Mexico’s miners planning big exploration year in 2022

Mexican mining companies are planning a big year of exploration spending in 2022 as they seek to grow reserves and advance projects in a strong metals price environment.

Ten of the country’s main gold and silver producers have outlined aggregate budgets of around US$377mn, according to industry data compiled by BNamericas.

The figure comprises Mexican investment where available.

Three of the 10 (Fresnillo, First Majestic Silver and Pan American Silver) did not give a full breakdown of spending by country, but their budgets are largely aimed at mines and projects in Mexico.

Mining companies that did not provide exploration budgets or breakdowns by country or asset include Southern Copper and Newmont.

TOP MEXICO EXPLORATION SPENDERS

Fresnillo. 2022 exploration budget: US$180mn

Mexico’s biggest gold and silver producer plans to invest US$180mn in exploration this year, up from the US$140mn it spent in 2021.

More than half (55%) will be spent on exploration at Fresnillo’s operating mines, with 19% earmarked for development and study stage projects, including Juanicipio, Orisyvo, Rodeo and Guanajuato, all of which are in Mexico.

The remaining 26% will be invested in earlier stage exploration assets in Mexico, Peru and Chile.

The aims of the 2022 exploration program include upgrading resources, advancing projects and drilling priority targets, Guillermo Gastélum, VP exploration, told the 2021 earnings call.

First Majestic Silver. 2022 exploration budget: US$45.2mn

First Majestic is planning a 41% increase in drilling in 2022, with more than half the total at Mexican assets.

The target is 320,200m, up from 227,845m drilled last year.

The figure includes 98,000m of infill, step-out and exploratory drilling at San Dimas and 68,100m at Santa Elena, where infill and near-mine drilling will test the Santa Elena Main, Alejandra del Bajo, América, Fénix and Ermitaño veins.

First Majestic also plans to drill about 19,000m at La Encantada, aimed at adding resources and testing targets.

About 135,100m of the 2022 total drilling will be at the Jerritt Canyon gold mine in the US.

Pan American Silver, 2022 exploration budget: US$42-46mn

Pan American’s exploration forecast is up slightly from the US$42mn originally outlined for 2021, and a significant portion will be invested in Mexico.

Around half of the 2022 total (US$22-24mn) has been earmarked for drilling at the La Colorada Skarn (LCS) discovery in Mexico, along with adjacent vein systems and exploring the Wetmore and Whitney projects in Canada.

The company plans 55,000m of infill and exploration drilling at LCS.

Near-mine brownfield exploration targeting reserve replacement is forecast at US$12-13mn, with US$8-9mn budgeted for regional, greenfield exploration in Peru, Mexico and Canada.

Torex Gold, 2022 exploration budget: US$39mn

Torex Gold is planning major exploration investment this year across its El Limón-Guajes (ELG) mine (in picture) and adjacent Media Luna project in Guerrero state.

“Exploration will … remain a key focus, with a total of US$39mn in exploration and drilling planned in 2022 with the intent to grow the overall resources and reserve base,” CEO Jody Kuzenko said in a guidance release.

About half (US$19mn) will be directed to infill and step-out drilling at Media Luna and an initial infill drill program at the adjacent EPO deposit.

A total of 64,000m of drilling is planned at Media Luna.

About US$6.0mn will be spent on 28,000m of infill and step-out drilling at ELG Underground, with US$9.0m invested in 34,500m at near-mine and regional targets.

Finally, US$5.0mn is budgeted for ore control and definition drilling in the ELG Open Pit and Underground.

Agnico Eagle Mines, 2022 Mexico exploration budget: US$31.3mn

Agnico Eagle Mines is planning a US$324mn exploration program for 2022, with almost 10% directed at Mexico.

The company has budgeted US$16.7mn for 51,500m of drilling at the Santa Gertrudis project.

At Pinos Altos, Agnico Eagle will spend US$3.5mn on 17,400m of drilling, plus about US$800,000 on 5,000m of capitalized sustaining exploration.

At La India, US$2.7m of expensed and capitalized exploration is planned, for 13,000m of drilling.

Exploration will focus on expanding resources and testing targets at both mines.

The company also has a budget of US$7.6mn for Mexico regional exploration, which will include testing extensions of high-grade structures at the Amelia deposit at Santa Gertrudis.

SMALLER BUDGETS

Other mining companies with smaller Mexican exploration budgets include Orla Mining, which plans to invest US$10mn at its silver-gold Camino Rojo property.

Production at the Camino Rojo oxide mine began late last year.

The company announced a 10,000m program testing targets on the Camino Rojo trend and south of the mine, plus 8,250m on the Camino Rojo sulfides deposit and 2,500m to delineate mineralization in part of the pit covered by a layback agreement with Fresnillo, which allowed the company to extend the pit into Fresnillo’s concessions.

Endeavour Silver plans to invest US$8.7mn in exploration at its Mexican mines and projects, while Fortuna Silver has earmarked US$7.4mn for exploration at its San José silver-gold mine.

Alamos Gold has a US$7.0mn exploration budget for its Mulatos property in Mexico, with Equinox Gold planning to spend US$4.0m on drilling at Los Filos.

Coeur Mining did not give guidance for exploration at Palmarejo in its Q4 earnings release, but spending reached US$14.0m at the asset last year.

“Coeur plans for six drill rigs to be active at Palmarejo in 1Q22, focusing on infill drilling in northwest Independencia and Hidalgo zones, and expects to maintain this pace throughout the year,” the company said.