He says the current deal-making environment has worsened, lamenting a diminished availability of high-quality projects meeting the team’s investment criteria. He suggests the industry’s chronic underinvestment in exploration and development for new mines is partly to blame.

Smallwood also outlines in an interview during a recent industry event in Toronto with The Northern Miner’s western editor, Henry Lazenby, how Wheaton plans to achieve its long-term objective of reaching and maintaining over 850,000 gold-equivalent oz. of yearly production.

Watch the full video here:

“Whatever report we have in front of us, we are not convinced by it,” said VL Kantha Rao, secretary at the Ministry of Mines, which administers Hindustan Zinc.

Last September, the company said it plans to create separate entities for its zinc, lead, silver and recycling businesses to unlock potential shareholder value.

But it did not consult the government, which has a 29.54% stake in the company, on the planned move, another government official told Reuters on the condition of anonymity.

The official also said the government was not convinced by Hindustan Zinc’s rationale for the split and that the Ministry of Mines has lodged its objection with the company.

Hindustan Zinc CEO Arun Misra told Reuters the company had received the ministry’s communication, which will be discussed with the board along with the management’s observations.

However, Misra said he believes demerging the company to create a separate silver and zinc entity will help improve its market capitalization, based on a report by a consultant.

A year back, the government had opposed Hindustan Zinc’s proposal to buy two entities of Vedanta — which has a 64.9% stake in Hindustan Zinc — and forced the company to drop the plan.

(By Neha Arora and Nikunj Ohri; Editing by Shounak Dasgupta and Savio D’Souza)

The Yumpag silver project was approved to mine 1,000 metric tons per day, which will allow it to produce an estimated 6.5 to 7.2 million ounces of silver (184 to 204 tons) by 2024, the country’s energy and mines ministry said in a statement.

Buenaventura said it would start a first phase of explorations “in the short-term” funded with $84 million while at least $30 million would contribute to a second phase.

(By Marco Aquino; Editing by Steven Grattan)

The Peruvian firm said in a statement, posted to the local regulator, that it would suspend its operations in the San Cristobal, Carahuacra and Ticlio mines in the center of the country for up to 30 days.

Peru is the world’s second largest producer of copper, silver and zinc, which are key to its economy. Sales of the metals are equivalent to 60% of all the country’s exports.

The mines are part of the Yauli mining unit, located in the department of Junin, 170 kilometers (105.63 miles) from capital Lima, which produces zinc, lead, silver and copper. The Rumichaca tailings dam is in the same area.

The company did not specify what impact the suspension of activities would have on production, but said that during the shutdown period “all the necessary care and maintenance work will be carried out to restart operations as soon as possible.”

(By Juana Casas; Editing by Deepa Babington)

According to the study, confidence in the world’s ability to achieve net zero by 2050 seems to be eroding as it becomes more difficult to ensure adequate investment returns and progress diverges in a fragmenting world. This view is consistent across most regions and is most strongly held among people working in the oil and gas sector.

Bain & Company surveyed over 600 industry executives in mining, oil and gas, utilities, chemicals and agribusinesses across the globe to better understand their views on the energy transition, new technologies, and investment opportunities, and where they see the greatest challenges for decarbonization.

“This year’s survey found that energy and natural resource companies have not dampened ambitions for their transition-oriented growth businesses. However, customers’ willingness to pay is a growing issue, as is the ability to generate adequate return on investment (ROI) in energy transition-oriented projects. As a result, companies are focusing on projects with a viable ROI path,” said Joe Scalise, head of Bain & Company’s energy and natural resource practice. “The longer the executives are at the front lines of the energy transition, the more sober they are getting about the transition’s practical realities.”

The survey points out that executives in the Middle East (61%), Asia-Pacific (55%), and Latin America (51%) are feeling more optimistic about the prospects of their transition-oriented growth such as renewables, hydrogen, bio-based products, and lithium and other transition commodities that will contribute to their company’s valuation and profits by 2030. Hence, they are maintaining or increasing green investments. Only 4%, 12% and 10%, respectively, of executives from the three regions expressed less optimism, while the remainder showed no significant change.

