic actions. We have always been able to resolve the legal situations that our clients have faced. We have seen companies like First Majestic Silver seek protection from international organizations but that leaves a bad impression for potential foreign investors. Q: What is a success story for Molina, Hanff & PerezHowlet in terms of resolving a client’s legal issue? A: We had one case in the municipality of Madera in Chihuahua that began in 2009 with a client that is still working with us. The main issue was a community confrontation. There was a blockade of the mining operation and clashes between community members and the company itself. It got to the point where even the federal government had to get involved. When we intervened, we were able to create an understanding with the community by communicating the development that they would enjoy, which was far greater than what they already had in the community. The company then went ahead and quickly began engaging the community, giving community members the training needed for them to create their own companies. This is an important part of a mining operation. Companies should provide the neighboring communities with the tools they need to be able to improve their quality of life on their own. Q: What does Chihuahua offer to investors versus other mining jurisdictions in the country? A: Chihuahua’s foundations are in mining. Towns such as Batopillas, Parral, Santa Barbara, San Francisco del Oro and more have been 100 percent based on mining. The state has a mining vocation and the development of the sector plays a prominent role here. There are miners in my own family so I’ve been able to witness the passion that people have for the sector. Eight years after the Mining Law was implemented, a Canadian company acquired the Ocampo district and it ended up being one the first successful cases of a foreign investment making a profit. This opened the door to other foreign mining companies who saw the great exploration potential in Chihuahua. Junior mining companies explored for 10 years, and they discovered huge mineral deposits in the gold belt that crosses Chihuahua and Sonora, which became a gold and silver-rich zone. Today, compared to other states, Chihuahua ranks third for metallurgical production and second for gold and silver production, demonstrating the state’s very high mining potential.

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Finance & Investment | 37

Financing Alternatives Are Gaining Strength In the next 10 years, three alternative options could represent over US$800 billion in financing for the mining industry.

Mining companies around the world have long struggled to finance their development projects. Last year, the market environment created by the COVID-19 pandemic made financing even more difficult. Investors and financial institutions have become increasingly cautious when choosing a project, which is preventing many companies, most of them junior and small, from continuing with their projects. As a result, more alternative financing options are being promoted in mining, such as streaming, net profit interest and asset monetization. “Leading miners use the full range of financial levers to manage capital and returns through the cycle, including both traditional

380

Streaming and net smelter returns

340

Net profits interest

Asset monetization

and alternative financing. By diversifying the financial portfolio, miners can better maintain long-term-investment plans, ensure stronger balance sheets and likely see more consistent returns and valuations,” said a report by McKinsey & Company. Globally, around US$8 trillion in assets are being developed with alternative options. However, mining has only 1 percent of the global alternative financing total, which is around US$10 billion to US$15 billion. These figures suggest the huge potential to use more alternative financing in the industry. According to Mckinsey, alternative financing options are expected to increase to 40 percent of the total financing in the sector over the next 10 years, breathing new life into many companies.

Source: McKinsey & Company

Mining is a relatively high-risk sector and, therefore, interest rates can be higher. With the current mining landscape, lagging stocks, high interest rates and difficulty in accessing bank financing, conventional options are being replaced by alternative financing options such as streaming and net smelter returns (NSR), net profits interest (NPI) and asset monetization such as joint ventures (JV). Streaming and net smelter returns (NSRs) are the sale of all or part of a mine’s future production at a discounted market price and the sale of a right to a percentage of future mine revenues. Among its advantages is the margin of maneuver for sellers. Agreements are usually structured so that the company does not face any restrictions in how to use the cash and are generally faster as the due diligence takes between two and six weeks. Alexandra Woodyer Sherron, President, CEO and Director of Empress Royalty, says another benefit of investing in a royalty and streaming company is that they provide a non-dilutive, highly competitive cost of capital, so companies do not have to raise their equity and dilute their shareholders. “We provide the initial capital necessary for a project and flexible solutions that are less restrictive than bank debt,” she says. Empress Royalty is working with the Altaley Mining’s Tahuehueto project, which recently secured a US$25 million loan to complete the construction of its mine. Funds came from Empress, Accendo Banco and Endeavour Financial, including an equity private placement of US$8 million, an Empress silver stream of US$5 million and a debt facility of US$12 million with Accendo Banco.

Finance & Investment | 38

INDEX OF TOTAL CUMULATIVE RETURNS TO SHAREHOLDERS 260

— Gold Mining

— Mining Companies

— Streaming

220 180 140 100 60 20 Jan

Jan

Nov

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: S&P Global Market Intelligence

Another attractive alternative in mining is net profits interest (NPI), which is the purchase of a percentage of the mine’s earnings in exchange for an upfront payment. This device is more commonly used in the oil and gas sector but it has gained strengthen in mining. Its advantages are similar to streaming and NSR. In Mexico, Xali Gold Corp is using this financing alternative through its subsidiary, CCM El Oro Jales, which has an agreement with the El Oro municipality to recover the gold and silver available at its tailings deposits in exchange for an NPI of 8 percent. The third most popular alternative option is asset monetization, also known as joint ventures (JV), which is the sale of a portion of the value of an asset in exchange for a revenue stream. The main advantage is that it allows companies to obtain funds without incurring in debt, thus minimizing the impact on market capitalization or debt covenants. The Juanicipio project in Zacatecas, for example, is a JV between MAG Silver and Fresnillo that own 44 percent and 56 percent of the asset, respectively. Alternative Financing Potential Overall, alternative financing provides significant benefits to investors, such as a 13 percent annual growth in profits before interest, as well as taxes, depreciation and amortization advantages, reported Mckinsey. Mining companies also benefit from reduced pressure on their balance sheets, especially during recessions or when metal prices are affected. McKinsey estimates that the 12 projects with the greatest potential for ongoing alternative financing around the world could generate US$1.4 trillion in secondary revenue over the next decade, implying a potential ten-year cash flow value of US$380 million, of which US$175 billion will come from gold projects, US$90 billion of copper and US$26 billion of silver. Regarding NPIs, the industry’s total EBITDA is estimated to be around US$7 trillion within the next decade. According to Mckinsey, NPI deals will not exceed 10 percent of total profits, for which a discounted ten-year potential of US$340 billion is expected. Finally, regarding asset monetization, the greatest potential is with miners’ ports, railway and energy assets. As a result, US$55 billion Read the complete article More about this topic

are expected in discounted ten-year values through ports and railway assets and US$15 billion through energy projects, such as solar panels, totaling US$70 billion.

VIEW TOP Finance & Investment | 39

from the

Q: What does Empress Royalty do for mining projects? A: Empress Royalty is a royalty and streaming company. Royalty companies have people like me who invest in a company to obtain a percentage of the company’s profits or revenues. Streaming companies are similar in that we invest in a company and its project, but instead of getting a percentage of the revenue, we get a percentage in gold or silver at a discounted price. We choose and structure the financing according to what each company needs to continue developing its projects. Q: Who are Empress Royalty’s strategic partners and how are they improving your financial proposition? A: We have three strategic partners: Endeavour Financial, Terra Capital and Accendo Banco. Endeavour Financial is a leading global investment banking firm that focuses on mining and has over 30 years of experience. This partnership gives us access to cash flow modelers, bankers, mining engineers and geologists. Our second partner, Terra Capital in Australia, is run by Jeremy Bond. It is one of Australia’s leading boutique fund firms, which gives us access to Australian deals, projects and listed companies with international projects. Our third partner, Mexico’s Accendo Banco, is led by Javier Reyes. We signed a strategic alliance with Accendo Banco in 2020 and this agreement has given us exclusive access to investment

Alexandra Woodyer

opportunities in Mexico. Q: What characteristics should a mining project have to qualify for Empress’ royalty financing solution?

President, CEO and Director of Empress Royalty Corp.

A: We are looking for projects in the development and production stage that need financial assistance to go into production or expand their resources. We are looking for small and medium-sized companies, whether public or private.

Highly Attractive, Lower Risk Financing Solutions for Mining Projects

However, they must be purely gold or silver, as we are a true precious metal royalty streaming company. Q: Empress recently closed and funded the Tahuehueto silver stream. What is the significance of adding this near-term producer to the company’s portfolio? A: Our most interesting deal to date has been the Tahuehueto project, where we are providing a silver stream. Tahuehueto is a great example of how our strategic partners and Empress work together. To do this, we have provided a complete financing solution: Accendo Banco is providing US$12 million in debt, Empress is providing a silver stream of US$5 million, and both Accendo and Endeavour have helped arrange equity totaling US$8 million. The group is providing a financing solution of US$25 million, which is expected to bring the project into production toward the end of 2021 or the beginning of next year. Q: What does Empress have in its deal pipeline for 2021? A: We are looking for many opportunities. We are looking for one in Kenya and one in Peru to improve their production.

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We also have a portfolio of 12 other opportunities that we are reviewing, four of which are in Mexico. For this year, we have US$75 million in potential investments. We have three development assets: Manica, Pinos and Tahuehueto and we would like to expand our portfolio by adding production assets.

VIEW TOP Finance & Investment | 40

from the

Q: How is Discovery Silver moving forward its Cordero silver project in Chihuahua? A: Discovery Silver operates solely in Mexico and we are developing our silver flagship project, Cordero, which is considered one of the largest undeveloped silver projects in the world. The project has over 600Moz of silver and over 1 billion oz of silver equivalent (based on the last data from 2018). We are located in Chihuahua, on one the most robust mineral belts in the world. We are also near existing infrastructure, which will help significantly with future mining operations. We are focused on an aggressive drill program where over 100,000m have been drilled in 18 months, making it one of the most aggressive drill programs in the silver industry. We are planning to publish an economic study (PEA) by the end of the year. The resource area only represents 5 percent of the total concession area and this means we should continue to develop new, exciting targets to drill test over the years, hoping to find more deposits in the district. Q: What is Discovery Silver’s high-level plan to deploy its sizable capital? A: We have around US$67 million in the bank, which puts us in a very good position. The plan is to spend around US$12 million this year and an additional US$20 million next year. The company will obtain approximately US$31 million in cash from warrants next

Taj Singh

year, giving us a balance of around US$71 million by the end of 2022. We will have between US$8 million and US$10 million more to spend on the construction decision in 2023. Funds totaling US$60 million for the construction of Cordero alone will be

President, CEO and Director of Discovery Silver

available. This could represent about 20-30 percent of the capital needed for the mine’s construction (depending on the size of the operation we are deciding to start with). The rest of the funds can be acquired through a combination of debt and additional equity.

Preparing for the Future of Silver

Q: How will your project benefit the local community? A: Most of our management team is based in Mexico. Our Cordero project, which is still in the exploration and development stage, has already created a significant number of jobs in the area. We are already past the 120 jobs mark and we have also started social environmental programs. To see the changes the local community experiences with the mining operations is truly incredible. During my time in Timmins Gold Corp, we built schools and hospitals plus improved roads and infrastructure. We used to take locals, including children, and give them tours of the mine and introduced them to mining and geology as well. I would like to think that we were responsible for many high-school children who eventually became geologists and engineers. This is an area that is very dear to me. Mexico is a mining country; it is in its people’s blood. It has been a great experience to be working in communities and in a country that actually understand mining. I want to point out that ESG practices are very important for us and we will be publishing our inaugural ESG company report later this fall, which will outline our key initiatives in this area. We strongly believe that mining companies must partner with their

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host communities (and nation) and agree on the responsibilities they have, for example hiring the local workforce, supporting local initiatives and boosting safety. Safety has become such a key pillar for the mining industry with mining companies pushing for zero harm operations.

Accessing financing has been a constant challenge for

Finance & Investment | 41

How Important Is ESG in Accessing Financing Solutions?

mining companies and it became even more difficult with the COVID-19 pandemic. However, the pandemic also brought new opportunities in the form of alternative financing options, which mainly benefited junior companies. Regardless of the financing model, demand for stricter ESG standards has become a common requirement to access funds. Mexico Mining Review asked industry experts about the role that ESG criteria play in the success of financing current and future projects.

ESG has definitely become an essential component for institutions and investors when investing in a mining company. It is also an initiative to responsibly manage a project, from its exploration to its production phase. These criteria are required by all investors today, which is why more companies are pushing for broader and better ESG programs. ESG criteria did not receive a great deal of attention in the past but now, it is at the core of many companies. Today, once mining companies have identified good deposits, they launch their ESG programs right away. I think Mexico is beginning to grasp

Ramon Pérez

this idea and, as a result, it is becoming a stronger option for financing.

President and Director of Candelaria Mining

Today, ESG criteria play a critical role in funding and I believe that in the future it will only get stronger. ESG criteria provide two main benefits to mining companies. The first is that through effective management, mining companies can reduce their risk profile. If mining companies manage their social and environment risk management and the government’s risk, that creates a better overall platform, instead of going out and trying to finance the project. Second, ESG criteria are opening more sources of potential capital. Now, there are many investors and institutions like the World Bank that do not provide financing,

Forbes Gemmell Vice President Corporate Development at Discovery Silver

unless they make sure that the company and project have high ESG standards and good performance. The demand for ESG criteria will definitely only increase.

ESG criteria have become extremely important in financing not only for the mining industry but for all industries, as it is a way to reduce risk on all fronts. I believe that publicly traded mining companies have always been a pioneer in meeting ESG criteria. In recent years, the industry has been constantly criticized for being “irresponsible,” yet most mining companies have always met their social, governmental and environmental responsibilities, even before the term ESG existed. More than its importance having increased, it has become a requirement to access financing and other opportunities. Now,

Javier Reyes de la Campa Chairman of Accendo Banco

if a mining company wants to be financed, it must have an ESG certification or specific standards. There is no way to avoid it; all mining companies must incorporate them.

VIEW TOP Finance & Investment | 42

from the

Q: Why is access to capital extremely difficult for artisanal miners and how is GoldFinX helping close that gap? A: There is a lack of information and a high-risk perception on the part of traditional funders. They have limited capital to invest and as a result, they avoid anything that is perceived risky in their investment options. Some funds, as part of their mandate, exclude any potential participation with the artisanal segment of mining. Unfortunately, there is a great deal of unknown information in regard to artisanal mining. We created this successful funding platform because of the opportunities cryptocurrencies have recently offered and allowed for a fairtrade way of transferring value to the ASGM community. Today, representatives from traditional funds look at us and believe that our proposal is interesting and sustainable. Each segment of our work process has been carefully engineered to create a risk mitigation mechanism in selecting our ASGM partners, efficiently operating the mines, and legally refining gold. I believe that if GoldFinX did not exist, it would be almost impossible to finance the artisanal world in an organized and efficient manner. Q: What are the company’s key pillars to ensure a fair trade crypto-finance model? A: We do not invest in equity or provide loans to the young mining company. Rather, we sign a partnership agreement that

François Dumont

includes an advance-purchase agreement component. This type of agreement has been sponsored by the World Bank and the UN for many years in relation to the agricultural world, where they basically provide money in advance to farmers to acquire the right

COO of GoldFinX

machinery, and properly train miners in a way it will deliver the quality of results that stakeholders are looking for. This “contract farming“ legal mechanism has been around for years and we have taken this concept and adjusted it to our mining industry segment and our funding platform. So, we provide the mines our

Cryptocurrency: An Alternative for Artisanal Gold Mining

on-site management, and control the capital and working capital until they reach cash-flow positive. After all equipment has been delivered, and the proper training and coaching has taken place, they start extracting gold. They need to deliver the portion of the gold we purchased in advance. When they have fully delivered that amount “invested”, from that point on, we will retain 20 percent of the gold production for the lifetime of the mine. This, we believe, provides a fair way of transferring wealth in a mitigated-risk and sustainable way to a segment of the mining industry that up to today has never been able to organize themselves financially. In addition, GoldFinX is using cryptocurrencies as a means to raise money to fund our partners. The additional benefit is for the normal retail investors as they be involved with a gold extraction investment opportunity without having to mortgage their house to do it. Anyone can buy coins from us in a very democratic, uncomplicated, and unrestricted way. Q: How does the company guarantee that its cryptocurrency is safe and considered a valuable option? A: We created our own crypto called GiX, which is the digital token we are selling to raise the money required to fund the ASGM communities. A sort of Bitcoin but supported by an accumulating amount of pure gold stored in a secured vault. There is a value

transfer mechanism linked to the gold accumulating in a vault to the financial beneficiary, the GiX token purchasers. A mechanism mimicking the concept of the stock exchange. This essentially allows everyday people to invest in a continuously increasing gold extraction mechanism and benefiting from the fluctuating price of the GiX token. Hence, people are investing in gold in a different and more convenient way than if they had invested in a mining property where they have no visibility or control. In addition, this GoldFinX transaction has an environmental and humanitarian benefit. It is important that people understand our business model and its concept of risk mitigation. For example, we allocate US$1 million to a partnership operation. When the mining partner delivers that US$1 million, the amount purchased in advance as part of contractual mechanism, 100 percent of that US$1 million worth of gold goes into the secured vault. Once the $1 million is fully delivered we will remit 80 percent of all future production to the partner and keep 20 percent for GoldFinX. From our share of 20 percent, 15 percent is kept in pure gold and accumulates in the reserve (secured vault), and the remaining 5 percent is GoldFinX’s operational revenue. The notion of the accumulation of the gold reserve each month serves as justification of the financial benefit for cryptocurrency owners. This assurance comes via the perceived reassurance of the accumulating gold protecting their investment. Q: How well are miners accepting your cryptocurrency and what is your short-term and long-term outlook? A: When we decided to enter the alternative financing environment, we found that many financial consultants were really impressed with our crypto and sustainable business model and we started having a great deal of sales support and financial success. We started in Europe and later entered the Asian market, which loves our crypto concept and the favorable impacts we have of the elimination of the toxic mercury in the extraction of gold, and the elevation of the quality of life of the ASGM communities. Since January, Canadian funds and specialized mining funds have started to show an interest in us. In addition, we have garnered interest from many who have never thought would be possible to benefit from this untapped $Billion opportunity within this forgotten mining segment. We have been successful thus far, and we believe that we are going to sell our GiX token for the next 10 to 15 years, and every time we have enough money, we will allocate this capital to another future mining partner.

