Tag Archives: Sierra Metals

Mexico miners to suspend operations for April following government decree

Mexico has become the latest country to enforce a suspension of non-essential activities in response to the outbreak of the COVID-19 pandemic, with its Ministry of Health ordering a temporary halt of activities until April 30 in order to slow the virus spread.

Mexico is the world’s largest silver producer, having produced 6,300 t of the precious metal in 2019, according to the US Geological Survey. This was an increase of 180 t, year-on-year. It is also hosts major copper and zinc mines operated by Grupo Mexico and Southern Copper, and produces a significant amount of gold.

It joins the likes of Peru, Quebec and South Africa in declaring suspensions of all non-essential activities in order to curb the spread of the virus.

Among the miners with operations in the country to have already reacted to the Mexico Ministry of Health’s announcement was Newmont, Pan American Silver, Sierra Metals and Argonaut Gold.

Newmont, which operates the Peñasquito mine in the state of Zacatecas, said it was taking steps towards a safe and orderly ramp down of operations at the asset.

“At this time, mining has not been deemed an essential activity under the decree and the company is engaging with the government to understand the intended impacts of the decree on operations,” it said.

“Peñasquito will work closely with local governments, neighbouring communities, employees, unions and contractors to ensure a safe and orderly ramp down that complies with the federal government’s directives.”

Tom Palmer, President and Chief Executive Officer of Newmont, said the company intended to comply with Mexico’s latest directive, while engaging with the government to gain further clarity regarding “important activities that may continue at the mine”.

In the meantime, the company would ensure Peñasquito, which is the largest gold mine, second largest silver mine and one of the largest producers of zinc and lead in Mexico, remains well-positioned to safely and efficiently ramp up operations in a timely manner once the government’s directive is lifted, Palmer added. This includes maintaining critical safety, environmental management, infrastructure maintenance and security activities, while continuing to provide essential community support.

Pan American Silver, which operates the La Colorada (Zacatecas, pictured) and Dolores (Chihuahua) operations in Mexico, said it would expand its initiative of reducing the number of people on site to increase physical distancing, to bring the mines into compliance with the executive order.

It is continuing to conduct care and maintenance at the suspended operations to sustain strict safety and environmental systems, and to ensure operational readiness when the government restrictions are lifted and Pan American determines it is safe to resume operations, it added.

La Colorada produced 8.2 Moz of silver in 2019, while Dolores’ output came in at 5.1 Moz.

As a result of this declaration, Sierra Metals said it will only maintain an essential services crew at its Bolivar mine site until April 30, and the Cusi mine site will be placed into care and maintenance during this period. “The company anticipates resuming normal production levels at the mines after this period,” it said.

Bolivar, an underground mine with a 3,600 t/d processing capacity, had previously been expected to produce 16,402- 18,225 t of copper-equivalent in 2020, while the Cusi underground mine was down to produce 1,732-2,126 oz of silver.

Sierra Metals added: “Production can recommence to normal levels very quickly after April 30, and the company has some operating flexibility at Bolivar to run the ore processing mill at higher levels, which should help recover lost ore tonnages from this suspension.”

Argonaut Gold, which is looking to merge with Alio Gold – a transaction that will see it increase its Mexico exposure – said it was working towards an orderly suspension of mining, crushing and stacking activities at its El Castillo gold-silver open-pit mine in Durango, and its La Colorada open-pit operation in Sonora. These assets produced 131,277 gold-equivalent ounces and 55,338 gold-equivalent ounces, respectively, in 2019.

The company added: “Given that Argonaut operates heap leach mines, the company expects metal production and metal sales will continue during the temporary suspension of mining activities.”

Buenaventura and Sierra Metals scale back Peru operations

Compañia de Minas Buenaventura and Sierra Metals have become the latest companies to scale down activities in Peru following the government’s issuing of a supreme decree and declaration of a national emergency in order to contain the COVID-19 virus outbreak.

These restrictions currently remain in place for a 15-day period, commencing March 16, and have already seen Newmont, Anglo American and Freeport McMoRan scale back operations in the country.

Buenaventura, in accordance with these restrictions and within the framework of the company’s Pandemic Response Plan, as well as local and national health authority requirements and recommendations, says it will limit the activities of its operations to those which ensure functionality of its mine pumping systems, water treatment plants, energy supply, hydroelectric substations, health services as well as safety conditions including backfill and general support, among others.

Sierra Metals, meanwhile, has temporarily ceased mining operations at its Yauricocha mine (pictured), saying it continues to seek further clarity on the declaration and its impact on mining operations in Peru.

Both companies say they are prepared to immediately restart operations once they have received notice from federal and local authorities that it is appropriate to do so.

Buenaventura commented: “All operations and offices have implemented the appropriate travel restrictions, surveillance, monitoring and response plans to reduce the risk of COVID-19 exposure and outbreak, including health screening of contractors, visitors and employees when appropriate.

“In addition, individual operations continually assess the situation as it evolves and have limited external visitors to only those who are considered to be business critical. Each of its operations also continue to monitor and implement business continuity measures to mitigate and minimise any potential impacts of the global outbreak that might emerge on its operations, supply chain, commercial and financial activities.”

Sierra Metals President and CEO, Igor Gonzales, meanwhile, said: “We take the safety of our employees very seriously and have complied with the government’s requests. We have sent 470 staff home from the mine, while an emergency staff of 150 remain at the site.

“Management continues to follow the recommendations provided by the World Health Organization and Peruvian Health Authorities. We continue to monitor and seek clarity on the situation and will update shareholders and the market further as things progress.”

While Buenaventura did not mention its 2020 guidance in the release, it did say there had been no material impact to production or shipment of concentrate from any of the company’s operations to date as a result of COVID-19.

“Additionally, there has been no significant disruption to the supply chain of the company’s operations. Buenaventura’s central headquarters is in frequent contact with all individual operations and associated mine managers to ensure timely updates on the situation and provide any necessary logistical support,” the company said.

Sierra Metals said its guidance remains unchanged at this time, given Yauricocha had been running ahead of budget since the beginning of the year, and the company is ahead on 2020 production tonnage to date.

“Additionally, the mine has approximately 37,000 t of ore stockpiled at its processing mill, which represents more than two thirds of the ore needed by the mill during the disruption period and it can recommence production very quickly.

“Furthermore, the company has the operating flexibility to temporarily run the ore processing mill above the 3,150 t/d capacity, which should help Yauricocha recover lost ore tonnages from this stoppage.”

In addition to Buenaventura and Sierra Metals, Teck Resources announced that Compania Minera Antamina, in which Teck has a 22.5% interest, continues to operate the Antamina mine under an exemption from recently announced government restrictions.

it said critical operations will be maintained by a reduced workforce throughout the 15-day national emergency quarantine period, with appropriate precautions being taken by Antamina to protect its workforce during this “challenging period”.

The company clarified that there had been no confirmed cases of COVID-19 at the mine site and, assuming no further adverse developments in connection with COVID-19, any temporary reduction in production was expected to be recovered in line with existing 2020 guidance.