The survey revealed a more balanced picture in Europe where 30% of executives revealed more optimism vs. 27% who were less optimistic about their new energy growth business areas contributing to the bottom line.

In North America, 29% of executives were more positive compared to 17% who were less positive on their transition-related growth areas.

Returns to scale-up

“Like last year, executives say the greatest obstacle to scaling up their transition-oriented businesses is finding enough customers willing to pay higher prices (or having equivalent policy support) to create sufficient return on investment,” the report states. “In fact, the share of executives identifying this as a very significant roadblock jumped 14 percentage points from 2023 to 2024, to 70% of executives.”

The experts behind the study note that the direct impact of higher interest rates on the cost of transition projects is likely shaping executives’ perspective on the challenges associated with customer willingness to pay. 

Bain has found that higher rates put upward pressure on the effective cost of low-carbon projects and a 500-basis-point increase in the cost of capital can increase the total annual revenue required to finance a project by as much as 50%.

Trendy North America

The survey presents North America as an emerging leader for green investments as 79% of all executives view it as an attractive region for energy transition investments. The next most attractive region is Europe at 65%. 

Australia and New Zealand come in as second runner-ups at 43%. 

Even as increasing government subsidies make some regions, such as North America, more attractive for investment, executives have growing concerns about policy stability.

The US Inflation Reduction Act is a major factor in North America’s investment attractiveness, but factors such as the availability of relatively low-cost natural gas feedstock also influenced the result. 

“However, while almost two-thirds of US executives surveyed agree that the IRA’s subsidies target the right areas, less than one-quarter believe that the policy regime will remain stable over the next five to 10 years,” the dossier states. “Furthermore, 42% of US executives think the IRA’s subsidies are unclear and that the rules are not easy to follow.”

About 70% of executives worldwide say that reducing policy uncertainty would very significantly improve their ability to scale up transition-oriented businesses.

Tumbling metal prices account for more than half all of impairment charges, declared when fixed assets fall below market values, the study of 105 TSX-listed mining companies found. They incurred $68 billion in charges from 2002 to 2015. Using unfamiliar technology and locating in developing countries also contributed, data show.

Metal price drops accounted for 143 of 268 cases and $25.2 billion in impairment charges, according to the study published last month in Resources Policy, an international journal on mineral rules and economics with editors in the United States, Australia and China. The research appears appropriate at a time when nickel and lithium prices have crashed from 2022 highs as gold has set new records.

“While impairments have been shown to be a common occurrence across mining companies, they also are a major contributor to the industry’s low average returns,” said the authors led by Andrew Gillis of Edmonton-based Aurora Hydrogen.

“The degree of impairments is higher at mines in developing countries and at mines where the geographic location and mining processes are new to the company operating the mine,” said the authors, which included John Steen and W. Scott Dunbar of the Department of Mining Engineering at the University of British Columbia in Vancouver, and Andrew von Nordenflycht of the Beedie School of Business at Simon Fraser University in Burnaby, BC.

Get lucky

Forecasting by its nature is uncertain. But some firms get lucky and only face a few impairments, while others get unlucky and suffer many or large impairments, the authors said. Their targeted years of research coincided with the rise of the commodity super-cycle 20 years ago followed by the financial crisis and declining metals prices from 2012.

The group recommended mining companies should improve their forecasting of mineral reserves, capital costs, production costs and commodity prices, which all impact future cash flows. It noted how C-suites might blame falling metal prices for impairments because other slips in capital or operating costs could be directly attributed to their own forecasting. The flip side is that rising metal prices can hide some other forecasting errors. And forecasting in foreign lands is simply more difficult, the authors said.

“Higher impairments in developing countries stem from lower information availability about market conditions and/or more volatile local market prices and conditions,” the authors said. “The sources of uncertainty are just greater, making forecasts harder and forecast errors easier, even for experienced forecasters.”

In the end, the researchers recommended more studies on forecasting. They could try to pinpoint the root causes of forecasting errors through personal interviews with project participants, detailed comparisons of feasibility studies and actual outcomes as well as assessing their methods of error prevention.

“Asset impairments have been identified as a primary determinant of long-term shareholder returns across Canadian mining firms,” the authors said. “Our findings suggest looking more closely into price forecasting procedures at mining companies to see if certain techniques or circumstances lead to more or fewer price-driven impairments.”