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VIEW TOP Finance & Investment | 44

from the

Q: How does the company ensure a strong operating performance throughout the year? A: At Campo Morado, we are undertaking different initiatives to achieve better metallurgical recoveries. Some of these are a pilot plant that will enter the site soon and a three- to four-month program regarding extensive metallurgical test work, which is expected to increase the recovery of base and precious metals. In addition, there is a flotation circuit built by the mine’s former owners and that was 80 percent complete when the mine closed. If we finish the construction of that flotation circuit and put it into operation, it could allow us to increase production by 1000 tons per day. In addition, there is always the possibility to drill and explore more. Q: Why did the company choose the Maelgwyn Mineral Services’ Leachox process and Core Group’s Albion process? A: Campo Morado has refractory precious metals, which are hard to recover along with base metals, since they can be fine grain, or have a verifying size that we have to micro fine grind to get the best recoveries. Traditional flotation cells do not do a good job on micro fine grinded material. Therefore, we need to use different flotation methods that are called pneumatic flotation methods. We have used two methods: the Leachox process from Maelgwyn

Ralph Shearing

Mineral Services and the Albion process from Core Group. They are competitors to each other but both have gone through the first phase of testing at Campo Morado.

CEO of Altaley Mining Corporation

Previously, we had 15-18 percent gold and a 30-40 percent recovery. In the last month, we have been improving and now we are getting recoveries of 25 to 30 percent in gold and up to 50 percent in silver. We expect to achieve an increase in recoveries as this is a possible new source of income and an opportunity to

Altaley Mining’s Restructuring Unlocks Its True Potential

transform Campo Morado from a zinc mine to a silver mine. Q: What are some environmental aspects in Campo Morado that the company seeks to improve? A: One of the most important environmental aspects at Campo Morado is that we do not have carbon emissions for power generation. We are investigating the possibility of adding some green energy, either purchased from a power producer or by installing solar panels at the mine site. Furthermore, we are always trying to improve the environmental aspects of our project. We hope that with the metallurgical tests we can reprocess the existing tailings and clean much of the metal they contain. Q: What makes the US$25 million injection from Empress Royalty, Endeavour Financial and Accendo Banco the best option to continue developing the Tahuehueto project? A: Basically, this solution has fully funded us. We just received the first US$2 million from Empress Royalty. The remaining US$3 million of the US$5 million silver stream is scheduled for when we close the Accendo Bank’s loan facility. With this finance

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solution comes a total restructuring of the Trafigura and Nyrstar loans. We owe a substantial amount to those two companies and they agreed that if we found a solution that fully financed our Tahuehueto project they would allow us to continue working and restructure their loans.

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Exploration & Discovery Potential According to CAMIMEX, the country’s mining potential covers 70 percent of its territory but only 30 percent of this land has been explored. In addition, there are projects that have not been explored using modern technology, meaning there is significant opportunity to increase resources and production. Hampering this opportunity is an uncertain investment environment and political acrimony that have impeded the arrival of new exploration projects, forcing companies to seek other jurisdictions. The government’s decision to stop granting new mining concessions has been a major setback for the entire sector, putting further growth in danger, according to industry experts. President López Obrador has repeatedly said that he will maintain his position on concessions because previous governments granted too much for a long time, without guaranteeing responsible mining. Key industry leaders have denied this argument, saying the government has outdated and erroneous data. Concessions have not been the only challenge for exploration companies. The 2014 reform that eliminated the deductibility of exploration and pre-operating expenses has caused a 40 percent drop in exploration investment. Mining leaders have sought alliances with the government to regain the country’s position as a hub for exploration projects. Achieving that, they say, will require a change in the latter’s perspective.

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Analysis Mexico’s Exploration Outlook for 2021

View From the Top Alan Cañamar | General Manager-Mexico Operations of L&H Industrial

View From the Top Craig Gibson | Technical Director of ProDeMin

Roundtable What Are Mexico’s Untapped Opportunities in Mining Exploration?

View From the Top Melvin Herdrick | Vice President, Exploration of Sonoro Metals Corp

View From the Top Manuel Sainz | Partner at O’Gorman & Hagerman

Content Links

CONCESSION GRANTS AS OF 2020 (thousand ha)

The government’s decision to stop granting new mining concessions is considered one of the main challenges for the

sector. Without concessions, investments will decline and the survival of an essential industry could be endangered, some

30.78

30 25

experts believe. “If new concessions are not awarded, there is no exploration, and if there is no exploration, the future of mining is

21.26

16.83

simply in doubt,” says Fernando Alanis, President of CAMIMEX.

20 16.49

Exploration & Discovery Potential | 49

Concessions in Mexico and Their Future

López Obrador has repeatedly stated that his government will not grant new concessions, highlighting that the mining concessions granted over the past 30 years totaled 80 million ha of the country’s 200 million. “We are no longer going to continue

granting new concessions for mining exploitation, because they

0 Vicente Fox

Felipe Calderón

Enrique Peña Nieto

Andrés Manuel López Obrador

gave too much and for a long time.” CAMIMEX, whose affiliated companies represent 90 percent of the mining value in Mexico, said that the area covering current concessions is smaller than what authorities’ figures show. According to Fernando Alanís, President of the chamber, Mexico has 24,066 concessions, which represent 16.83 million ha and an occuped area by producing mines close to 0.1 percent of the national territory. “There is a deep ignorance regarding the mining industry. Granting a concession is not giving a mine to companies but the possibility of exploring the land. Companies need more permits to have a mine,” adds Alanis. Representatives of the mining industry have sought to work with the federal government to reactivate the

SHARE OF LAND GRANTED IN CONCESSIONS (percentage)

granting of mining concessions that stopped in 2019, arguing that the government’s action has discouraged investment. However, the government has held its ground, as it believes that proving that a project is environmentally and socially responsible could pave the way for better development. Jose Castro, Director of CLUMISIN, told MBN that the suspension of concessions is among the main concerns for its members, along with other government policies that have hampered the sector. “As a cluster, we are working to

15.87% Concessions 3.81% Productive concessions 0.19% Productive area within productive concessions

provide certainty. We are advocating for the rights of the sector and to change its negative image.” According to CAMIMEX, in 2020 the Mexican mining sector captured just US$2.5 billion in investment, the lowest figure in the last 13 years. However, several investors and financial institutions consider Mexico one of the top investment destinations in Latin America and among emerging economies. “It has a great macroeconomic stability and is increasingly integrated into the North American bloc,” says Emilio Romano, Director of Bank of America. In 1Q21, the Mexican mining sector reported foreign direct

National territory

investment (FDI) of US$1.05 billion. That was the second-best first quarter the sector has had since 2014, when it attracted US$1.158 billion. According to the Ministry of Economy, mining FDI in 1Q21

Source: CAMIMEX, El Financiero

was 176 percent higher than in 1Q20, when it received US$381 million. Francisco Quiroga, former Undersecretary of Mining, believes proper preparation could help companies overcome the current concession obstruction and move forward with their projects. “If a foreign company has a project that meets the Read the complete article More about this topic

standards from an economic, social and environmental point of view, I am sure there will be a good reception and the government will admit new concessions,” he says.

Conference

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Highlights

Challenging Environment Requires Fresh Strategies, Technology Patricia Vivar Partner of VHG Servicios Legales

Michael Konnert CEO of Vizsla Silver Corp

John-Mark Staude CEO of Riverside Resoures

James Anderson Chairman and CEO of Guanajuato Silver

Jennifer Roskowski Chief Geologist of Defiance Silver

n uncertain regulatory environment, labor law changes and other hurdles are hampering the attractiveness of Mexico as a mining jurisdiction, experts say. Changes are needed to ensure success, they add. “Mexico is a good place for

a mining business but that is based on an old reputation,” says James Anderson, Chairman and CEO of Guanajuato Silver. The situation in Mexico has some companies eyeing the attractiveness of other global jurisdictions with envy, but that does not mean the industry is turning its back on Mexico, where there is still much to be gained, says Michael Konnert CEO of Vizsla Silver Corp. “As a whole, I think Mexico has more attractive opportunities around new discoveries.” To exploit its advantages, Mexico needs to define priorities, implement strategies and processes and make technology choices aimed at successful exploration. “I think the best strategy for companies to pursue in Mexico is to develop the country’s old, known resources,” says John-Mark Staude, CEO of Riverside Resources. Companies also need to be persistent. “It is very easy to get distracted by environmental regulations and concession regulations and other labor laws. These regulations in the mining business always take a long time to unfold,” says Anderson. Maintaining a local presence within the company is another strategy to move projects forward, says Konnert. “Groups that are successful in exploration have local people involved in senior management; this is also a great strategy to implement.” The industry would also benefit from greater communication and diplomacy between companies and their communities, a strategy that has already proven successful in the country, according to Jennifer Roskowski, Chief Geologist of Defiance Silver. “Companies and communities approach these issues and learn how to deal with them, which has created a serious impact in the changing operating environment.” Legal, regulatory and permitting roadblocks are also relevant. The changes in these “affect our company and other companies in regard to our decision-making process,” says Anderson. Patricia Vivar, Partner at VHG Servicios Legales, says there are also many gaps on what companies should do and should not do, which adds to the huge problem of data inconsistencies

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across the entire system. “This significantly impacts Mexico’s competitiveness and leaves the country out of some investment opportunities,” she says.

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from the

Q: What is the status of exploration at the El Creston project? A: El Creston is a well-known and recognized molybdenum project. It is only a part of the claim we have there, which has never been explored for its gold and silver ore deposits. We have just begun the exploration phase. We have discovered a great potential for deposits of precious metals, specifically gold and silver. We are working on a price quotation with diamond drilling companies after the environmental permits are sorted out. Soon after, we plan to work on two veins with high potential yields. Q: You mentioned that Queretaro is a good state in terms of economic development. What sets it apart from other mining hubs? A: One the most critical factors that Queretaro still provides is safety for its residents. Unfortunately, when operating in other mining states, safety becomes a real and risky factor for a mining operation. In our time operating in Queretaro, we have not had a single incident. Another key element is the state’s government itself. It has proven to be most helpful in terms of granting permits. In addition, we have been there since 1993 and the community has seen a good amount of development. The only thing

Salvador García

missing in Queretaro are more exploration projects in order to increase the presence of mining in the state. Q: What are the areas for exploration and development

COO at Starcore International Mines

in San Martín Mine and what area their potential yields? A: We have two main areas of exploration at San Martín, which are continuations of our already operating mine. One is the north part of the mine, considered the deepest part of the

During Uncertain Times, Gold Is the Answer

mine. After some exploration work in the area, we were able to find high-quality resources. This has helped us stabilize our production while we continue our exploration developments. On the east side, we have a great deal of water. We have just concluded a 100m-deep well construction with an installed pump to extract the water and lower its levels to continue the access ramp to reach the elevation where we have four positive holes so far. Q: How did the pandemic change the way Starcore views automation as a potential alternative in mining operations? A: We have been pushing to make mining more sustainable, for which automation must be the solution. The pandemic made everyone recognized the need to find a solution to continue operating while keeping workforce numbers low. In our case, we had to redistribute our workforce from San Martín and El Creston due to personnel limitations. In addition, we have our own automated equipment already operating in the mine in the form of electrohydraulic jumbos. These have allowed us to maintain productivity levels, while personnel follow safety protocols.

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There will always be some form of limitation for these types of equipment due to the nature of the mine itself. For instance, the way the underground veins are presented, sometime makes it impossible for these technologies to work.

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from the

Q: What are some of the main problems mining companies have when drilling and how does IMDEX help them drill faster and smarter? A: One of the main problems is deviation. We help our clients to align their rigs in minutes, rather than hours by using our TN14; with our solutions, clients are able to set up and align multiple rigs in the less time and they can be 100 percent sure that they are starting to drill in the right direction. Another advantage we had over competitors during the pandemic was that our equipment could be monitored remotely. Q: What are the key innovations IMDEX has developed to increase on-site safety? A: Connectivity is key in a mining operation. When the company decides to not involve a human operator in dangerous activities, you are already saving yourself from potential risk. If you can have the operator remotely monitor the operations via our solution sets, that gives you real-time accurate information and you move the operator to a different area, you save that person from exposure to potential safety hazards. We focus our software and development of our instruments on this connectivity goal. We enhance safety via automation. Q: What is the company’s commitment to

Diana Catarino

sustainable and responsible mining and how is it promoting these practices within the sector? A: We have a suite of products such as bio-degradable drilling

Manager of IMDEX

fluids and we help clients improving operational efficiencies to reduce wastage and consumption, one example is our equipment Solids Removal Unit (SRU). It enables a smaller site footprint, lower contamination, and safety risks, reduces water usage by up to 70 percent and our newest units will include the connected

Finding Mining Solutions With Newer Technologies

system for remote management. Our SRU solutions allow for an easier disposal of the solids resulting from production. The end result is that when the equipment is removed from the site, there is very minimum site footprint, environmental residue or damage, despite being used on a daily basis. Q: How has the mining sector progressed from low-tech to highly innovative? A: I believe that the progression had been very slow for quite a few years but in the last three years, the industry has picked up the pace by starting to do things differently. The industry is beginning to look at connectivity, productivity, precision, QA/ QC and financial savings as crucial elements of their operations. I believe that this will continue to be explored for many years. Q: How real is Mining 4.0 in Mexico and how can this be further developed? A: For Mining 4.0 to happen, you will need to have a great technical support service team. Although the goal is to have most processes automatized and connected, it will still require

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supervision. We must continue as an industry to improve our operations and drilling optimization, as well as other areas of mining. I believe that 35 percent of the Mexican mining industry is already part of the smart mining wave, mainly due to the adoption of other countries’ technologies.

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from the

Q: How did Robit achieve positive results in 2020, despite the challenges caused by COVID-19? A: We have positioned ourselves as a global company in consumables for the mining and construction segments because we work with local distributors. The pandemic prevented us from traveling but it did not impact our ability to serve customers, as local people always work directly with end-users. Q: In what ways do you work with your distributors in the Mexican mining market? A: Our mining market distributors are Rock Bits and Minsol, with whom we have been working for about four years. The real key to success has been understanding the end-customer value of each company and how our technical staff supports this value. We have been able to show the benefits and importance of selecting the right drilling consumables for each operation, as well as provide advice on how to operate the drill rigs more efficiently. Q: What added value does Robit’s Top Hammer series of button bits provide? A: We relied on our knowledge to improve the drill bit lifetime in meters. These new generation bits last longer and at the same time, their properties have been improved to increase the drilling

Tommi Lehtonen

speed. We have used them extensively in different conditions and we are very happy with the results. Q: Why did the company decide to invest in the development

CEO of Robit

of educational materials for the Top Hammer division? A: Training and education are at the core of any successful operation. We are training our distributors and technical teams to work with clients in selecting the products best suited to them

Robit Going Further and Faster

and to help them operate the equipment correctly, since that knowledge can lead to a huge difference in productivity. Q: What should the mining sector expect with the new Down the Hole drill (DHT) hammer series launching in 2021? A: It is an additional product so it is not replacing our existing product. It will provide more options for customers to select the right hammer for their rock and terrain conditions. Q: What is the company’s plan for its Top Hammer and Down the Hole products in the short term? A: Our Top Hammer line of products is a proven global business for us with presence in all main markets and customer applications. At the same time, DTH is entering to new markets and creating another global business for Robit. The market potential of Top Hammer and DTH is almost at the same level worldwide and both have a good opportunity for a continuous growth. Q: What is Robit’s outlook for 2021?

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A: We expect Robit’s sales to increase this year, as well as our profitability, as the higher volumes improve cost efficiency in the entire value chain. It appears that the impact of the COVID-19 pandemic is diminishing. Moreover, the mining market is very strong, so we have opportunities to grow our business in 2021.

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Q: What is the new vision you want to impart to the mining community with the name change from VanGold to Guanajuato Silver? A: VanGold was a long-lived shell company that traded on the Vancouver Stock Exchange and later on the Toronto Venture Exchange for about 40 years. The company has been involved in the Guanajuato area since our first project, called El Pinguico, which has a history of producing silver and gold. We recently announced the acquisition of El Cubo, which has a 200-year mining history in Guanajuato. For our company to take on the name of the city and the state of Guanajuato, which has a 480-year mining history, definitely has a lot of power. We also have silver in the name now which is going to be the primary metal that we will be producing in Mexico. Essentially, we are going the be Mexico’s new silver mining company, and we expect to be in production by 4Q21. Q: What opportunities did Guanajuato Silver identify in Guanajuato? A: I noticed there were four substantial, large, modern flotation mills in the Guanajuato area. Yet, not one of them was fully utilized. A part of our vision is our desire to be a catalyst of change and to consolidate the large number of assets that exist in the Guanajuato area.