The document was produced in the absence of an organic law to regulate the issue, which had become a point of concern for foreign investors, particularly in the mining sector. 

The manual, which is informed by constitutional standards and international treaties for the implementation of prior, free and informed consultation, was issued by Ministerial Agreement 002 on March 6, 2024.

The guide is considered to be of mandatory application before authorizing the prospecting, exploration, exploitation and commercialization of mineral resources. It also details the processing times for the approval of each of these activities when they are to take place in or around vulnerable communities and Indigenous lands that could be environmentally or culturally affected. 

The manual states that prior consultation dialogues may lead to the modification of certain mining projects. However, it also highlights that the results of the prior, free and informed consultation process are not binding, which means that the government could choose to greenlight projects even without the consent of the affected communities.

This last point set off the alarms of environmental groups and on March 8, the Confederation of Indigenous Nationalities of the Ecuadorian Amazon (Cofeniae) issued a communiqué rejecting the manual and saying that it is aimed at ignoring the rights that are protected by what is known as “organic law reservation.” In their view, the manual is an attempt to impose an extractive agenda and bypass democratic controls.

The “organic law reservation” principle states that higher laws are infringed upon when a lower law is issued on a topic that is regulated by the Constitution, as is prior consultation in this case.

“Continuing with its extractivist and neoliberal agenda, President Noboa turns our rights into a mere administrative procedure to facilitate the interests of the mining industry and speed up the approval process of mining concessions,” the statement reads. 

The government, on the other hand, defends that the manual was created following previous statements of the Constitutional Court and Article 7 of Convention 169 of the International Labor Organization, which states that no segment of a national population has the right to veto development policies that affect an entire country.

Perseus is offering A$0.55 cash per each share of OreCorp it does not already own, which values the target company at A$258 million ($172m). The bid represents a 4% premium over its rival Silvercorp Metals (TSX, NYSE: SVM). 

Silvercorp approached OreCorp in August last year, hoping to obtain the Nyanzaga gold project in Tanzania, located near Barrick Gold’s (TSX: ABX; NYSE: GOLD) Bulyanhulu mine and AngloGold Ashanti’s (JSE: ANG) (NYSE:AU) Geita mine.

Both bidders, who have been battling for OreCorp since, claim Tanzanian authorities are ready to approve their offers.

The Nyanzaga mine would cost $474 million to build and is slated to produce 242,000 ounces gold per year over its first decade, according to a feasibility study issued in August 2022.

Perseus has three operating mines in Ghana and Côte d’Ivoire, producing gold at a rate of more than 535,000 ounces per year.

Vancouver-based Silvercorp has two producing precious metals mines in China and has been looking to diversify its portfolio. Its bid for OreCorp closes on March 22 unless extended. 

The Canadian miner, which reported a loss of $92.3 million in the fourth quarter of 2023, booked a $90.6 million charge related to the anticipated closure of the operation, which would leave about 5,800 direct and indirect employees in limbo.

The company also recorded impairment charge of $10.1 million related to materials inventory at San Jose, Burkina Faso’s Yaramoko, and Argentina’s Lindero mines.

After adjusting for impairment charges and other non-recurring items, the company’s adjusted attributable net income in the last quarter last year was $20.6 million or $0.07 per share. This compares to $6.4 million or $0.02 per share in Q4 2022 and can be explained primarily due to higher gold sales and prices.

Despite promising exploration results at the newly identified Yessi vein, the Vancouver-based miner is moving forward with its plans to close the San Jose mine, but said a decision on whether the Yessi discovery can support operations beyond 2024 will be made in the second half of the year. 

Chief executive Jorge Ganoza said this year Fortuna Silver will focus its exploration efforts on the Diamba Sud gold project in Senegal and the Seguela gold mine in Côte d’Ivoire.

Africa expansion

The precious metals producer inked a deal earlier this week with Australia’s Turaco Gold (ASX: TCG) that gives it the option to gain a 80% interest in five exploration permits that make up the junior’s Tongon North project in Côte d’Ivoire.

Under the agreement, Fortuna is required to make an initial payment of $100,000 to Turaco and invest a minimum of $3.5 million in the project over the next three years.