James Anderson

In regard to El Cubo, our interest revolved around our different vision of how to run an operation. The reality is that the mine is located in a very typical central Mexican, narrow

CEO of Guanajuato Silver Co. Ltd.

vein, epithermal system; which means that getting 1,500 tons of new raw materials on site daily is extremely difficult. The way we will handle this operation is to use limited cut and fill and reuse mining. We will take less dilution and we will mine less rock. We believe we will have more than enough silver

Identifying, Believing in New Opportunities

and gold for future production. Combined with El Pinguico, we expect to run 750 tons a day through the mill. Q: What are the main goals at Pinguico and how have the initial results contributed to those goals? A: From an exploration standpoint, we started drilling lowhanging fruit targets. We know a lot about the mine because we can get into the fourth level and the seventh level thanks to the intense work that we have done. But, geologically speaking, we are babes in the woods. There is a whole bunch of things that we do not yet know. The first batch of results that we published six weeks ago were mixed. Once we figure out a little more how to drill it, we will be able to continue to come to the marketplace with more and better grades. Q: What new opportunities did the PEA show in both assets? A: Surprisingly, our PEA in regard to Pinguico did not give us as much credit for some of the material, especially for the underground stockpile material that we have measured. Our study has established half a million tons of material considered a very good grade, with 380 grams of silver equivalent, and about one and a half million tons at a slightly better grade in the inferred category. Because it is a PEA, all of that material has to go into either an inferred or an indicated category. Nevertheless, under different

circumstances there is some of that material at El Cubo that would naturally go into a higher confidence category, either measured or even into reserves. Q: What role do local communities play in Guanajuato Silver’s operations? A: We want Guanajuato Silver to be a different company than many of the other mining companies that are working in Mexico. If you look at the British, Canadian, American and Australian companies in the country, they like to brag about hiring a lot of Mexican workers but they very rarely put them in charge. I believe that not doing that is a big business mistake, one that we do not intent to make ourselves. We are determined to operate differently than those companies. Our Chief Operating Officer is Hernán Dorado. He is a graduate from the University of Guanajuato. He has worked in Canada, Australia and throughout Latin America. He lives in Torreon and spends five days a week in Guanajuato. Hernan’s father, Gerardo, is also one of our partners. He also graduated from the University of Guanajuato and has over 45 years of mining experience. Having these partners really helps us in connecting with the local communities. We are planning to hire over 250 people, where the vast majority are Mexicans from Guanajuato. Our latest addition to our board of directors is Ramón Dávila, who has the best CV as a Mexican miner. Ramon was on the board of directors and was the chief operating officer for First Majestic, back when it went from two employees to 4,000 employees and from zero production to 12 million silver equivalent ounces per year. In 2016, Ramon left that job to take a political position. He became the minister of the economy for the state of Durango. After four years, he came back to work in the mining business with us. Q: Why should investors look at Guanajuato Silver rather than another company? A: We offer a very interesting valuation proposition and we will be Mexico’s next silver and gold mining company. In addition, we have the luxury of not needing more permits. Part of our asset purchases is that they have all the mining and milling permits as well as tailings facility permits in place. We do not need to build a mill. The mill is there. In addition, we do not need to convince a community that mining is a good idea. The people from Guanajuato have been mining for 480 years. They understand that mining provides well-paying jobs.

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Exploration & Discovery Potential | 56

Mexico’s Exploration Outlook for 2021 MINING PARTICIPATION IN STATE ECONOMIC ACTIVITY (percentage)

The number of mining projects globally is expected to grow as the market environment and commodity prices boost investor confidence. However, Mexico faces other challenges in addition to COVID-19 as political uncertainty has prevented the arrival of new investors and projects. In 2020, the mining sector was affected by the COVID-19 pandemic amid lockdowns and a drop in metal prices in March. Despite these challenges, the industry ended the year better than expected. According to S&P Global Market, the global exploration budget decreased 11 percent in 2020, representing a drop of US$8.7 billion compared to US$9.8 billion in 2019. S&P analysts said they had expected a greater decrease. Commodity prices and a better market environment mainly due to the distribution of the COVID-19 vaccine have improved the outlook for 2021, which is expected to see an exploration budget by 20 percent. The expectation for 2021 is that the mining industry will continue to see a greater focus on

33.3% Sonora 19.9% Chihuahua 15.9% Zacatecas 8% Durango 4.9% Guerrero 3.8% Coahuila

2.9% San Luis Potosi

1.9% Oaxaca 1.5% Baja

California Sur

1.3% Hidalgo 6.6% Others

advanced and mine-site assets than on early-stage exploration assets. This trend is mainly due to project financing, as junior mining companies favor assets that are not high risk, while majors prefer to maximize the value of their already profitable assets. Despite its potential, Mexico’s investment environment has prevented the arrival of new projects. Political factors, taxes, legal frameworks and security concerns are key considerations for mining investors and, due to the current situation in Mexico, mining

Source: INEGI, SE

companies and investors are looking at other countries, CAMIMEX reported. “Countries like Peru and Chile have encouraged mining operations to grow with incentives that Mexico has forgotten or

STATUS OF MINING PROJECTS IN MEXICO

ignored. Mexico needs to understand mining as a whole, as well as mining companies, to attract more investment,” says Adolfo Calatayud, Tax Controversy and Dispute Resolution Lead Partner in Mexico and Latin America at PwC.

44.4% Postponed 42.7% Exploration 8.2% Production 4.2% Development 0.5% Closure

The Mexican mining sector has the important task of improving its investment situation. However, it cannot do it alone; it needs the support and help of the federal government. “We hope that the government will begin to promote mining activities, as all mining countries do. This alliance is necessary for the sector to develop,” Fernando Alanis, President of CAMIMEX, told MBN. Mexico needs certainty and long-term public policies that promote fiscal and regulatory competitiveness, social certainty and understanding of the mining sector. “Initiatives can be achieved through a mining board that allows good coordination between the legislative and executive powers,” said Alanis.

Source: CAMIMEX

Minister of Economy Tatiana Clouthier has announced that she also will seek to improve the mining situation in the country, in addition to reaching beneficial solutions to many mining conflicts. The Ministry of Economy has invited small, medium and large companies, as well as their corresponding associations, to find common solutions within a legal framework to reactivate initiatives that will benefit Mexico’s mining sector. “We are working to provide Read the complete article More about this topic

a modern regulatory system that will reduce substantially the socalled bureaucracy. We need a better relationship with the private mining sector, where both sides trust each other,” says Clouthier.

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from the

Q: Why should a company choose L&H Industrial over an OEM to revamp or improve its heavy machinery? A: The main factor is that we work closely with our clients. Whenever clients have a problem, we can innovate within our engineering department to make modifications, produce components and take on projects, working side by side with them. We specialize in having a personal contact with our clients. Most of our shops are right next to the customer. They can visit our facilities, look at the product themselves and make sure that it is what they are looking for. If changes are needed, we can accommodate that. In addition, our quality standard not only meets expectations but goes the extra mile. This strategy has allowed us to continue selling for almost 15 years. Q: What is behind L&H’s up to 50 percent improvement in the original life span or efficiency of the equipment? A: Our engineers are our experts in the field. We look at the product and equipment, analyze them and do our research around them. We talk to our customers to understand where they need improvements and recommend appropriate solutions. Then we do field tests until we reach the point where customers are satisfied with the increase in the useful life of their equipment. Each problem has specific conditions and for this reason, we try to generate appropriate solutions that match the needs of each client.

Alan Cañamar

Q: What role does L&H play in extending the life of an operation? A: The operational equipment, like any other equipment, cannot

General Manager-Mexico Operations of L&H Industrial

always be operating at its maximum capacity. That is impossible. For example, if a company has equipment that is running at 95 percent of its capacity, through innovation, we can increase it to 97 percent. It is a small percentage increase but the downtime on this type of equipment can lead to significant financial losses. We do

L&H Industrial’s Solutions Go Beyond OEM Offerings

not offer a specific percentage increase, but we generally aim for that extra 1 or 2 percent in all equipment. Q: What is the ideal scenario for companies in terms of parts replacement to optimize total cost of ownership? A: It is difficult to say, given that the mining sector has many ups and downs. Mining operations must always meet specific maintenance standards, both preventive and corrective. However, some mining operations work around cost reduction, so it is up to the mines how they manage their equipment. Each country, market and company are different, and we try to adapt to them. We can work with clients who really appreciate maintenance programs and with companies that only perform emergency repairs. We can tailor our solutions to both. Q: What is L&H focusing on this year? A: This year, our main focus is on renovating and expanding facilities in different sectors. In fact, we are considering purchasing another facility in Mexico to expand our presence. In Mexico, there is a tendency to manufacture more products in the country instead

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of buying from others. Companies rely more on the quality and technical workmanship that the Mexican market can offer. We believe that this is one of our advantages since we have facilities in Mexico, and we seek to expand them. We will also focus on research and development regarding our products.

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from the

Q: How can ProDeMin best assist clients in their ESG practices? A: We have a different approach to ESG. We focus on field operations and not the more visible variables. Regarding the environment, we contract environmental studies with industry and governmental agencies that are aware of all the regulations and know how to effectively carry out environmental permits. We do everything according to the book and even go beyond the necessary requirements. In addition, we use and promote portable drilling equipment to disturb the surface as little as possible, which facilitates its rehabilitation. In regard to social matters, we are implementing sustainability programs. In Guerrero, we worked on educational and promotional programs as well as promoting local products. We focus on responsibly maximizing local resources and hope to leave a positive legacy for the locals when the project is completed. In governance matters, we try to stay above local culture and politics. We provide aid to locals communities while eliminating the risk of corruption and bribery, so instead of giving money to a group of people we provide materials and labor to make sure the funds go to where they are intended. Q: In a previous interview, you said Guerrero was arguably

Craig Gibson

Mexico’s most promising state. Does that still stand? A: The Guerrero gold belt is a phenomenal area for the exploration of important gold deposits. It has some social problems that have

Technical Director of ProDeMin

affected the development of the region; nevertheless, it remains a key reference for gold exploration. Since our last interview, the gold belt in Sonora has developed further and it is considered a more important area for gold in Mexico.

Mexico Will Continue to Be a Primary Destination for Exploration

The recent surge in metal prices is reviving exploration, especially in the north. All the mining districts have been further developed, and in some parts, they remain unexplored in terms of modern exploration. Additionally, exploration is expanding into new areas for battery metals, such as lithium in Sonora and Zacatecas. These factors are benefiting the north of Mexico more than the south, so the main opportunities are there. Q: What makes Mexico an attractive investment destination for foreign miners and what role does ProDeMin play in helping attract that investment? A: The geology of the country is very favorable for exploration and many areas still have opportunities to be explored with modern technology. In addition, there are many areas yet to be discovered in Mexico. Some policies have affected the image of the sector; however, the main laws remain unchanged. Mining is a sector that benefits remote areas where there is not much economic activity. Therefore, we must continue to attract investment to help communities. In the past, we waited for people to come and hire us. Now, we are

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more proactive in working as participants in major investments in publicly traded companies. We take a project and bring foreign investors to explore them. We also carry out 43-101 technical reports that allow Canadian companies to come to Mexico and invest more in projects.

Exploration & Discovery Potential | 59

What Are Mexico’s Untapped Opportunities in Mining Exploration?

The number of exploration projects is expected to grow as the market environment and commodity prices increase investor confidence around the world. While Mexico’s lack of investment certainty has impeded the arrival of new projects and investors, key industry leaders continue to believe in the country’s tremendous mining potential. MBN asked industry experts what factors make Mexico an attractive hub for exploration projects and how they are optimizing their exploration programs.

There are many factors that make Mexico an attractive destination. The geology of the country is very favorable for exploration and many areas still have opportunities to be explored with modern technology. In addition, there are many areas yet to be discovered in Mexico. The recent surge in metal prices is reviving exploration, especially in the north. Additionally, exploration is expanding into new areas for battery metals, such as lithium in Sonora. These factors are benefiting northern Mexico the most, so the main opportunities are there. Some policies have affected the image of the sector. However, the main laws remain

Craig Gibson Technical Director of ProDeMin

unchanged. There has been less exploration in recent years but without registering a drastic drop and I do not think this will happen anytime soon.

In Mexico, the first wave of Canadian Junior mining companies had tremendous exploration success. With their high tolerance for risk and early-stage exploration expertise, Canadian Juniors took historic projects mined by the Spanish over 400 years and expanded them into district-scale projects. They also discovered entirely new districts, such as the Guerrero Gold Belt. However, Mexico is still massively under-explored. The first wave focused on the “easy pickings.” This second wave can take advantage of advancements in exploration technology in the past 10 years that include satellite imaging, with resolutions that were not previously

Jorge Ramiro Monroy CEO and Founder of Reyna Silver

available, better ways to interpret geophysics and the use of Big Data to process exploration data. I am excited to be part of this new wave of exploration with Reyna Silver.

Mexico is home to world-class deposits and is well suited for hosting mineral deposits and in particular CRD. After reviewing many exploration opportunities, we believe that Sonora, Mexico is a great place to be. The easiest deposits to work with have already been found, so we rely more on remote sensing techniques to guide us in our exploration and this is where geophysics plays an important role. There is geophysical data that was obtained in previous geophysical surveys and now we are reinterpreting it with modern techniques. The results of these efforts must be used together. There is no single technique that will take us to the

Steve Robertson CEO of Infinitum Copper

final goal. However, if we use all these techniques effectively, we will increase our odds of success.

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from the

Q: How advanced are the company’s short-term objectives for exploration at the Cerro Caliche project? A: We started working on the project about five years ago, so we have been involved in it for quite some time. We have been drilling for at least four years. Last year, we drilled more than 10,000m, a significant amount. Our best drilling was in the previous two years, which was around 25,000m. I think we have done very well in our program and we are excited to continue. Q: How will the governmental transition in Sonora resulting from the midterm elections impact the Cerro Caliche and San Marcial projects? A: We do not know exactly what impact it could have. However, we are very attentive to the elections and its results. I hope that we can achieve a friendly government that supports the mining sector and its opportunities, such as those we are working on. Hopefully, it will also be the same case at the federal level. These midterm elections were very important and I just hope that the next governor continues to be very friendly and supportive of the sector. Q: What is your experience in the discovery and development of resource deposits?

Melvin Herdrick

A: I have been in Mexico for about 25 years, or half of my career. In Mexico, the environment for gold and copper exploration has been good and encouraging. Meanwhile, silver

Vice President, Exploration of Sonoro Metals Corp

is often found as an associated mineral and that has been the case for Sonoro. We have some silver associated with the gold mineralization that we found at Cerro Caliche and San Marcial. Our long-term project is San Marcial, while in the short term we are working to develop and ensure that the resource is

Sonoro to Become a Producing Mining Company in 2021

very well defined in Cerro Caliche. Q: In addition to your experience and leadership, what characteristics make Sonoro a truly modern exploration company? A: This is due mainly to its people. We have a very good quality team, mostly local workers and well-trained geologists and engineers who have a great deal of experience with other mines that have been developed and are in production in Sonora, as well as other states. Technologically, Sonora is a very strong industrial city. It is a developing labor state and its industry is really strong. The local communities are also well trained, experienced and can operate heavy equipment. Contractors are available, their prices are very reasonable and their skills are very good. Q: How are Sonoro Gold’s ESG efforts also being implemented in Cerro Caliche’s exploration and development program? A: Depending on the size of the program, we initiate permitting procedures that verify the condition of the land and establish limits that we need to maintain to affect it as little as possible. Our goal is to reduce our negative impact and address the possible damage that we may cause. Sonoro believes that if we build a mine, it will be for the long term

and we ensure that its development allows a good future for the area and its resources, such as water. Therefore, if there is an area where process chemicals are used, we will monitor it and make sure it is highly protected to prevent leaks. In addition, we always try to add eight to 10 years to the mine life so that communities can adapt and benefit from it as well. Q: How is the elaboration of the 43-101 resource estimate and the PEA going so far? A: Currently, we are trying to fully drill and define the resource on our property. We have more drilling to do. In addition, we are trying to provide all that data efficiently and quickly to independent companies that are doing the evaluations and calculations for the resource estimate. We sent 5.5 tons of material to the professional laboratory in Reno that is conducting metallurgical testing. Due to the requirements of the national instrument 43-101, we have to do it in independent laboratories that are internationally recognized for their quality work. In the end, we hope to double our resource estimate and have a very good quality independent report – the PEA. Once it is finished, we will know more about the mine, the recovery, how to proceed and how much investors are willing to contribute. Q: What factors will determine the start of production of Cerro Caliche in the last quarter of 2021? A: A determining factor will be the PEA. In addition, the price of commodities and production costs, which are based on other nearby mines that are operating with the same type of material. We also have to reach some agreements to further develop the project and obtain government permits to operate the mine. We need the government’s cooperation to start production at Cerro Caliche but the final determining factors will be our investors and the data we provide them. Q: What is the potential of San Marcial and what are your main exploration objectives and strategies for 2021? A: I think it has very good potential. We had a little land issue that is slowly being resolved but I think the geological and overall potential for resource development is really good. This is what we will focus on in early 2022, but we have an ongoing plan to start drilling. We stopped drilling for a couple of years but we want to resume so we can start defining the resource there as well.

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VIEW TOP Exploration & Discovery Potential | 62

from the

Q: What services does O’Gorman and Hagerman offer the mining sector? A: Our firm specializes in land, real estate and infrastructure. We help our clients in the mining industry with real estate acquisitions, as well as helping them navigate regulations and laws related to rights of way and other land issues. At O’Gorman and Hagerman, we collect real and validated data in regard to real estate. Q. What common challenges do you face in the industry? A: The most common challenge is the land tenure, which is due to a number of irregularities, such as the registration, contracts, agreements, municipal councils, urban construction, public and national registries. All of these create uncertainty in the mining sector, especially when it comes to property. There are many things that need to be considered in regard to land. Factors such as historical background, community traditions, informal real estate agreements and even the landowners themselves could make an operation challenging for our clients. We assist our clients in communicating with the owners of the land in question. We also specialize in community engagement in regard to social services. Q: What are your expectations regarding concessions and social permits in Mexico?

Manuel Sainz

A: The permitting situation is related to the current government and we are still monitoring and assessing the situation. Certainly, the relationship between the mining industry and the government

Partner at O’Gorman & Hagerman

could improve. However, real estate issues will always be present. Irregularities will persist; therefore, we are required to be there to assist our clients, allowing them to better monitor their projects. Q: How can companies avoid land and social problems?

Land Disputes: Common Challenge That Must Be Properly Addressed

A: Our recommendation is to audit the land, as well as the communities that live in the area. Understanding their origins, interests, history and traditions will provide an accurate land appraisal. With this information, companies will have a better understanding of the community and establish long-lasting relationships. Q: How can companies reach out to communities when there are mining road blocks? A: There should be a middleman who understands the problem. This person should want to achieve a favorable outcome for both parties. It should also be a local person. Employing a local community member in this role prevents any form of cultural and economic confusion about the land. It also allows both parties to properly express their visions, interests and the benefits they would like to achieve. As a company, you must be completely aware of the stakeholders. Without an understanding of the people, your project will not make any progress. Road and mine blockades are considered a rural matter;

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therefore, we need to be extremely strict when it comes to the way we document data. There will always be issues when it comes to land control. It is a limited resource and it is heavily protected by the Constitution. O’Gorman & Hagerman knows how to navigate these issues.

So Much Yet to Be Discovered Jorge Ramiro Monroy CEO & Founder at Reyna Silver

Defiance Silver’s Drill Program Defines New Zones 08/05/2021

Orla Mining’s Results Confirm Higher Grade Gold Zones 08/04/2021

Capitan Mining Announces Peñoles Drill Results 05/21/2021

Drilling Campaign to Be Accelerated at Reyna’s Guigui Project 06/30/2021

Napoleon’s Southern Zone With the Highest Grade in the Area 06/24/2021

New Agreement to Continue Developing the Panuco Project 06/02/2021

Suspension of Concessions Expected to Continue 06/23/2021

Greater Potential for Bolañitos Mine 05/21/2021

Almaden Is Working to Identify More Targets at Its Ixtaca Project 06/15/2021

Development & Innovation Once mining companies have identified valuable deposits and have all the necessary permits, project development can start, always prioritizing safety, financial operability and ESG aspects. A key success factor for the development of a mining project is the adoption of new technologies, standards and processes. In Mexico, the first wave of mining companies that arrived in the country took projects and transformed them into district-scale ventures, which later became the foundation of the Mexican mining sector. The new wave of companies is taking advantage of new technologies, marking a new era for the development of more efficient, safer and environmentally and socially responsible projects. The industry’s workforce also plays a key role in the successful development of a project. Mining companies must ensure their staff share the company’s vision and values so employees are committed to the project. In addition, companies must provide ongoing training and feedback to help people meet the challenges of the industry and take advantage of its opportunities. ESG performance is essential in project development to help companies prevent and address any social or environmental conflict that may compromise workflows. Green projects, local contracting, community projects and establishing real relationships with nearby communities and authorities reduce various risks and facilitate the rapid development of projects.

Development & Innovation

Analysis Permits: Best Practice or a Barrier?

Conference Highlights ESG Is Already in Mining’s DNA But Communication Can Improve

Expert Contributor Pablo Méndez Alvidrez | President of CLUMIN

View From the Top Adolfo Calatayud | Tax Controversy, Dispute Resolution Lead Partner in Mexico and LATAM at PwC

View From the Top Jim Norine | Director for Minerals and Metals at Ausenco Southwest

Conference Highlights Mexico Must Amplify Exploration to Reap Rewards Like Juanicipio

Analysis Impact of Safety Improvements on Mining Operations

View From the Top John McCluskey | CEO of Alamos Gold

View From the Top Warren Rehn | President and CEO of Golden Minerals Company

Roundtable How Does Your Social Approach Strengthen Your Operations and Communities?

View From the Top Richard Matthews | CEO of RPMGlobal

View From the Top Dan Mirabent | Vice President of Operations Mexico at JDS Kaeli Gattens | Director of ESG at JDS

Spotlight High-Performance Gearboxes for Winch Applications

Content Links

Development & Innovation | 67

Permits: Best Practice or a Barrier? Moving from exploration to production in Mexico’s mining industry is increasingly challenging, partly because of the difficulty in obtaining permits as authorities raise the bar for a more sustainable industry. What is unclear is whether the tightened standards are truly linked to the desire to implement best practices or borne

NORMS AND REGULATIONS A MINING PROJECT MUST COMPLY WITH

of misconceptions surrounding the industry. “Mining projects are paralyzed for two main reasons: difficulties in obtaining 536

Work and safety Health

Fernando Alanis, President of CAMIMEX.

33 15

Defense

concessions and several MIAs paralyzed at SEMARNAT,” says

President López Obrador has reiterated on several occasions that

Environmental

his government will not grant concessions and permits because the

156

industry has seriously affected the environment and communities,

Agrarian

with its wealth only benefitting private companies. “In the past,

Fiscal

many concessions and permits were granted to foreign companies.

Energy

against the environment. Mining companies must act righteously;

We are not going to continue giving concessions or permits that go taking care of the environment and not destroying the territory,”

141

Mining

said López Obrador on March 11, 2021.

Public works

Minister of SEMARNAT María Luisa Albores adds that while

Other 0

100

mining is a fundamental economic activity for the country, it 200

300

400

500

600

has a significant impact on the environment and communities. As a result, the government has an obligation to regulate the

Source: SEMARNAT

activity. “Mining has caused several socio-environmental conflicts. Previously, with the complicity of governments, mining companies have devastated ecosystems and hydrological basins, polluting entire regions and directly affecting the health of inhabitants.” Albores says that SEMARNAT will carry out follow-up visits to mining projects, reformulate the technical committee of the Mining Trust to do remediation work and provide health assistance and investigate complaints against public authorities. “The mining of the future in Mexico will respect the environment, consult the communities, respect their will and provide fair taxes.” CAMIMEX members have rejected the government’s accusations, arguing that mining respects and promotes environmental and community protection norms. The chamber has said that it is aware of the negative impacts resulting from mining if the industry is left unchecked and, as a result, its members invest in resource optimization, including water and energy, through the implementation of modern technologies that help to conserve biodiversity. Furthermore, mining is among the most regulated industries in Mexico, abiding by several laws and standards regarding hazardous waste, wastewater discharge and hydrocarbon limits in the soil, among others, as well as other related to direct exploration, tailings dams and gold and silver leaching, all of which seek to lessen the environmental impact. “Past mining practices are not the same as current practices and the laws and circumstances have also changed. The past must be judged based on facts from the past and we must learn for the present and move forward toward a better future. Public policies on mining should be aimed toward strengthening the activity within the existing legal framework, the application of the rule Read the complete article More about this topic

of law and respect for human rights. Trying to ban mining would be like denying the very essence of the country,” says Karina Rodríguez Matus, Partner at Rodríguez, Matus & Feregrino.

Conference

Development & Innovation | 68

Highlights

ESG Is Already in Mining’s DNA But Communication Can Improve Kenneth McLeod CEO of Sonoro Gold Corp

Euridice González Country Manager at Coeur Mexicana

Jim Norine

ESG criteria are a cornerstone for doing business in 2021. These practices play a fundamental role in regulation compliance and the handing out of crucial permits, as well as guiding investors and serving as a major benchmark for funding decisions. Yet, ESG goes beyond these considerations, says Jim Norine, Director Minerals of the Americas at Ausenco. “The ESG initiative is about doing the right thing; doing what you are supposed to do. There should not be a cost associated when it comes down to ESG, since this is a big part of what we do.” Mining undoubtedly has an impact on the environment and on communities. For Euridice González, Country Manager of Coeur Mexicana, this means that mining companies must leave a net positive impact behind as the industry is crucial to the global economy. “Without mining, we would not have most of these products that we rely on so much,” she says.

Director Minerals, Americas at Ausenco

Barry Quiroz President of Sapuchi Minera

Whether framed in the sense of ESG criteria or not, environmental and social standards are at the core of many companies like Coeur Mining. “We pursue a higher standard in integrity and ethics in all our operations,” says González. ESG has also been at the top of the mind for Barry Quiror, President of Sapuchi Minera. The Sapuchi project hopes to get crucial permits approved soon. “We expect our environmental permit to be approved in late October 2021 and a second permit needed to go toward our construction and production to be approved by the end of 2021 or 1Q22,” he says. ESG criteria will only continue to grow in importance, in particular with the advance of climate change challenges, highlights Kenneth McLeod, CEO of Sonoro Gold. “A new set of laws will soon be presented to us as a result of the 2015 Paris Agreements on climate change,” he says. No matter how much work is involved, McLeod believes that mines must become more sustainable. For instance, in Mexico mining companies face some problems when looking to tackle emissions. “Mexico is not rich in renewable energy when you look at it,” says McLeod. Mines use a lot of energy in their operations, after all. Having to buy carbon credits with “arbitrary, even predatory” prices is not a feasible approach but mines can take measures to become more energy efficient by turning to state-of-the-art equipment. Industry leaders agree that even though a good mining company does what it can to keep an optimal ESG track record, miners could do more to report on their efforts, both to communities and

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to the rest of the world. “We need to use modern communication technologies to spread the word about what mining really does and can mean for the world,” says González.

lthough the mining industry has made significant progress in our country, it has also been involved in legal, community and environmental controversies. Historically, there have been testimonials, mainly from ejidal and indigenous communities, who

have strongly opposed the mining industry’s activities. The main argument is that these activities tend to have an irreversible impact on the environment. This has strongly stigmatized the mining industry as a harmful sector for the community and due to the international recognition of human rights, today, there is strong criticism against these megaprojects based on the argument that they are disproportionate to the impact they generate; in particular, the development of open-pit mining projects. Mining is distinguished by its development in three phases: exploration, exploitation and benefit. The exploration stage is the most important within any project, since the exploration viability of the project is defined based on the results provided

Development & Innovation | 69

by the geological studies, for which various drillings are usually

Mining Faces New Challenges, Environmental Authorization Delays Pablo Méndez Alvidrez President of CLUMIN

carried out to extract soil samples and measure ore availability. Environmental studies are completed in this stage, approved by SEMARNAT, to calculate the adverse effects that the project may cause to the environment, as well as the preventive measures that the mining company must carry out to mitigate the negative effects that the activities will generate. To gain SEMARNAT approval, the projects must comply with all the environmental requirements established by the environmental legislation; otherwise, SEMARNAT is entitled to deny the Environmental Impact Statement and suspend the project’s mining activities indefinitely. In recent years, SEMARNAT has denied various requests for mining projects that involve open-pit extractive processes, consequently generating distrust among the authorities in these types of megaprojects. A notable example is the “Ixtaca” project of the Canadian company Almaden Minerals Ltd., which is located in the Sierra Norte in the state of Puebla. This project has been in the exploration stage since 2013. It has not been able to advance with its activities due to constant legal conflicts with the Tecoltemic ejido, who suspended the project through an amparo/ constitutional trial. It was not until last year that SEMARNAT definitively denied the project an Environmental Impact Statement due to the lack of essential requirements, which implies that as of today, the company is not allowed to carry out the project’s stages. It is quite clear that the current recognition of human rights has prompted government agencies to listen to the voice of the ejidal and indigenous communities, and, therefore, to strictly enforce mining and environmental regulations. The greatest challenge that the mining industry faces is not related with the permissibility of the authorities when approving or denying the applications of their projects or with the recognition of the rights of the ejidal and indigenous communities, but with the current stigmatization that exists on mining activities in our country, which, unfortunately, is generally unfounded.

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Today, companies must not only comply with the mining regulations but must also protect these sectors to overcome the stigmatizations that have historically marked the mining industry. Only in this way will the Mexican community recognize the true achievements the mining industry generates for our country.

VIEW TOP Development & Innovation | 70

from the

Q: In regard to judicial certainty, what should be done to provide investors with peace of mind? A: While there are a number of factors that contribute to investors’ piece of mind, the most important factor today is certainty. For the past three years, ESG goals have been incorporated into the plans of many companies and they are using these to create long-term value, which I believe is the new trend in regard to the mining business. What stakeholders are looking for is a long-term mining operation that applies ESG practices, with the certainty that the legal framework they operate under today will be the same tomorrow. This can allow companies to take more chances with their investment, thereby creating long-term value for investors. Q: What are mining industry’s main judicial challenges and how is PwC supporting its clients in this regard? A: One of the main challenges that companies face today relates to SAT’s fiscal policies. The government agency recently released its list of official tax industry percentages, which includes mining. This tool allows companies to look at their effective rate and compare it against the list to determine if they are clear. We help clients by creating a preventive strategy. In addition,

Adolfo Calatayud

we advise companies on their data management. The entire tax landscape has become more complex because companies are managing an increasing amount of information. In addition, new outsourcing restrictions are a major setback

Tax Controversy, Dispute Resolution Lead Partner in Mexico and LATAM at PwC

for the industry, which employs many foreign contractors. Our consulting focuses on creating solid data management technologies for our clients that enables them to develop preventive strategies, with the goal of creating a sense of stronger business certainty.

Achieving LongTerm Value Through ESG Practices

We also help our clients with the operating costs of metal prices. We always look at different ways to help reduce costs while simultaneously improving a mine’s performance. The volatility of metal prices is exclusive to the mining industry, so we place much of our focus on our client’s performance. We also help mining companies improve their ESG goals, as well as advising them on the ideal way to communicate their practices. Mining has always considered safety an essential element in its practices, especially for staff but also for the community. Therefore, we are helping mining companies include ESG goals in all of their safety planning by helping them improve their practices. We want companies to understand that having a good ESG performance can translate into increased investment and better returns for their investors. Q: How does PwC help mining companies with their ESG reporting and compliance? A: One of the advantages that we have at PwC is that we are a global company. In regard to ESG, we look at other countries

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and analyze how their mining sectors are operating. We take that information and present it to our clients as a reference for improving their ESG performances. Sometimes companies need to see another company’s practices to understand their true value and to properly incorporate them.

VIEW TOP Development & Innovation | 71

from the

Q: What opportunities do you consider the right fit for Ausenco? A: At Ausenco, we value our clients, and we believe in helping them build better businesses. We design and build the projects that our clients need; always with attention to safety, operability, and financial success. We are always striving to find a better way through creativity, flexibility, and innovation, and we are interested in working with clients that are also looking for the best way to accomplish their project. Right now, we are focusing on precious and base metals. We are looking at copper, nickel, gold, silver, lead and zinc as our core business and that is where we are going to continue growing our expertise. Q: How does Ausenco manage the turnkey system and make it a successful business model? A: We like to get in early and build out the pricing uncertainty. This allows us to identify where there is certainty and where there is uncertainty. I have been very impressed with Ausenco’s designs because their work is efficient and well suited. It is about getting in early, having a good design and building cost certainty around that. We also have extensive benchmarking experience from projects we have built, and we

Jim Norine

use that as a comparison for our new projects. Q: How does Ausenco introduce new technologies to the Mexican market?

Director for Minerals and Metals at Ausenco Southwest

A: We have a special division that is essentially a focus group. It is called Emerging Process Technologies. That group focuses on looking for non-conventional, non-traditional methods of increasing production, often for lower grade

Success Recipe: Get in Early, Design Well, Build Cost Certainty

ore. We include solutions like ore sorting and coarse particle flotation. Truth be told, many junior mines are very welcoming to new technologies and new ideas, mainly because the owners of those companies are looking for better ways to satisfy their stockholders. Some major mining companies have also been open to trying some of our solutions, but the reality is that those big companies probably have their own people looking at new technologies from within. Q: To what extent do Ausenco’s technologies focus on addressing potential environmental risks? A: The ESG initiative is about doing the right thing; doing what you are supposed to do. There should not be a cost associated when it comes down to ESG since this is a big part of what we do. Ausenco has a longstanding commitment to sustainability. Our success and reputation are built on developing innovative designs to reduce footprints and environmental impacts. Our designs focus on eliminating waste, such as using less steel and concrete. In regard to green initiatives on energy, we are seeing more of those. In Mexico, the CFE can have a

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reputation for maybe being a bit particular in regard to certain procedures that take a great deal of time and a great deal of money. So, we are certainly seeing many owners now that are entertaining ideas of incorporating solar and natural gas turbines for self-generation of power.