If Fortuna decides to exercise the option, Turaco can choose to either co-venture with Fortuna, maintaining a 20% interest, or sell its remaining stake for $1.5 million in cash.

The deal would expand Fortuna’s presence in the region, adding to a portfolio that also includes the Yaramoko gold mine in Burkina Faso.

The company also has operating mines in Argentina and Peru. 

The bought deal is offered by a syndicate of underwriters lead by Research Capital Corp. and Haywood Securities. The underwriters have been granted an aggregate cash fee equal to 5% of the gross proceeds.

Dolly Varden shareholders Hecla Canada and Fury Gold Mines will be entitled to acquire Dolly Varden shares at a price of C$0.80 each to maintain their pro rata equity interest in the company.

The Kitsault silver-gold project combines the former Dolly Varden and Torbit mines as well as the Homestake Ridge project in the Golden Triangle of British Columbia. The property is located 25 km by road to tide water. The project also contains the Big Bulk project containing a porphyry and skarn-style copper-gold mineralization.

Resources have been established for both the Dolly Varden and Homestake Ridge projects. The indicated material at Dolly Varden contains 3.4 million tonnes grading 299.9 g/t silver for 32.9 million contained oz., using a cut-off of 150 g/t silver. Homestake Ridge contains 736,000 tonnes grading 74.8 g/t silver for 1.8 million contained oz., using a cut of 2.0 g/t silver equivalent. Together the indicated resource contains 34.7 million oz. of silver.

There is also an inferred portion containing 29.3 million oz. of silver. The Dolly Varden portion is 1.3 million tonnes grading 277.0 g/t silver, and Homestake Ridge contains 5.5 million tonnes grading 100 g/t silver.

The agreements were formalized on Tuesday at the Prospectors and Developers Association of Canada (PDAC) convention in Toronto. Attending the event was the President of Ecuador, Daniel Noboa, alongside Minister of Energy and Mines Andrea Arrobo; Minister of Production, External Commerce, Investments, and Fisheries, Sonsoles Garcia; and Minister of Foreign Affairs Gabriela Sommerfeld.

Condor IA

The Condor IA — totalling $100 million — provides a foundation for the continuing advancement of the project towards development and for the negotiation of an investment protection agreement (IPA), which would be required for future mining construction and operations, Adventus said.

The amount includes $52 million of historical spending made on the project from 2010 to 2023, and the future investment commitment of $48 million for the period between 2024 and 2038. The IA also extends to include any additional investments made by the company during the period, which would be included for investment protection in the future IPA.

Condor represents a highly mineralized project comprising multiple deposits that together hold 2.3 million oz. of gold in indicated resources and 4.3 million oz. inferred. The property is located 35 km south of the 9.5 million oz. Fruta del Norte project.

The project was acquired by Adventus through its recent merger with Luminex Resources (TSXV: LR), which had a 98.7% interest in Condor. The remaining interest is held by the pension fund for Ecuador’s armed forces personnel.

La Plata IA

The La Plata IA represents a commitment exceeding $157 million, which Atico says signifies the confluence of interests between the Ecuadorian state and the company in pioneering new ventures within the mining sector.

Like the Condor agreement, the investment encompasses most previous and future exploration, development, construction and initial sustaining investment phases of the La Plata mining project. This includes the facilitation in securing all requisite approvals, licenses and permits, ensuring adherence to both Ecuadorian legal frameworks and international standards.

This agreement lays the foundational groundwork for the execution of a formal IPA in the forthcoming period, marking a significant milestone in the partnership between the Ecuadorian state and Atico, the company said.

La Plata represents a high-grade gold-rich VMS deposit that supported a small-scale mine operation from 1975-1981. The property consists of two concessions covering a total area of 23 sq. km. along its 9-km length, which contains known mineralization in two VMS lenses and nine priority exploration targets.

An independent preliminary economic assessment (PEA) dated 2019 estimated an inferred resource of 1.9 million tonnes at an average grade of 4.1 g/t gold, 49.4 g/t silver, 3.3% copper, 4.5% zinc and 0.6% lead.