Conference

Highlights Development & Innovation | 72

s the world’s No. 1 silver producer, Mexico’s potential is boosted by a bullish market and growing demand. For the country to make optimal use of this opportunity, longterm exploration, successful operations

and regulatory certainty need to be up to par. MAG Silver and its Fresnillo’s Juanicipio project is one example that is gearing up to play a key role in the industry, making good on this promise. In 2020, Mexico produced approximately 178 million oz of silver, beating Peru and its 110 million oz by a landslide. Fresnillo, located in Zacatecas, is the world’s primary silver camp, but it certainly is not the only asset Mexico can count on. “Looking at camps that have produced over 1 billion oz of silver, Mexico takes up eight spots in the Top 15,” says Peter Megaw, CEO of Canadian exploration and development company MAG Silver. What makes Mexico so special when it comes to its silver is hard to pin down, Megaw says. “But what is more important is that people recognize this potential and, crucially, know where to look in their exploration efforts. Experts already note

Mexico Must Amplify Exploration to Reap Rewards Like Juanicipio Dr. Peter Megaw CXO of MAG Silver

that silver has been bullish for a while now but that demand could grow even further in the long term.” “Fresnillo is cautiously bullish about the price of gold and silver in the near future. We expect prices to be at a good level in 2021,” adds Octavio Alvídrez, CEO of Fresnillo plc. Mining has had a long and rich history in Mexico. “Historic global silver production has been between 48 and 50 billion oz, of which 20 billion oz have come from Mexico,” says Megaw. Part of this production goes back many centuries: “Conquistadors came for gold but stayed for the silver. It was silver that supported the Spanish empire for several centuries.” Landmark silver vein discoveries go back as far as 1522. In Megaw’s point of view, this makes silver the “economic heart” of Mexico. Carbonate Replacement deposits (CRDs) and epithermal vein systems offer riches under the surface but many remain unexplored. Nevertheless, Megaw does not agree with the notion that exploration is coming to a standstill. “Exploration in Mexico is not dead. There have been decades with low production and exploration but since the 1991 Mining Law and the rise in metal prices in 2003, it has grown exponentially,” he says. Much can be done by looking just past existing production, such as in the Fresnillo district. Here, Megaw highlights the Santo Nino vein, discovered in 1975 and which yielded over 5,000 g/t of silver. The San Carlos vein found in 1997 is 6km long. Further exploration is crucial for Mexico’s development. “If you explore you can find crucial silver deposits with a long-term life cycle. Knowing that demand will only go up, you can support both the Mexican and the local economy to the fullest for many years to come,” says Megaw. Now that the clean energy transition is picking up steam, silver is expected to become more in demand as a core component for renewable energy technologies.

For MAG Silver, a key recent discovery is that of Juanicipio, also located in the Fresnillo mining trend. Here, MAG also discovered the 6.35m-long Valdecañas vein, featuring almost 2km of gold, various grams of silver, as well as lead and zinc, located 350m below the ground. Altogether, a rather promising prospect. MAG announced an update regarding its Juanicipio project for 1H21 in August 2021: a recently-started production of 80,830 tons yielded 835,706 oz of silver, 1,340 oz of gold, 270 tons of lead and 408 tons of zinc. MAG Silver owns 44 percent of the project in a joint venture with Fresnillo, which owns the 56 percent majority. Production is expected to ramp up fast, according to Fresnillo. “The Juanicipio plant is expected to come in on budget and as scheduled to commence commissioning during the 4Q21, reaching 40 to 50 percent of its 4,000tpd nameplate capacity by the end of 2021 and reaching 90 to 95 percent of its nameplate capacity in 2022,” reported the companies earlier this year. The project’s mill and flotation plant are under construction and expected to be completed soon. Megaw stresses that the realities of mining need to be addressed if Mexico truly wants to remain the No. 1 silver producer. “Mining and exploration are high risk, high-cost longterm endeavors,” says Megaw, with only one out of 3,000 prospects becoming a mine. It then takes 10 to 20 years to move a discovery toward production. “To maintain production, you must maintain exploration. If we want to be successful, miners must be sure about long-term investments, rule of law and regulatory frameworks,” he says. Megaw emphasizes that all further developments depend on having confidence in the Mexican political system in the long term, so the country’s regulatory framework should be strengthened further. “If Mexico strengthens its regulatory framework, it will continue to be the world’s leading silver producer. Its exploration potential is tremendous and there are still many deposits to discover.” Keeping mining’s ESG track record in mind is equally crucial. “Going beyond the regulatory standards regarding social and environmental issues is simply the right thing to do. We need to be responsible and recognize that any mess that comes our way eventually affects everyone else in the world,” says Megaw.

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Development & Innovation | 74

Impact of Safety Improvements on Mining Operations ACCIDENT RATES PER 100 WORKERS

Mining is among the most dangerous industries in the world. Globally, there are more than 15,000 mining-related deaths

National Average

per year. However, mining is not necessarily unsafe. The

Mining (CAMIMEX) Food Processing

by improving its standards and technologies. Although the zero-harm goal has not been reached, companies are

2.74

Land Transport Public Administration

getting closer.

2.65

Professional and Technical Services

“If a company cannot mine safely, it should not mine at all.

2.44

Health and safety need to be central to all mining and metals operations and processes to eliminate workplace-related

1.24

Manufacturing of Metal Products

fatalities, injuries and disease,” ICMM said in a statement.

1.23

Construction of Buildings and Civil Engineering Works Assembly of Transport Equipment

industry has significantly reduced its death and injury rates

2.98

According to World Counts, the mining sector is responsible

1.1

for around 15,000 worker deaths per year. The most common accidents in mining are related to structural failure,

1.1 0

rockslides, transportation, machinery, energy isolation, falling 2

objects, working at height, fires and explosions, confined spaces and hazardous material, among others. Despite the

Source: CAMIMEX

many risks associated with mining, activities can be done safely. Companies can prevent accidents by incorporating effective risk management into their activities. ICMM says that procedures and safety frameworks are not universal, however. They must be adapted to the conditions of the mine and the workers. “Safety requires leadership, investment and an unwavering commitment to the goal of zero harm with a priority toward zero fatalities,” said ICMM in a statement. The Mexican mining sector has constantly sought to prevent

ACCIDENT RATES AT WORKPLACES RECOGNIZED AS SAFE COMPANIES

risks and accidents by applying more rigorous standards and procedures that allow mines to be productive without neglecting their personnel, CAMIMEX said in its 2020 report on sustainability. In 2019, CAMIMEX members reported an

Recognition level

Number of workers

Accident Rate

Variation against national average (%)

First level

26,013

1.79

-10.65

Second level

12,512

0.91

-54.5

Third level

13,040

0.52

-74

Third level revalidation

4,964

0.44

-78

incidence rate of 1.24 accidents per 100 workers, which shows

(US$75.086 million) to improve the safety of their employees

a reduction of 24 percent against 2018 records. The incidence rate in the sector is 36 percent below the national average. CAMIMEX affiliated companies also invested MX$1.5 billion in 2019. Likewise, mining personnel logged 1,204,385 hours of mining-related training, as well as 59,018 hours of training in labor rights. Regarding workers’ health, 63,978 medical examinations were carried out among employees from companies affiliated to CAMIMEX. However, there are still some health and safety gaps that

Source: CAMIMEX

need to be addressed in Mexico. In 2019, a total of 20 fatal accidents were registered by CAMIMEX, which were investigated to establish the causes and implement actions to prevent such accidents from happening again. “Despite security standards and safety parameters for companies, Mexico still has a high mortality rate due to accidents that could have been prevented. Several companies have high security standards; however, there are others that do not Read the complete article More about this topic

enforce the same protocols and unfortunately, these are where most accidents occur,” says Carlos Villacian, Director of Business Unit Latin America North at MSA Safety.

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from the

Q: What key areas has the company prioritized to continue its strong gold operation in Mulatos? A: Operational efficiency and productivity are key to having a long-term sustainable business in gold mining, which is why we are focused on controlling costs and finding ways to operate more efficiently. We have invested in increasing the scale of the operation to reduce costs. We started the mine at 6,500 tons per day, increased it to 10,000 tons per day and now we produce 20,000 tons a day. Q: What are some innovative technologies that are helping improve operations at Mulatos? A: Slope stability is critical for us to maintain safe operations. We have been using radar technology for several years to monitor the stability of our slopes, which has given us the ability to identify even the smallest fault within the open pit. Sometimes good performance is not about software, equipment or technology but mainly about people and that is our approach when we teach safety standards and methods. We have a program called the Home Safe Everyday Program, which is considered a sophisticated way of teaching techniques and methodologies to our workers. Q: Why did the company decide to connect the Mulatos mine to a power grid?

John McCluskey

A: It significantly reduces our carbon footprint. We have been meaning to do this for a while but there have been a number of hurdles to getting our line. There were many issues regarding

CEO of Alamos Gold

land ownership and other parties involved. But in the end, we succeeded and now we can deliver significant reductions in our environmental impact. The power grid also has an impact on costs, as we are moving away from diesel. This is a change that will allow us to be a cleaner and more responsible

Operational Efficiency Based on Responsible Practices

operating mine. Q: How would you describe Alamos’ approach to communities? A: Alamos has a very broad understanding and commitment to the ideal of operating in an environmentally sensitive way but also in a way that addresses pressing social issues of the host communities. When we first arrived in Mexico, local people looked at us with great suspicion. Therefore, we knew we had to work hard to create close relationships and could not start a project without being attentive to the communities. To improve their quality of life, we had to focus on three key areas: infrastructure, health and education. We have made significant progress and have been recognized on several occasions by CAMIMEX and human rights organizations. Q: What are the company’s environmental goals? A: We have focused on reducing our carbon footprint and implementing better water management. Sonora’s climate changes often; sometimes it rains a lot and sometimes it is very dry. Therefore, we have had to find ways to use and

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manage water effectively. We have done a better job over the years and now Alamos is a great water recycler. Additionally, Alamos continues to rehabilitate the environment. We started production in 2005 and rehabilitation in 2006. This is an ongoing environmental effort.

VIEW TOP Development & Innovation | 76

from the

Q: What results did you obtain from using the BIOX technology at the Velardeña project? A: The Velardeña project is a poly-metallic gold and silver vein deposit. Using BIOX technology means we do not need to sell the pyrite concentrate directly to the smelters. It gives us the opportunity to oxidize the pyrite and arsenopyrite artificially, using sulfur-metabolizing bacteria. Once it is oxidized, we process that material at our cyanide plant at Velardeña, where we extract the gold and start pouring gold bars. With BIOX, we get 90 percent payable recovery of the material compared to the 20 to 30 percent that we were obtaining previously. Q: What is the process for embracing new technologies such as BIOX to make operations more efficient? A: There are no active bio-oxidation facilities for precious metals in North America, although there have been a few trial plants. This technology is operating successfully in Africa and Australia, under conditions that are essentially identical to the conditions in Mexico. It has just been a very slow process to get the mining community to re-engage with this technology. The advantage of bio-oxidation as opposed to pressure oxidation is the much lower capital cost of the equipment. Bio-oxidation involves stainless-steel tanks that use atmospheric pressure. We are looking forward to introducing the first bio-oxidation plant in Mexico and North America.

Warren Rehn

Q: How will the Rodeo project support the company on its road to success?

President and CEO of Golden Minerals Company

A: This was the most important project for the company this year because it allowed us to transform from being solely an exploration company to being a profitable producing company. The Rodeo mine gave us a unique opportunity at a very low capital cost of about a US$1 million pre-production investment to

New Tech Helps Close Cost Gaps and Enhance Gold Recoveries

get up and running and transform the company into a profitable business at very low risk. This project was key to our transformation, and I cannot stress enough how important it was to have the cooperation of the permitting agencies in Durango and the infrastructure available to us. Q: How is Golden Minerals incorporating ESG at Rodeo? A: We go through all the steps to get the environmental permissions required and we have really focused on making sure we meet all requirements to get that process underway. With regard to sustainability, we would very much like to be able to continue beyond the initial two-and-a-half-year life span of the mine. Today, we are considered an important employer in the Rodeo area. Some of these rural areas in Mexico do not have many opportunities for employment and this is why it is important for us to maintain a good relationship with the community. In the case of Rodeo, we are on a private ranch and we have a good working

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relationship with both the ranch owner and the surrounding community. We put a lot of effort into making sure that our communication is open, with very transparent disclosures to the parties involved in the permitting and sustaining processes of the mining operation.

Development & Innovation | 77

How Does Your Social Approach Strengthen Your Operations and Communities?

Mining plays an important social role as a driver of socioeconomic development in communities, especially in remote or marginalized areas where opportunities are limited. However, a bad relationship with communities can create tension and put projects at risk. MBN asked experts from leading mining companies in Mexico about their social approach and how they are ensuring a stable and fruitful relationship with communities.

Normally, when the industry refers to social practices, it talks about community relations. However, we prefer to focus on social performance. We do not seek only to participate with the communities, but to jointly build projects. An example is that, in 2019, in the Matarachi community, we started a project for its long-term development. We asked them what they wanted the community to look like after the mine disappeared so we could develop a plan and jointly create the future they want. Former Mining Undersecretary Francisco Quiroga said that we have a very interesting community approach because we build citizenship. The easiest thing is to donate resources, but

José Tovar

generating participation and decision-making processes is a more challenging task.

Community Relations of Alamos Gold

At Osisko and Sapuchi Minera, we make an effort to carry out the same social projects that are implemented in Canada. We want to be the new generation of explorers and developers, while placing the best sustainability practices at the center of our business. We analyze our operations for the best way to promote long-lasting and effective social development in neighboring communities. I believe that society will not allow mining companies to operate as they used to. We need to redesign the way we do mining. We need to care for our workforce, making sure that everybody

Barry Quiroz President of Osisko

makes it home safely. That means going the extra mile for the communities to understand how a mine can interact with them to promote growth on both sides.

We want Guanajuato Silver to be a different company from many others that are working in Mexico. If you look at other companies in the country, they like to brag about hiring a lot of Mexican workers but they very rarely put them in charge. I believe that not doing that is a big business mistake, one that we do not intent to make ourselves. Our COO is Hernán Dorado. He is a graduate from the University of Guanajuato. Moreover, in our board of directors is Ramón Dávila, who has the best CV as a Mexican miner. Having these partners really helps us in connecting with the local communities. We are planning to hire

Diana Catarino Manager for Mexico and Central America at IMDEX

over 250 people, where the vast majority are Mexicans from Guanajuato.

VIEW TOP Development & Innovation | 78

from the

Q: How is RPMGlobal working with clients to reach their ESG goals? A: We consider ourselves leaders in the industry in terms of software advisory. We have been in business for 50 years and our global advisory business covers everything from how to build or operate a mine to buying or selling one. ESG is important to us because it is important to our customers. Clients need to meet a number of specific and strict regulations and requirements. We work with all mining companies but mainly Tier 1 and Tier 2 companies that consider ESG an essential part of their business. Although we work on ESG on a global scale we wanted to build an ESG company exclusively for mining. To this end, we bought the ESG company Nitro Solution and we are continuing to review a number of potential acquisition targets within ESG in both advisory and software. Our goal is to become the ESG mining advisory company of choice. We want to help our client decarbonize as quickly as they can. Q: How will the acquisition of Nitro Solutions help you develop a robust technological offering? A: We really want to build an ESG software platform for mining companies. ESG is about reporting how you are doing

Richard Matthews

against ESG targets and what your goals and objectives are. No other company has the software that can help businesses gather all this information. There are two reasons we acquired Nitro: their ESG skillset and our desire to build an IT platform

CEO of RPMGlobal

that can provide these services to the whole industry. Q: How do you simulate the continuous nature of mining operations?

The Transformation of Mining Through Cloud Software

A: We originally started with a desktop product called TALPAC, which would eventually become the standard for simulating haulage and loading in the mining industry. Over time and as new solutions were required, we wanted to build a simulation engine that could build a 3D mine model. We are now moving this technology toward electrification with items such as simulating haulage electrification, placement of trolley infrastructure and battery stations as well as hydrogen vehicles, all with an ESG focus. Once functional, clients are able to easily simulate the differences between diesel and electrified trucks. Q: What were the challenges of transitioning to cloud service and what does that mean for future mining solutions? A: When you look at every industry, the two at the bottom when it comes to digitalization are construction and mining. When the team first entered the mining industry, most mining companies were still using desktop products. At the beginning, we did not get the acceptance that we had hoped for. However, once COVID-19 hit, companies suddenly had the need to operate remotely. What big miners want now is a complete cloud service. Q: How does RPM manage and protect its clients’ data in the cloud?