Vares, which produced first concentrate last week, is the result of Adriatic’s efforts to revive a former silver operation that was abandoned during the years of civil unrest that hit the region in the early 1990s.

The opening event took place at the Vares processing plant and was attended by the Nermin Nikšić, Prime Minister of the Federation of Bosnia and Herzegovina, Zdravko Marošević, Mayor of Vares and other authorities.

Adriatic Metals said it will now work on increasing processing activities to reach nameplate capacity of 800,000 tonnes by the fourth quarter of this year.

Chief executive officer, Paul Cronin, told MINING.COM that the original idea was to resume operations at the old open pit, which still has 7 million tonnes of resources. Studies conducted later showed high levels of harmful elements, particularly mercury, so Adriatic Metals chose not to go that route.

Instead, the junior invested in exploration and pinpointed what is now its flagship silver-zinc asset, which has been awarded the status of “project of special importance” by the government of Bosnia-Herzegovina.

Adriatic, which went from the exploration phase to first concentrate production in less than seven years, invested $250 million to bring Vares back to life.

“I am delighted to celebrate this momentous occasion with the team who helped deliver this project,” Cronin said in the statement.

“This not only a significant milestone in Adriatic’s journey to becoming a mid-tier, European focused mining company, but also a turning point for the local community as well,” he noted. 

The company said the development included the use of the latest technology available and was completed using local workers and suppliers.

“It demonstrates that mining operations can be constructed and operated in a sustainable way in Europe, while supporting the economy and improve living standards both locally and nationally,” Cronin said.

The Vares project contributed to 25% of Bosnian 2022 foreign direct investment and is expected to account for 2% of the country’s GDP during operations.

About 27% of the mine’s employees are women, Adriatic noted, which exceeds the global mining workforce average of 15% according to a 2020 World Bank report. It also surpasses the approximately 10% representation in Bosnia and Herzegovina.

The project is located in northwest British Columbia about 60 km south of Telegraph Creek and near an existing seaport. The study is due by the end of 2024 or early 2025.

Planned expenditures at Schaft Creek this year are C$18.7 million, which will be fully funded by Teck. Metallurgical tests will be concluded, and drilling will be carried out in the high wall, tailings storage facility and the rock storage facility.

Engineering studies of those sites and proposed infrastructure will be done, and the road alignment and the construction timeline will be updated. Updates to the resource, geologic, structural and slope stability models will also be made. The environmental baseline data collection begun last year will continue with the collaboration of the Tahltan Nation.

A preliminary economic assessment (PEA) was done for Schaft Creek in 2021. At that time, a pre-tax net present value with an 8% discount was $1.4 billion and the internal rate of return was 15.2%. The after-tax NPV8% was $841.1 million and IRR was 12.9%.

Over a 21-year mine life, 5 billion lb. of copper, 3.7 million oz. of gold, 226 million lb. of molybdenum and 16.4 million oz. of silver in concentrate will be produced.

The initial capex was given as $2.65 billion, and the sustaining costs were $848.7 million, including closure costs of $154 million. All-in sustaining costs were estimated at $1.18/lb. payable copper.

Also in 2021, the resource estimate was upgraded to 1.3 billion tonnes grading 0.26% copper, 0.16 g/t gold, 0.017% molybdenum and 1.25 g/t silver in the measured and indicated category. The M+I resource contains 7.77 billion lb. of copper, 1.18 million oz. gold, 511 million lb. molybdenum and 9.3 million oz. silver.

There is also an inferred reserve of 344 million tonnes grading 0.17% copper, 0.11 g/t gold, 0.013% molybdenum and 0.84 g/t silver.

Drill hole 1274-24-293 intersected 22.7 metres grading 3.5% copper, 0.7 gram gold per tonne, and 6.6 grams silver from 120 metres depth including 10.6 metres at 5.4% copper, 1.3 grams gold and 9.6 grams silver, Abitibi reported on Thursday. Drill hole 1274-24-294 cut 34 metres at 3% copper, 1.5 grams gold and 6 grams silver from 135 metres depth, it said.

“These are some of the highest-grade intercepts in the project’s history and show a way to potentially increase the grade of our block model,” Abitibi CEO Jonathon Deluce said in a news release. “Investigating the significant increase in grade in #293 when compared to the historical results will be a key objective of ours.”