A: While we do not hold our clients’ data per se we do have very strong security controls, and we are well advanced towards obtaining our ISO 27001 accreditation. Security has become vitally important. Ransomware and cyber criminals keep everyone on their toes when it comes to security. The last thing we want is for somebody to get their hands on our clients’ data, so it is critical for us to have the right security partners and measures in place. Q: How is RPM working to help traditional mining companies transition to technological and zero-emission solutions? A: We provide advisory consultations where we discuss with our clients how they can reach their zero-emission goal. Mining companies really have two key objectives: identify the resource then they need to dig it up and ship it both profitably but also sustainably. All of this requires a great deal of mining equipment and a lot of moving parts. You also have the maintenance control systems, such as those used by Caterpillar and Hitachi. There is a great deal of data coming from the big machines from their maintenance systems, that can be combined with the simulation. We can help mining organizations to put it all together and make sense of the data. Q: Based on your research, what metals should Mexico prioritize in the short term to fuel an overall industrial recovery? A: Copper is going to be the future metal and companies are going to be investing big time in copper. A copper shortage is also expected. According to some articles, in the future, there will be more copper mines than the current number of total mines worldwide. These will however be more difficult to mine so software, data and ESG is going to play a critical part in mining these deposits profitably and sustainably. Q: What does the mining of the future look like for RPM Global? A: The mining of the future will have fewer people. Technology is going to continue to get increasingly stronger and in order to do that we will need data and connectivity of systems on an enterprise level. Today, for example, people are able to operate a mine remotely and you only need people to service the equipment. In 20 to 30 years, with mines in the middle of nowhere, automation might be the only option left and for that you need data to make effective decisions.

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VIEW TOP Development & Innovation | 80

from the

Q: What strategies has JDS Energy & Mining Inc. implemented to transform early-stage projects into fully operational businesses? DM: At JDS, our most effective strategy has been to fully immerse ourselves into our projects, on behalf of our customers, and responsibly work to engage with the local communities as trusted partners across Mexico. We are mine owners and operators that understand capital markets and stakeholder value by co-investing our own capital to set us apart from the competition. Our goal is to leverage our project development and operational experience to offer independent, project-specific support to the investment community. We opened our Hermosillo office in 2006 with the most qualified people in Mexico and continue to provide training

Dan Mirabent

opportunities to empower them with the tools and procedures that have established our global reputation as partners in achieving maximum resource development value.

Vice President of Operations Mexico at JDS

Q: What main challenges do mining companies face when starting and developing a project and how does JDS help them become operational? DM: We believe there are three types of capital required to successfully deliver projects for our customers – financial, intellectual and trust. To this end, we are focused on strengthening our ability to deliver trust capital by staying true to our word. The biggest challenge faced when starting a project is to establish clear expectations and lines of communication with the client to ensure we get the job done safely, responsibly, on time and on budget. Q: What is JDS’s social approach to mining projects and how do you ensure stable and strong relationships with host communities?

Kaeli Gattens

KG: Our team respects and prioritizes local and indigenous communities’ traditional connection to land, culture and values. We are also focused on strengthening our social license to operate by staying true to our word. We steadfastly choose to walk the walk

Director of ESG at JDS

and believe in ongoing engagement, transparent dialogue. Joint venture opportunities are the key to unlocking shared prosperity for local and indigenous communities beyond the projects we deliver. In collaboration with local communities, indigenous

Trust, Key Capital to Successful Operations

partners and other key stakeholders, our team prioritizes the implementation of programs focused on improving quality of life and improving health, education and sport. Q: What environmental considerations does JDS contemplate for the development of a project and what have been the results of this approach? KG: Our core values include no harm to environment, assets, people or reputation. We see ourselves as long-term stewards of natural resources, including land and water and the ecosystems they support. Our team seeks to proactively improve our natural resource management practices and identify hazards to minimize our impact on the environment when possible. In addition, how we close our mines is just as important as how we build and operate them. When done well, mine closure can leave a lasting, positive and sustainable legacy. Our team is committed to integrating closure into our planning, decision-making and activities through

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the entire life cycle of our operated assets to responsibly deliver optimized outcomes for our customers in consultation with local communities and other stakeholders.

SPOTLIGHT

Development & Innovation | 81

High-Performance Gearboxes for Winch Applications In 2021, Reggiana Riduttori introduced its W Series catalog for the mining, marine and construction sectors. The synergy between compact planetary technology and high lifting performance is the main feature of this new series. The expanded range of sizes brings the planetary winch up to 12 and improves the gear ratios, increasing the flexibility of Reggiana’s products. While the new smart-design concept is based on the major markets and internal optimization logistics, the components themselves are standardized so assembly times are reduced to the benefit of delivery and after-sales service. Furthermore, the W Series has been designed to be competitive and capable of meeting the highest quality standards. The winning features of the W Series are compactness and modularity, as well as the special composition and treatment of the oil seals that provide greater protection against external agents, ensuring easy maintenance. Planetary winch drives offer a wide range of applications, offering the same quality of performance and durability. For almost 50 years, Reggiana has been producing planetary and wheel gears that are made entirely in Italy for a wide range of applications in different industries, including mining. The company was founded in 1965 and thanks to its business plan and high-quality products, it has become a global company with a presence on four continents.Reggiana is among the market leaders for planetary winch drives, thanks to its investments Read the complete article More about this company

in research and development, technical product knowledge and experience in specific sectors that allow it to meet specific customer needs.

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Cerro Caliche Is Sonora’s Next Promising Gold Operation Jorge Diaz Vice President of Operations at Sonoro Gold Corp

Minera Cuzcatlán Gets Red Light From SEMARNAT 08/03/2021

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Collaboration Ensures Proper ESG Practices Marcos Gluyas Owner and Managing Director of Gluyas, Construcciones

Telson’s New Agreements to Further Develop Its Mexican Assets 04/29/2021

Production & Optimization Despite being considered highly traditional, mining companies have recently invested heavily in modern technology, such as automation and digitalization, to optimize processes, reduce downtime, create safer work environments and establish good management, social and environmental practices. The COVID-19 pandemic accelerated the implementation of digital and remote solutions so companies could remain productive while keeping workers safe. Yet, despite the many benefits that Mining 4.0 brings to miners, there has been some resistance to its implementation mainly due to the belief that new technologies will drastically reduce the number of job opportunities in the sector. In addition, the multiple challenges battering the sector have prevented companies, some of which have been focused simply on surviving, from making this technological transition a priority. All these factors have made Mexico’s transition to Mining 4.0 slower compared to other mining countries. For the Mexican mining sector to achieve true technological development, it needs the support of the government. Mining companies in Mexico require incentives to adopt these new technological and sustainability trends and, above all, they must stop constantly facing new challenges. Otherwise, growth and technological development will be neither constant nor priorities.

Production & Optimization

Analysis Mexico’s Path to Mining 4.0

Conference Highlights Digitalization Driving the Mine of the Future

View From the Top Carlos Silva | CEO of Santacruz Silver

Expert Contributor Isabelle Ramdoo | Deputy Director of Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF)

View From the Top Sergio Martínez Torres | Director of International Sales - LATAM of JPS

View From the Top Eder Lugo | Minerals Head at Siemens

Analysis Good Tailings No Longer Optional

View From the Top Ricardo Acevedo | Mining Director of REBASA

View From the Top Javier Téllez | Director General of Commercial at CyPlus Idesa

Roundtable How Has Mexico Advanced With the Implementation of Mining 4.0?

View From the Top José Tovar | Community Relations Coordinator of Alamos Gold

View From the Top Diego Torroella | Director of TAKRAF Mexico

100 Analysis Mining’s True Impact in Mexico

101 Expert Contributor Bradford Cooke | Founder & CEO of Endeavour Silver Corp

102 Content Links

GLOBAL MINING PRODUCTIVITY INDEX

The mining sector, characterized for years as highly traditional and slow to change, is undergoing a modernization process

Per annum -8.3%

100

-0.4%

called Mining 4.0 that is revolutionizing the industry. In Mexico,

-2.6%

the revolution is advancing, but gradually. “Mining 4.0 is about technology, efficiency and sustainability. It is about using your resources in the best possible way. Mexico has been progressing gradually. Mining 4.0 is the new trend, so we will see more and better implementation of it in the coming years,”

Jose Castro, Director of CLUMISIN, told MBN. In the last few decades, mining investments have focused 80

on growing technologically, with the most important advances having been made in the areas of safety, increasing productivity, caring for the environment and communities and using resources more efficiently. These advances are aligned

with the goal of becoming more sustainable while improving the public’s perception of the industry, according Gerencia de Riesgos y Seguros. Its modernization is also in line with mining’s critical role in the transition to a carbon neutral world. 2018

2017

2015

2016

2014

2012

2013

2011

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60 2004

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Mexico’s Path to Mining 4.0

According to the World Bank, clean energy will increase demand for minerals by nearly 500 percent by 2050. Mexico has modern mining that employs high technology to

Source: MineLens

optimize processes and establish good management, social and environmental practices. In addition, it operates in accordance with the highest standards of social and labor responsibility. In 2019, the investment destined to research and technological development of the companies affiliated to CAMIMEX, which represents 90 percent of mining’s value, was US$35.2 million. In 2020, it had almost doubled to US$62.9 million. Through new investments, the industry has improved its safety conditions, with the sector’s accident rate falling 24 percent

CAMIMEX MEMBERS’ INVESTMENT IN TECHNOLOGICAL R&D

compared to 2018. The challenges posed by COVID-19 further highlighted the need for greater integration of technology into operations and led to the evolution of the entire sector as the

Year

Amount

2019

US$35.2 million

artificial intelligence and analytics.

2020

US$62.9 million

Although Mexico’s progress to Mining 4.0 has been slower

pandemic accelerated the adoption of digital technologies,

compared to other countries, experts believe the country is on the right path. “I believe that the progression had been

Source: CAMIMEX

very slow but in the last three years, the industry has picked up the pace by starting to do things differently. The industry is beginning to look at connectivity, productivity, precision, QA/QC and financial savings as crucial elements of their operations. I believe that this will continue to be explored for many years,” says Diana Catarino, Manager for Mexico and Central America at IMDEX. Catarino adds that around 35 percent of the industry is already in the smart mining wave, which is mainly due to the adoption of technologies from other countries because the Mexican market wants to see results and tends to look for solutions that have already been proven to work. “Mining companies cannot Read the complete article More about this topic

afford to install a piece of equipment that has not been proven to give good results,” Jorge Luis Cristerna Medina, Operations Manager at Multiled, told MBN.

Conference

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Highlights

Digitalization Driving the Mine of the Future Arturo Vaca Energy Director at Peñoles

Mónica Samudio Country Managing Director of Circutor

Sergio Campana Latin America Mining Industry Manager at Rockwell Automation

ines have a great deal to gain from digitalizing their operations, experts say, citing safer, more sustainable and efficient operations. This is a clear-cut issue for technology companies but their challenge is in influencing

and transforming what is seen as a traditional industry. “Digitalization represents an amazing opportunity for mining companies, equipment manufacturers and technology experts,” says Arturo Vaca, Energy Director of Peñoles, a global Top 2 producer of refined silver and a market leader in gold, lead, refined zinc and sodium sulfate production. “Nevertheless, we really should see technology as a means of improvement and not as an end goal in itself.” A fully safe mine without accidents, no harmful emissions, fully recycled water use without discharges, a perfect metallurgic recovery rate and fully optimized productivity — these goals are no longer unattainable ideals for mining operators; technology can help them get there. “The ideal mine of the future is safe, simple, smart, circular in its functioning and it is sustainable,” says Vaca. The key to getting there is digitalization. Although the benefits are clear, experts often consider the mining industry to be somewhat conservative when it comes to digitalization, hindering its adoption. “The nature of the industry makes it harder to adapt to the latest technologies. Mining is a heavy industry and a traditional one,” says Eder Lugo, Minerals Head Mexico of global technology giant Siemens. Sergio Campana, Latin America Mining Industry Manager of Rockwell Automation, a technology company that received a record number of orders valued at US$2 billion from mining companies in 2020, agrees with that notion although he stresses that not every mining company is necessarily the same. “All mining companies have different levels of technology adoption. Most of the mining companies in Mexico have started this transition,” he says. Campana believes that companies should look at development as a broader collaborative process. “Many people talk about partnerships but miners are somewhat unwilling to commit fully to one technology provider. However, providers such as

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ourselves should strive to bring in outside players if this adds value,” he says. Processes, people and technology, all play an important role.

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from the

Q: What is the significance of adding the Zimapan project to the company’s portfolio? A: Zimapan has great potential. The mine is located in a 500-year-old historic mining district, so geologically it is an excellent opportunity. In addition, Zimapan’s production can reach 3,200tpd; we are producing 2,600tpd and we hope to increase that organically. The mine is very important because in addition to the opportunities, it is aligned with our plans to grow the company. Q: How is the company progressing with its goal of recovering the mine’s historical production levels? A: I worked at the mine as an independent for 10 years. We saw the potential of the mine during that time but we did not invest until it became a Santacruz asset. We are aiming to return to historical production levels, for which we are exploring and developing the project and preparing new plans. Its maximum production is expected to be 75,000 tons. We already have the financial resources to achieve this goal. We believe that by 2H21 we will be making great strides. Q: How is the company considered a leading example of responsible mining?

Carlos Silva

A: We are working with the IRMA standard. We are considered the second company in the world to implement the standard and the first to publish the results. Our results were collected with total transparency and, in fact, IRMA left us tasks to improve and

CEO of Santacruz Silver

obtain a better rating. Likewise, we continue working with the communities through a scheme that is being adapted very well, especially in Zimapan. Q: What are the company’s priorities regarding to safety,

Zimapan Acquisition Establishes a New Era for Santacruz Silver

especially after the recent accident at the Rosario mine? A: Mining is a high-risk industry and as a result, we invest heavily in ventilation, mechanics, infrastructure and equipment to protect our people. We do not use the word safety. Instead, we say prevention because that is where we are focused the most. We have a prevention and health system, which we are constantly strengthening. The recent accident happened in a fill phase when we changed the operating system to make it safer. However, water had weakened the rock. After the accident, I spoke with the boy’s father. We always want families to feel supported. Every year, a mass is held inside the mine on the day workers have died so that we do not forget them and to learn from these accidents. In addition, we grant scholarships to children who have lost a parent. We provide them with information if they want to dedicate themselves to mining and guide them throughout the process. Q: What progress has Mexico made toward Mining 4.0 and what is needed for it be fully implemented?

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A: Mexico is ready for Mining 4.0 and is close to fully implementing it. However, it lacks support. The sector constantly faces new challenges, which prevent it from making progress in this regard. The government needs to trust us. If the government believed in us, we could then achieve our goals more easily and rapidly.

ew technologies are introducing sweeping changes to the mining landscape as they redesign the work environments and organization of the workplace, altogether. Although these changes will impact both men and women in different

ways, it is tempting to assume that new ways of working will automatically improve the gender balance in the large-scale

mining sector. But will that really be the case? To better understand this issue, it is necessary to look at how new technologies will affect women’s participation in the mining workforce. New working conditions will reshuffle the established gender pattern in the workplace, removing certain physical and technical barriers for women. And new technologies will improve occupational health and safety conditions. Furthermore, new technologies are moving workers away from the rock face. This improves access to jobs for women who are banned from working underground in some

Production & Optimization | 89

countries.

New Tech and Mining’s Future: Will Prospects Improve for Women? Isabelle Ramdoo Deputy Director of Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF)

Despite the positives, there are, potential drawbacks, which may in fact further entrench inequality. First, there is a major issue stemming from the digital gender divide. New mining jobs will require new skills that mostly rely on digital literacy and internet access. But according to a worldwide study from Equals Global Partnerships, 200 million fewer women than men own a mobile phone, 250 million fewer women than men use the internet, and only 6 percent of women develop apps. This divide is even greater in developing and less-developed countries. Research by Women’s Rights Online shows that across urban poor areas in 10 cities, women are 50 percent less likely than men to be online, and 30-50 percent less likely than men in the same communities to use the internet for economic and political empowerment. This raises an important question: Are women sufficiently equipped to capitalize on opportunities arising from new technologies? If we want the mining sector to evolve and provide more opportunities for women, it is important for policymakers to prepare for these changing workplace dynamics. However, prior to taking bold policy steps, there is a critical factor to be addressed: getting the numbers right about women in mining. There is a glaring lack of granular and gender-disaggregated employment data for the mining sector. Without first knowing where we stand, we can’t anticipate the future and prepare women to manage job transitions and seize new opportunities. As such, the Intergovernmental Forum on Mining (IGF) is launching a new project to close this data gap, in partnership with International Labor Organization (ILO), International Women in Mining (IWiM) and Environmental Governance Program of UNDP and SEPA. This project will unfold in three phases, starting now, with developing a baseline of detailed data about the level of employment, occupation types, skill levels, and educational attainment in large-scale mining, segregated for men and women. The second phase will investigate future job profiles and skill requirements. Finally,

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we will look at gendered impacts of new technologies on mining supply chains. The objective is to provide evidence to allow better policy design to address systemic and contextual challenges women are likely to face, with the fourth industrial revolution in the large-scale mining sector.