The results support the project’s near-surface open-pit potential, Abitibi said, adding that the project feeds into the global energy transition’s need to expand copper production by nearly three times current levels by 2040, according to the International Energy Agency.

Shares in Abitibi Metals, which was known until last year as Goldseek (CSE: GSK), gained 3% on Thursday morning in Toronto to C$0.69 apiece, valuing the company at C$68.5 million. They’ve risen from C$0.14 in November.

Giustra-backed

Abitibi is advancing a plan to earn 80% of the project over seven years from Soquem, a subsidiary of Investment Quebec. The junior holds 9.9% of the project and last year raised more than C$14 million from investors such as Frank Giustra, who helped start Wheaton Precious Metals (TSX: WPM, NYSE: WPM; LSE: WPM) and Endeavour Mining (TSX: EDV; LSE: EDV), for a four-year work program.

B26 holds 7 million indicated tonnes grading 2.9% copper-equivalent (1.3% copper, 1.8% zinc, 0.6 gram gold per tonne and 43 grams silver); and 4.4 million inferred tonnes at 3% copper-equivalent (2% copper, 0.2% zinc, 1.1 grams gold and 9 grams silver), according to a 2018 resource estimate by Soquem.

Abitibi’s initial 10,000-metre drill program has completed 6,088 metres across 20 holes so far. The company plans 20,000 more metres this year.

The 33-sq.-km site is 7 km south of the former Selbaie mine, where BHP (NYSE: BHP; LSE: BHP; ASX: BHP) produced copper, zinc, gold and silver from 1958 until 1993. There’s still a nearby working power line that served the Selbaie mine. B26 is 90 km west of the town of Matagami, which has a skilled mining workforce for Glencore’s (LSE: GLEN) complex there.

Beats old holes

The results released Thursday are associated with well-defined mineralization in a network of nearly massive chalcopyrite veins, the company said. The grade within the first 140 metres of hole 1274-24-293 showed 4% copper-equivalent compared with 1.2% copper-equivalent in a similar stretch of historical hole B26-40, it said.

“This represents an opportunity to investigate other areas in the deposit where the grade could be understated,” it said. “Overall, the style of mineralization observed in the two holes close together could follow a braided deformation pattern which can explain part of the grade variations observed.”

Abitibi plans to review historical cores to determine areas which require re-assaying to test for higher grades, as well as areas to duplicate to confirm whether there is a similar increase in grade. More drilling may test the down-dip and lateral expansion potential of the lens, it said.

Greg Chamandy, a former CEO of Montreal-based Gildan Activewear whom Abitibi calls a strategic investor like Giustra, said the assays are a great start.

“The results highlight the exceptionally high grade of the deposit,” Chamandy said in the company’s release. “With a well-capitalized treasury, strong leadership and one of the most promising copper and gold projects in North America, Abitibi is in an excellent position.”

On December 18, 2023, the company officially brought the Velardeña properties back into production, with mining occurring in six stopes. The plan was to steadily ramp up daily production to 150 tonnes per day in March, and ultimately reach a full production rate of 325 tonnes in the second quarter.

A month before that, it began producing gold-rich pyrite flotation concentrates from Velardeña, which have been stockpiled at the mines since late 2015, when they were last operational. Afterwards, mining activities were suspended due to combination of low metals prices, mining dilution and metallurgical challenges.

This time around, Golden had hoped the newly restarted Velardeña mines would be able to deliver positive cash flow in the first half of 2024 after progressively increasing the production rate.

However, the performance of the mine and processing plant during the first few months has not achieved the projected results, the miner said in a press release Thursday.

As a result, the company said it will now evaluate potential alternatives for the Velardeña properties, which may include a sale of properties or the winding up of certain Mexico operations.

Golden Minerals said its primary focus now is the exploration-stage Yoquivo property in Chihuahua state, containing an inferred resource of 17.2 million oz. gold equivalent within 937,000 tonnes grading 410 g/t silver and 2.1 g/t gold.

Golden Minerals’ stock plunged 37.5% to C$0.45 by midday Thursday following the announcement. It fell as much as 45.5% to a 52-week low of C$0.37 earlier in the session.