VIEW TOP Production & Optimization | 90

from the

Q: How have JPS’ interoperability hardware and software solutions transformed customers’ mining operations? A: In industries such as mining, excellent and reliable communication is the main concern, regardless of the technology used. JPS can interconnect everything related to voice communication systems, whether it is radio, telephone or any other device. Our solutions are for mining companies that need to communicate between one location and another; for example, from a headquarters to remote areas. We help companies improve their management, security, protection, production and everything else related to having a high quality and reliable communication system. Q: What role does JPS technology play in improving safety in mining? A: Miners experience many problems related to communications, safety among them because mining companies often carry out risky operations. Many years ago, we had a case where the mine communicated through radios but some workers used cellphones. At some point, the mine had an explosion hazard and only those people with a radio knew about the danger. Subsequently, the mine management agreed to improve the communication system to ensure that everyone was aware of the mine’s situation at all times. We offered a pager solution that

Sergio Martínez Torres

was implemented in cellphones to warn people of a present risk. We believe that communication is a safety pillar and companies must ensure that their systems work for everyone.

Director of International Sales - LATAM of JPS

In addition, JPS develops noise-free communications, which is very difficult to achieve in industries such as mining. We also offer the Global Positioning System (GPS), which is implemented in cellphones and allows the company to know where its staff are anywhere in the world.

Reliable, Long-Range Communication Improves Safety, Productivity

Q: How are you adapting your solutions to mining operation? A: We adapt our solutions to the resources of mining companies, regardless of their size, equipment, budget and location. We had a client in Chile that could communicate from its headquarters in Santiago to its mining operations in other parts of the country. We are looking to create a digital tunnel that will provide communication through the internet or any other domain. We adapt our solutions to the infrastructure of the company, avoiding extra costs. We use existing resources and combine them to ensure more efficient, proactive and safer operations. Q: How is JPS’ RoIP helping miners to improve communications systems, especially in remote locations? A: RoIP stands for Radio Over Internet Protocol. This solution is perfect for establishing communication between very distant places. For example, if a miner’s headquarters is in Toronto and their operations are in Nicaragua, they can have very clear and reliable communication from both sides. Our product takes the voice from the radio and connects it to another radio. The

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information then flows through the internet to the other end. This solution allows the customer to connect to other radios in the cloud and have a voice communication that can be heard clearly, even from other countries. Also, our RoIP solution can be used in many places, not just in one. It is a multipoint solution.

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from the

Q: Where is the Mexican mining industry located on the digital transformation curve? A: The Mexican mining industry is ready to take the next steps toward a digital transition. I believe this transition stems not from a global trend but from a local necessity within the industry. Mining companies are aware of the importance of automation and how it benefits operations, in addition to increasing the industry’s competitiveness and effectiveness on a global scale. There are three major technological opportunities in the Mexican mining industry. The first is the importance of automation implementation. The second is human capital, an element where Mexico has remained competitive in comparison to other mining countries. The third is the synergy that exists between the mining industry and all active stakeholders. Q: What technology trends are destined to reshape the Mexican mining industry? A: Mining is at the forefront of many industry trends, such as renewable energy. There is a common slogan that says, “Everything comes from mining.” Minerals are the base of many things that we interact with on a daily basis. In addition,

Eder Lugo

the pandemic has pushed technologies even further; in particular, the use of remote operations. Having an online platform capable of such a feat, as well as the necessary infrastructure, has allowed companies to continue their

Minerals Head at Siemens

operations remotely. Another trend in the industry is the well-known “digital twins.” A digital twin allows users to mathematically model anything, whether it physically exists or not. It gives us the tools to

Planning for the Mine of the Future

measure models and their performance, with the intent of uncovering their optimal performance. It also allows for improvements in existing operations or the optimal design of a new one. The third trend is artificial intelligence. Today, in an industry that generates thousands and thousands of data points, having access to AI algorithms is a no brainer. It allows for easy data management, which allows companies to improve their operational efficiency. Q: How is Siemens working to help mining companies successfully transition toward a fully digitalized operation? A: There is still much to do during this era of digital transformation. We are at the vanguard of digitalization, which represents a huge area of opportunity for us. Siemen’s first projects that serve as world-class references date back to over a decade ago. This demonstrates, that as a company, we have prepared ourselves over time to have the digitalization portfolio we have today. The portfolio contains our electrification solutions, coupled with automation solutions, which are then enhanced further with our digitalization strategies. This has ultimately matured our mining solutions and has helped us widen the range of our portfolio in this industry.

By applying our solutions, we successfully reduce our client’s operational costs. For instance, our client Vale has achieved over US$58 million in savings. In addition, we have automated systems already installed in a mining platform in Norway where there has been a dramatic reduction in staff transportation. By only having selected staff members at the operation itself, production costs have been dramatically reduced. Q: What is your vision for the mine of the future and what role does Siemens want to play in its development? A: Ten years ago, at our Germany headquarters, they devised a scheme describing the mine of the future. I can tell you there will come a point where there is nothing left to mine on the surface, prompting mines to reach even further below. But even those are destined to run out and so we will aim toward ocean mining, which already has specific technologies that are being developed. Nevertheless, even those, are destined to end as well. The mine of the future, which today may seem unlikely, will no longer be on our planet. There will be a time where space mining will be as common as an open leach mine. We need to be conscious of where we are headed as an industry. We have to align our strategy as a supplying company to design and develop the technologies that will be needed in the industry. We will have to come up with solutions that will allow companies to reach even deeper, while complying with mining regulations and the environmental measures that have become a staple of the industry, all while implementing our AI data management that will allow companies to improve their decision-making. Q: How will Siemens’ holistic architecture concept shape the future of mining? A: Our holistic concept approach encompasses both our electric generation and distribution portfolio, as well as our digitalization portfolio, which provides a complete solution for energy generation and transmission of an operation. We have under our belt, projects with clients that have been built in their entirety under this concept. This has allowed them to have a complete digitalized operation, meaning that from the very beginning of energy generation to all the data management required in an operation, data is digitalized and available for decision-making.

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Production & Optimization | 93

Good Tailings No Longer Optional 446

Tailings Dams in Mexico

Multiple tailings storage facility (TSF) failures have increased awareness of the importance of mine waste management. As a result, many mining companies are improving their game by considering key areas for managing tailings throughout the life cycle of a mine and its subsequent closure. However, there is still work to be done and a great deal of room for improvement. Tailings are high-risk assets that are a by-product of the mineral recovery process, which are generally created when ore is crushed and ground in the milling processes, generating a liquid slurry that contains metal or mineral particles and water. The tailings are pumped to storage facilities that are typically built with earth dams. As the residue gradually dries and compacts, vegetation can be planted to recover the environment. To discharge tailings water to the drainage system or reuse it, it must first be treated to eliminate contamination and potential risks to the environment and local communities. The management of tailings is a long-term responsibility and must be carried out in accordance with regulatory regimes to make it safe and effective throughout the life of an operation and after

Mexico has reported

tailings accidents in the last

33 years

its closure, according to the International Council on Mining and Metals (ICMM). Mining companies must study their residues and implement the best short-term and long-term measures to ensure their physical and chemical stability, as well as proper future land use. Without proper management, tailings can have extreme impacts, as pollution and dust emissions can be toxic. There have been cases where tailings storage facilities fail, causing materials to flood, affecting the environment and sometimes resulting in death. The Mexico: Mining Laws and Regulations 2021, NOM-141SEMARNAT-2003 establishes the specifications and criteria for tailings, including on-site preparation, construction, operation and post-operation of tailings dams. In addition, mining companies must obtain permits, submit a risk assessment, register a Hazardous Waste Management Plan, have environmental insurance and notify the authorities in the event of an accident. The need to implement global standards and technology to improve tailings management has long been a goal for many mining companies, together with the implementation of best practices and technologies to achieve it. Couer Mining is one example. During Mexico Mining Forum 2021, Mitchell Krebs, CEO of Coeur Mining, said the company pursues high standards and that Coeur’s operational risk reduction plan on tailings dams follows authorized international guidelines, effective filtration and hydraulic control systems. Furthermore, Coeur’s tailings of Palmarejo in Mexico are classified as non-potentially acid-generating as any water discharged to the environment passes through a secondary inverse osmosis treatment. As tailings and their proper management have spread among operators, companies have developed solutions that are helping mining mitigate the risks and impact of tailings. These solutions are expected to grow and be further promoted as green trends permeate mining and other sectors. Geosyntethics offers

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geosynthetic clay liners (GCLs), including liners for tailings dams and heap leach pads. GCLs are a sustainable option as they reduce a project’s carbon footprint by reducing fuel consumption.

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from the

Q: Why is lime an important chemical in the mining industry? A: In mining, lime fulfills four main functions: 1) it levels out the PH of the mineral to take advantage of the cyanide and prevent it from volatilizing; 2) it granulates the material to allow a better penetration of the cyanide and, therefore, releases more gold; 3) for the treatment of mining waste, it neutralizes the waste for its final confinement; and 4) as a soil stabilizer. For the latter use, we are working to encourage its greater implementation in the mining sector since it is a unique opportunity to have firmer soils faster and at a lower cost. This solution benefits all mines but especially those that are in remote locations and with little infrastructure. Q: What characteristics make REBASA lime an attractive product for the Mexican mining market? A: We supply not only for mining but also for the steel industry, which is stricter in terms of quality. This forces us to implement higher quality standards. Likewise, we are certified in ISO9001-2015, which helps us keep our processes up to date and to continuously improve them. Finally, REBASA is part of the Monclova Industrial Group, which has more than a dozen companies in its portfolio. This is an added value for our clients, since they have access to greater support and more innovation.

Ricardo Acevedo

Q: How is REBASA generating a positive social and environmental impact in the industry? A: Lime helps with the treatment of waste from mining

Mining Director of REBASA

companies. Today, mines have the responsibility and obligation to treat their waste before confining it to avoid polluting soils and aquifer lakes. Lime is a chemical substance that helps neutralize pollutants that enter the soil. It also helps fertilize and treat soil, providing rich minerals such as magnesium.

Lime: New and Efficient Low-Cost Soil Stabilizer

Q: What specific actions and programs make REBASA a responsible company? A: We have a specialized technical management area that guarantees the safe and sustainable exploitation of our quarries, in addition to complying with the corresponding regulations. We also have reforestation and relocation programs for native species to conserve the ecosystem. We also have a foundation that is more than 50 years old, with which we channel our efforts and resources to take care of the environment and contribute to the development of communities. Our company also promotes gender inclusion. Our goal is to hire more women for all of our operations because we understand the positive impact they can generate. Q: How was lime demand affected by the COVID-19 pandemic and what is your outlook for the rest of the year? A: The demand for lime was affected when the pandemic began, especially in April-May when we stopped operations. The

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steel and construction sectors are our biggest customers and they were greatly affected by the pandemic, in turn impacting lime demand. For the second half of the year, our outlook is positive, with greater recovery and growth than last year. We are preparing for high demand.

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from the

Q: What made the company want to become a cyanide producer in Mexico? A: Mining is a strategic activity for the development of the country; Mexico has been a mining country for more than five centuries and continues to grow. The technological advances during the 20th century allowed to explore and intensify the mapping and identification of mineral deposits; mining also plays and important role in the economy by contributing 2.4 percent to the Mexican GDP. This for sure increased interest among investors. The geological potential is huge; 70 percent of the territory is susceptible to mining projects and as of today only 11 percent have been granted for concessions. Today, Mexico has 991 mining projects in which 665 are in the exploration phase, 45 in current development and 107 in production, not to mention the 33 world- class mineral deposits placing Mexico as the largest silver producer in the world and the 11th largest producer of gold. Having said that, sodium cyanide is an important chemical reagent most used for the extraction process of gold and silver, which allows the cyanide market in Mexico to become one of the largest in the world. In the past, sodium cyanide was supplied mainly by imports coming from the US and Europe,

Federico Téllez

leaving the industry overexposed to any risk within the supply chain. This fact, and our expertise for cyanide production and technology development, led to the decision to invest in a production plant in Mexico. Having a local source of cyanide

Director General of Commercial at CyPlus Idesa

supports the mining industry by ensuring the supply and continuity of precious metal production. Q: Why did the company choose to locate its plant in Veracruz?

Demand Spurs Local Cyanide Production

A: The availability of raw materials is a key decision when building a production site. In Coatzacoalcos, our raw materials were available in a distance of 30 km from the facility, this for sure facilitates the task to transport our inputs and ensures availability as well. The second reason was, an already established petrochemical industry, Coatzacoalcos hosts one of the biggest Petrochemical Industries in Mexico and qualified personnel to operate. Q: How do you expect demand for cyanide to develop in the short term? A: The mining industry suffered from the effects of COVID-19 pandemic and the shutdown of operations last year diminished the growth potential. After more than five years of highest growth, the market is now consolidating to more moderate growth rates. For the upcoming years, we are expecting that mines will recover their production rates. I can say that

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based on the good expectations for gold and silver price development together with the geological potential of our territory, the Mexican market will continue to grow, additionally supported by the declining quality of gold and silver ores with corresponding increased demand of leaching reagents.

Production & Optimization | 96

How Has Mexico Advanced With the Implementation of Mining 4.0?

Mexico is embracing Mining 4.0 and according to experts, eventually all companies will join the trend and become smarter, safer and more efficient. However, Mexico has made slower progress in this regard compared to other countries. The delay is mainly due to the fact that mining is a highly traditional sector and other challenges that do not allow it to grow at full pace. Mexico Mining Review asked experts about the country’s progress toward digitization and what is missing to fully implement it.

Mexico is ready for Mining 4.0 and is close to fully implementing it. However, it lacks support. The sector constantly faces new challenges, which prevent it from making progress in this regard. Recently in Hidalgo, there was an ecological and urban reordering, which prioritized agriculture over mining. This is a step backward because the state no longer lives off this sector. Another example is when the Mining Fund was eliminated following claims that the money had been stolen, which is not true. I was a member of the committee and observed how it was used for the benefit of communities. The government needs to trust us. If the government believed in us, we could then achieve

Carlos Silva

our goals more easily and rapidly.

CEO of Santacruz Silver

I believe that the progression had been very slow for quite a few years. However, in the last three years, the industry has picked up the pace by starting to do things differently. I believe that 35 percent of the Mexican mining industry is already part of the smart mining wave, mainly due to the adoption of other countries’ technologies. Now, the industry is beginning to look at connectivity, productivity, precision, QA/QC and financial savings as crucial elements of their operations. I believe that this will continue to be explored for many years.

Diana Catarino Manager for Mexico and Central America at IMDEX

For Mining 4.0 to happen, companies will need to have a great technical support service team. Although the goal is to have most processes automatized and connected, it will still require supervision.

The Mexican market wants to see results and tends to look for solutions that have already been proven to work. Mining companies cannot afford to install a piece of equipment that has not been proven to give good results. Stakeholders are looking to optimize everything and yield better results. That is why our job is so important. We want to be an ally. We have introduced new products to the market, but this involves having a closer relationship with the companies. These relationships allow us to test new equipment in the field before actually installing it as part of the operation.

Jorge Luis Cristerna Operations Manager at Multiled

VIEW TOP Production & Optimization | 97

from the

Q: What ESG standards are helping you approach communities? A: In 2019, the World Gold Council published its Principles for Responsible Gold Mining. Based on those, we carried out a gap analysis to see what we could improve. We have promoted and implemented ICMM standards and the UN’s Sustainable Development Goals to reduce inequality among communities. We are also developing our own ESG standards to improve our environmental and social approach. Q: What employment opportunities does Alamos provide to host communities? A: We want local hiring to become one of our global policies. From the moment we start planning the project, we need to consider what kind of people we need to identify people’s capabilities and develop strategies to empower them further. Likewise, we seek to make gender equality a company policy. One of the main challenges for women is when they decide to be mothers because it generates a different dynamic. As a result, we seek to create conditions according to their needs so that there is compatibility. Q: What does the company want to improve in its communities in 2021? A: We want to promote our project in Matarachi. We started to

José Tovar

implement it in 2020 but with the pandemic, we got delayed. This year we want to resume it to develop an urgent basic service. One of our projects is to install a water supply network that meets the WHO standard of 100L per inhabitant per day. In addition, we

Community Relations Coordinator of Alamos Gold

are working to ensure its good management. On the health side, we are creating several alliances to improve services. Recently, we introduced a Pap smear campaign to the community. It was a challenge due to taboos and misinformation; however, this action can significantly prevent illness and death.

Social Performance Generates Positive Impact on Communities

Q: How is the company working to reduce the negative impacts of the Esperanza Project on local communities? A: Our social performance approach enables us to identify potential impacts and work with community members to address them. We hold focus groups to inform them about the project but at the same time we collect their comments to improve our communication with them. So far, nearby communities have expressed their acceptance. The challenge remains with civil society organizations and their goal of maintaining green communities. We want to explain to them that there is compatibility between a green future and mining. Q: How can the industry become more responsible? A: Mining is everyone´s responsibility. These include universities that develop our professionals, CEOs, stock exchanges, international organizations and consumers, and not just those who work in the sector. We all have to demand best practices and responsible mining at all stages. Mexico is undergoing a major transformation as ESG practices are increasingly being

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implemented. I believe it is on the right track. The great challenge is that our actions and measures must be compatible with the new challenges of the industry, as well as with the type of industry that we want to have in the future. Only then will we focus better and achieve real change.

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from the

Q: How have TAKRAF’s technologies helped mining companies adopt new standards? A: We have seen over the years that as foreign companies invest in Mexico, they also introduce global standards. They introduce what they have learned in different countries in regard to environmental regulations and reforms, which tend to be much stricter than what we have in Mexico. It has been interesting to see how the Mexican industry has evolved over the years with the arrival of each new global standard. We have seen the mining industry adopt automation technologies with the goal of providing safer and more reliable solutions. Our products have already adopted many of these technological solutions, such as improved water management and techniques to improve efficiencies. Our equipment has evolved toward those goals and we are in the process of implementing them in Mexico. Q: What does TAKRAF’s Zero Harm approach represent and how can mining companies be a part of that initiative? A: Zero Harm is linked to the recovery of water and having the ability to use it in the rest of the process, aiming to minimize the environmental impact. In addition, it includes and emphasizes safety. A reliable operation is always

Diego Torroella

safer, meaning that the less physical interaction between a human and a machine, the better. That is what TAKRAF’s technologies wants to achieve. With all the data gathering that we do, we are able to determine what might fail in

Director of TAKRAF Mexico

the future. From there, we structure a plan to tackle those challenges and prevent any setbacks or any accidents that could potentially harm equipment and operators. Q: How do TAKRAF’s DST and DELKOR solutions

Conceptual Planning Leads to Success

help mining companies reduce their water consumption and improve its management? A: TAKRAF has been around for many years and in 2014 we integrated DELKOR, a company that has a lot of experience in liquid/solid separation and mining processes. By combining our efforts, we are able to view Dry Stack Tailings (DST) as a complete system, rather than separate pieces of equipment. This has allowed us to work with our clients, starting with the planning phase where we determine the most reasonable and effective plans. In addition, we join forces with geotechnical companies to identify the best location to place the tailings. Our solutions have a range of thickeners, such as high rate, high density, paste and conventional thickeners. In addition, we offer specific filtration capabilities in the form of horizontal belt filters and filter presses. We also provide the complete material handling solution from conveyor belts to mobile trippers, mobile stacking bridges, as well as spreaders, meaning that we have all the equipment needed for all tailing processes. Q: How is TAKRAF helping mining companies achieve their ESG goals? A: It takes time to develop these types of projects but it is worth it in the end if done properly. In the case of a new mine,

we visit and explore the surrounding areas. We also talk to the operators from the engineering, operations and ESG teams. We want to get to know what challenges the mine is facing. We have dealt with cases where clients want to transition to automation, which is not always an engineering task. Instead of making the compromises required to change an operation and moving personnel to different areas, we provide the complete solution where personnel work in offices monitoring the equipment. In the rare case of a fault, an operator would be introduced to fix it. So, we are also contributing to the training of local mining workers since they need to know how to operate their equipment. Q: What will be the global standards of Mining 4.0 that will disrupt the industry? A: I believe that easier and more affordable maintenance will be a global standard. As a result, mining companies will be able to speed up production while reducing downtime and improving operator safety. Our equipment may seem robust and big when you look at it but it is filled with a variety of sensors and instruments. With these, you can monitor the equipment and if there is an issue, you can analyze and fix it before it becomes a bigger problem. Q: Why should mining companies speed up their adoption of Mining 4.0 technologies and what are the critical success factors in this process? A: The belief that mining companies are old fashioned and that they are hesitant to try new technologies is outdated. Mining is the gateway to a carbon neutral future. As a result, the industry is expected to evolve. Companies that do not adopt newer standards into their processes will most likely disappear. There are big challenges ahead with the rise in energy costs and pollution. And in an industry that relies heavily on high capital investment, companies will have to look at newer technologies to improve reliability and sustainability. Q: What are TAKRAF’s plans and objectives toward the end of the year? A: We continue to develop newer technologies, such as our new BQR flotation cells. We definitely want to be a flagship technology company. We want the industry to think of us when considering water management and water recovery and we continue to work towards that goal.

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DIRECT JOB GENERATION (thousand) Mining has been integral to Mexico’s growth for centuries. It has

400

300

381

379

371

354

350

379

also been linked to irresponsible practices and negative impacts

344

Production & Optimization | 100

Mining’s True Impact in Mexico on the environment and communities, resulting in a public image that is far from flattering. The reality, according to relevant data, is that mining has been and will continue to be fundamental for the country’s sustainable development.

250

“It is of the utmost importance to highlight the true nature of

200

the modern and professional mining industry that operates in

150

communities, regions and states where it operates. It is an industry

Mexico. Mining is committed to the economic development of the that ultimately boosts the quality of life of the inhabitants of our

100

host communities,” Fernando Alanís, President of CAMIMEX, told MBN. The sector is present in 696 communities, 212 municipalities

and 24 states in Mexico. It contributes 8.3 percent of industrial GDP and 2.5 percent of national GDP, making it a key industry in terms

0 2015

2016

2017

2018

2019

Jan 2020

of employment generation and social development. “The mining industry creates high quality jobs, trains people with

Source: CAMIMEX and Federal Government

career skills and generates economic activity that has a sevenfold multiplier effect in society due to the supply chain. Mining is one of very few industries with worksites almost exclusively located

HUMAN DEVELOPMENT AND SOCIAL NEGLECT LEVELS IN MINING MUNICIPALITIES (percentage of municipalities)

CEO of Endeavour Silver. In 2019, the mining industry created 379,000 direct jobs and 2.2 million indirect jobs. Additionally, data

in poor, rural parts of Mexico,” said Bradford Cooke, Founder and

supports the assertion that mining is one of the best paid activities in the country. In December 2019, the average daily salary in

Mexico was MX$378.13 (US$19.01), while in mining it was MX$526.7

(US$26.50), which is 39 percent higher. Mining supports the

development of other economic activities, such as construction,

transportation and trade. Mining imports and exports represent

23 20

474,000 tons of materials per year and as a result, if the mining

sector is promoted, other sectors will also grow, Alanis told MBN.

25 22 14

7 6

is to generate sustainable development and benefits where it

5 3 High

diminish the quality of life of communities and violate their rights. However, one of the objectives of the Mexican mining sector

Very high

Among the accusations against the industry from environmental leaders, politicians and activists is that mining and its projects

Medium

Low

operates, in addition to seeking to generate decent, safe and Very low

— Mining human development index — National human development index — Mining municipalities social neglet index — National social neglect index Source: CAMIMEX

quality jobs. According to CAMIMEX’s 2020 Sustainability Report, in 2019, affiliated companies spent US$87.94 million on social development programs, benefiting 1.5 million people. Moreover, 36 municipalities that represent 75 percent of the mining production value has a higher Human Development Index (HDI) and a lower Social Lag Index (IRS) than the national averages. The mining industry also has been accused of polluting, neglecting and affecting the quality of life of nearby communities. López Obrador recently said that mining is responsible for altering air quality, pollution and destroying or seriously affecting the ecosystem. Yet, in 2019, the sector invested US$457.7 million in sustainability initiatives and US$375.2 million in environmental programs. “What is missing is to communicate this modern vision that we have of a responsible mining industry that actively and

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constantly promotes the well-being of the environment, workers and their families and neighboring communities,” Juan E. PizarroSuárez, Managing Partner at Pizarro-Suárez & Bandala, told MBN.

he mining industry often gets a bad rap. Certain politicians, environmentalists and media tend to portray mining as an uncaring or “dirty” industry. But this perception is not only outdated, it is misleading. The mining sector actually leads the way for other

industries to follow in embracing corporate social integrity. Since inception in 2003, we at Endeavour Silver have strived to create social, environmental and economic benefits for all our stakeholders. Our company has released its 2020 sustainability report, Endeavour’s eighth consecutive year of sustainability reporting under the Global Reporting Initiative. This year, we also linked our ESG disclosures to the Sustainability Accounting Standards Board. We all know that when you feel good about yourself, your colleagues and company, you feel less stress and perform better. Last year, Endeavour launched our “ICARE” values program, so

Production & Optimization | 101

that all employees can identify personally with our corporate

Mining Leads the Way in Corporate Social Integrity Bradford Cooke Founder & CEO of Endeavour Silver Corp

values. ICARE stands for Integrity, Care, Attitude, Reliability and Excellence. The feedback from our people to this program was very positive. Mining is a risky business. The safety and well-being of our employees and contractors are our top priority at Endeavour. In 2020, we delivered a 25 percent reduction in our Reportable Injury Rate, thanks largely to the buy-in of our employees to our new “Te Cuido” safety culture program. Te Cuido is naturally related to ICARE so we plan to merge these two programs in the future. Mining is truly Mexican. Even though we are a company based in Canada, Endeavour’s workforce remained 99 percent Mexican in 2020 but we became more diversified: 1,954 employees and contractors worked for the company last year, 13 percent of whom were women, up from 11 percent in 2019. Our employee absentee rate was 1.8 percent, down from 2.6 percent the previous year. Mining is a good citizen. Not including our employees’ time, last year we invested over US$200,000 in community initiatives. Mothers, in particular, were very appreciative of our donation of 534 smart tablets to local students to support online learning. Mining respects the environment. Last year, we invested US$1.5 million in environmental protection, including the planting of 44,000 trees through our reforestation initiative and we reduced our greenhouse gas emissions by 34 percent. Last but not least, the mining industry creates high quality jobs, trains people with career skills, and generates economic activity that has a 7x multiplier effect in society due to the supply chain. We also pay some of the highest taxes (52 percent total tax burden) of any industry worldwide. The mining industry is under appreciated by the general public and it is our responsibility to tell people about all the good

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things that we do. Mining is a core activity that supports modern civilization. We do what we have to do to build our business in a sustainable way for all our stakeholders. That is why the mining sector leads the way for other industries to follow. If you can’t grow it, you have to mine it.

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Sustainability, Efficiency, Net Zero: Key Requirements in Mining José González CEO of Blacktogreen Consulting

Can New Mining Technologies Strengthen Community Resilience? Isabelle Ramdoo Deputy Director of Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF)

Trust Precedes New Tech Adoption Among Miners Ana Muñoz Commercial Director of Rama Mantenimiento

Transforming the Mining Industry With Technology Marc Boudreau | Tyler Samson CEO of INOVINTA | President of SHYFTinc

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The Road to a Greener Mexican Mining Industry 05/20/2021

Acronyms AI

Artificial Intelligence

ICMM

AIMMGM

International Council on Mining and Metals

Association of Mining Engineers, Metallurgists and Geologists of Mexico, Zacatecas District

INEGI

National Institute of Statistic and Geography

AISC

American Institute of Steel Construction

INPI

National Institute of Indigenous Peoples

AMIA

Mexican Academy of Environmental Impact

IPO

Initial Public Offering

CAMIMEX

MBN

Mexico Business News

Mexican Mining Chamber

CANCHAM

MMF21

Mexico Mining Forum 2021

Canadian Chamber of Commerce in Mexico

MORENA

Movimiento Regeneración Nacional

CAPEX

Capital Expenditure

NGOs

Non Governmental Organizations

CIMMGM

Colegio de Ingenieros de Minas, Metalurgistas y Geólogos de México

NYSE

The New York Stock Exchange

CO2

PEA

Preliminary Economic Assessment

Carbon Dioxide

CSR

R&D

Research and Development

Corporate Social Responsibility

CTA

ROI

Return On Investment

Consultoría y Tecnología Ambiental

DTS

Dry Stack Tailings

SEMARNAT

Ministry of Environment and Natural Resources

ESG

Environment, Social and Governance

SLS

Solid to Liquid System

EVs

Electric Vehicles

SME

Society for Mining, Metallurgy & Exploration

FDI

Foreign Direct Investment

TMTC

FMS

TAKRAF Mining Technology Center (TMTC)

Fleet Management System

GDP

TSX

TSX Venture Exchange

Gross Domestic Product

HSE

Health, Safety and Environment

UNEP

United Nations Environment Program

ICMC

the International Cyanide Management Code

USMCA

United States Mexico Canada Agreement

ICME

International Council on Metals and the Environment

WIM

Women in Mining

Advertising Index Cyplus Idesa 1

Barksdale Resources 55

TorexGold 5

Infinitum Copper 61

Emerson 15

Osisko 65

Promimex 22

Sandvick 73

Accendo Banco 27

Epiroc 79

Iberdrola 36

Sefar 84

Altaley 43

SKF 92

Sonoro Gold Corp 47

Takraf 99

Index Accendo Banco 30, 37, 39, 41, 44

JPS 85, 90

Alamos Gold 75, 77, 97

Keynote MAG Silver 72

Altaley Mining 28, 37, 44

L&H 48, 57

AUSENCO 71

MAG Silver 38, 72-73, 82

CAMIMEX 7, 8, 9, 11, 12, 16, 46, 49, 56, 67, 74, 75,

Ministry of Economy 6, 9, 10, 12, 23, 49, 56

86, 100, 103 Molina, Hanff & Pérez Howlett 35-36 CANCHAM 7, 103 MSA Safety 74 Candelaria Mining 28, 33, 41 O’Gorman & Hagerman 48, 62 Chihuahua Mining Cluster-CLUMIN 25 PRI 8, 29 CIMMGM 23, 103 ProDeMin 7, 48, 58, 59 Closing the Gap 9 PwC 56, 66, 70 CLUMIN 6, 13, 25, 66, 69, 82 REBASA 94 CLUMISIN 6, 14-15, 49, 86 Reggiana 81 Coast Capital 6, 18 Reyna Silver 59, 63 Coeur Mexicana 68 Riverside Resources 34, 50 CyPlus Idesa Robit 53 Defiance Silver 50, 63 RPMGlobal 78-79 Discovery Silver 28, 30, 40, 41 SEMARNAT 67, 69, 82, 93, 103 Empress Royalty 28, 37, 39, 44 Santa Cruz Silver 88 Endeavour Financial 37, 39, 44 Senate 6, 10, 25 Endeavour Silver 6, 7, 20, 21-22, 85, 100, 101 Siemens 85, 87, 91-92 Exploration Outlook 28, 34, 48, 50, 56 Silver Institute 28, 32 Golden Minerals 66, 76 Sonoro Gold 30, 45, 46, 60-61, 63, 68, 82 GoldFinx 42-43 Starcore 48, 51 Grupo México 45 TAKRAF 85, 98-99, 103 Guanajuato Silver 48, 50, 54, 55, 77 Torex Gold 6, 24 ICMM 29, 74, 93, 97, 103 UNEP 29, 103 IGF 20, 55, 85, 89, 102 VanEck 28, 31 IMDEX 48, 52, 77, 86, 96 Vizsla Silver 5 Infinitum Copper 6, 19, 20, 59, 61 WIM 11 JDS 64, 66, 80, 82

Photo Credits Cover Couer Mining

53 Robit PLC

Orla Mining

54 Guanajuato Silver Co. Ltd.

MMF Echo

57 L&H Industrial

10 Ministry of Economy

58 ProDeMin

59 ProDeMin, Reyna Silver, Infinitum Copper

WIM Mexico

12 Ministry of Economy

60 Sonoro Metals Corp

13 CLUMIN

62 O’Gorman & Hagerman

14 CLUMISIN

63 Sonoro Gold

18 Coast Capital

64 JDS

19 Infinitum Copper

68 MMF Echo

20 Infinitum Copper

69 CLUMIN

20 Endeavour Silver, IGF

70 PwC

21 Endeavour Silver

71 Ausenco Southwest

23 CIMMGM

72 MAG Silver

24 Torex Gold

75 Alamos Gold

25 Halyard Inc.

76 Golden Minerals Company

26 Strand Hanson

77 Alamos Gold, Osisko, IMDEX

30 MMF Echo

78 RPMGlobal

31 VanEck

80 JDS

32 The Silver Institute

81 Reggiana Riduttori

33 Candelaria Mining

82 JDS

34 Riverside Resources

83 Transtecno

35 Molina, Hanff & Pérez-Howlet

87 MMF Echo

39 Empress Royalty Corp.

88 Santacruz Silver

40 Discovery Silver

89 IGF

41 Candelaria Mining, Discovery Silver, Accendo Banco

90 JPS 91 Siemens

42 GoldFinX 94 REBASA 44 Altaley Mining Corporation 95 CyPlus Idesa 45 Brinks 96 Santacruz Silver, IMDEX, Multiled 46 Sonoro Gold 97 Alamos Gold 50 MMF Echo 98 TAKRAF Mexico 51 Starcore International Mines 101 Endeavour Silver Corp 52 IMDEX 102 Orica

Credits Journalist & Industry Analyst: Paloma Durán Journalist & Industry Analyst: Lorenzo Núñez Editor: José Escobedo Senior Editor: Mario Di Simine Managing Editor: Alejandro Salas Publication Coordinator: Fortuna Osorio Publication Coordinator: Mayra Gasca Graphic Designer: Tania Aguiñiga Graphic Designer: Marcela Muñoz Senior Graphic Designer: Mónica López Design Director: Marcos González Web Development: Omar Sánchez Collaborator: Cas Biekman Collaborator: Andrea Villar Collaborator: Miriam Bello Director General: Jeroen Posma

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Mexico Mining Review 2021/22

Articles inside

Introduction