The company’s market capitalization is estimated at $4.4 million.

Adriatic Metals, which had planned to start production at the Vares mine in January, produced the first concentrate on Tuesday but the plant’s official opening will be in March after six years of exploration and a $200 million investment.

The project will continue to ramp up processing capacity to about 65,000 metric tons a month by the fourth quarter of this year, the company said.

Production will be increased by blending high-grade stockpiled ore with lower grade stockpiles, it added.

Adriatic Metals expects to dig about 800,000 tons of polymetallic ore per year from the mine, producing about 65,000 tons of lead-silver concentrate and 90,000 tons of zinc concentrate, with annual ore export revenue of about 800 million Bosnian marka ($444 million).

(By Daria Sito-Sucic; Editing by Jason Neely and David Goodman)

Global silver output from mines is expected to rise by 4% this year to 843 million troy ounces, the highest level in six years, partly due to the commissioning of Prognoz, according to the Silver Institute and consultancy Metals Focus.

“The silver concentrate will reach the global market in the third quarter of 2024,” said Polymetal, a Russian subsidiary of Polymetal International. The Russian subsidiary is due to change owner next month.

The open-pit mine will produce 5-7 million troy ounces of silver in silver concentrate on average a year, it added.

Ore mining at Prognoz, in Russia’s far east, started in the second quarter of 2023. The ore is now being transported for processing to Polymetal’s Nezhda concentrator located 675 km (419 miles) away from the mine.

Polymetal International said last week it would sell all its Russian assets, including Prognoz, to a Siberian gold miner to focus on its assets in Kazakhstan after the Russian ones were hit by Western sanctions.

The new owner has said that Polymetal’s current Russian management will stay on.

Despite rising output from mines, silver – used in jewellery, electronics, electric vehicles and solar panels as well as an investment – faces a fourth year of structural market deficit in 2024.

Reuters‘ latest poll of analysts shows them expecting silver prices to average $24.94 per ounce in 2024. The spot price on Wednesday stood at around $22.3.

(By Anastasia Lyrchikova and Polina Devitt; Editing by Mark Potter)

Coeur acquired the Silvertip mine and mill in 2017 but ceased mining and processing in 2020. During that time, the company spent over C$100 million at the site. The highest-grade drill intercept returned 4.9 metres at 1,261 g/t silver, 22.4% zinc, 22.0% lead, 0.13 g/t gold, 0.2% copper, 70 ppm indium, 60 ppm gallium and 0.08% tin.

At the end of 2022, the property had measured and indicated resources of 6.4 million tonnes grading 265 g/t silver, 9.68% zinc and 5.12% lead. In terms of contained metal, those numbers represent over 60 million oz. of silver, almost 1.4 billion lb. of zinc and 722.2 million lb. of lead.

The inferred resource is 1.7 million tonnes grading 239 g/t silver (14.4 million contained oz.), 10.09% zinc (378 million lb.) and 4.43% lead (166 million lb.).

The Silvertip exploration project is located within the traditional territories of the Kaska and Tahltan Nations, and Coeur has signed participation agreements with both of them.

Once the world’s third-largest silver mine, Escobal was acquired by Pan American through its $1 billion takeover of Tahoe Resources in 2018. A year prior, Tahoe was forced to halt operations at Escobal after Guatemala’s Supreme Court suspended the mine licence.

That decision supported a claim brought by environment and human rights group CALAS against the country’s Ministry of Energy and Mines (MEM), alleging it violated the local Indigenous people’s right of consultation in advance of granting the Escobal mining licence to Tahoe’s Guatemalan subsidiary.

A group of protesters that year near the town of Casillas blocked access to Escobal, delaying shipments and supplies.

The Constitutional Court’s ruling ordered MEM to carry out a consultation with the local Indigenous population, the Xinka communities, and it also upheld the licence suspension for Tahoe’s smaller Juan Bosco mine.

The underground operation, located in southeast Guatemala, about 3 km from San Rafael Las Flores, was in operations from 2014-2017. According to Pan American, it has 264 million oz. in proven and probable silver reserves and a 4,500 tonne-per-day plant throughput capability.

Escobal operations are on care and maintenance pending completion of an ILO 169 consultation. No timeline has been set for a completion of the consultation process or a restart of operations.

The underwriters, led by PI Financial will also be granted a 15% overallotment option, exercisable in whole or in part for 30 days.

Vizsla Silver’s shares fell by 12.5% to C$1.47 apiece as of 2:15 p.m. ET, for a market capitalization of C$307.6 million ($227.9m). The stock traded between C$1.26 and C$2.25 over the past 52 weeks.

Net proceeds of the financing, says Vizsla, will go towards the exploration, drilling and development of its flagship Panuco silver-gold project in southern Sinaloa, Mexico. The project is located within a 72-sq.-km. district hosting past producing mines that has seen limited exploration on a consolidated basis.

To date, the company has completed over 350,000 metres of drilling at Panuco, leading to the discovery of several new high-grade veins.

Earlier this year, it released an updated mineral resource estimate that includes an in-situ indicated mineral resource of 155.8 million oz. of silver equivalent (AgEq) and an in-situ inferred resource of 169.6 million oz. AgEq.

The indicated mineral resource is estimated at 9.5 million tonnes grading 289 g/t silver, 2.41 g/t gold, 0.27% lead and 0.84% zinc (or 511 g/t AgEq), while the inferred resource is calculated at 12.2 million tonnes grading 239 g/t silver, 1.93 g/t gold, 0.29% lead and 1.03% zinc (433 g/t AgEq).

For 2024, Vizsla said it is focused on de-risking the resource base located in the western portion of the district ahead of a development decision. It has budgeted over 65,000 metres of drilling designed to upgrade and expand the mineral resource, as well as test other high-priority targets across the district.

Located in the Golden Triangle region of BC, the 179 sq. km Treaty Creek property is said to host one of the largest gold discoveries in decades in Goldstorm. The deposit consists of six mineral domains with unique geological characteristics, five of which are gold dominant with lesser proportions of silver and copper. Domain CS-600 is dominantly gold and copper rich, with lesser silver.

An updated resource estimate published Tuesday showed 27.87 million oz. of AuEq within 730.2 million tonnes at a grade of 1.19 g/t AuEq. The contained metal breaks down into 21.7 million oz. of gold, 128.7 million oz. of silver and 2.9 billion lb. of copper at grades of 0.92 g/t, 5.48 g/t and 0.18% respectively. This equates to a 16% increase in gold, 14% increase in silver and 32% increase in copper content from the previous resource estimate almost a year ago.

The CS-600 domain, which forms a large part of the deposit and consists of a well-defined intrusive porphyry system, has an indicated mineral resource of 15.7 million oz. of AuEq within 400.3 million tonnes at 1.22 g/t AuEq. Included within the domain is a gold resource of nearly 10 million oz. at 0.78 g/t and copper of 2.7 billion lb. at 0.31%. The CS-600 resource has risen by 58% since last year’s update.

There is also an inferred resource of 6.0 million oz. AuEq within 149.6 million tonnes at 1.25 g/t AuEq, comprising 4.9 million oz. of gold at 1.01 g/t, 29.0 million oz. of silver at 6.02 g/t and 503.2 million lb. of copper at 0.15%.

“We not only pushed out the edges of the deposit, but we also successfully increased the grade of the inferred mineral resource,” Tudor CEO Ken Konkin said in a news release.

The 2023 inferred mineral resource was initially at 7.35 million oz. of AuEq grading 0.98 g/t AuEq, but the Tudor team was able to convert some of those ounces to the indicated category and increase the grade of the current inferred mineral resource.

“The higher gold-equivalent grades in the inferred category strongly suggests that we have not yet passed through the strongest portion of the Goldstorm mineralized system. We hope that the 2024 drill program can give us clear information about the configuration and boundaries of the deposit, as it remains open in all directions and at depth,” Konkin said.

The company will continue its work to expand the gold-silver-copper porphyry mineralizing system at Goldstorm with the view of outlining its economic viability. Tudor currently owns 60% of the project.

Shares of Tudor Gold rose by 6.2% to C$0.85 as of 12:30 p.m. ET, giving the Canadian junior explorer a market capitalization of C$194.7 million.

Lopez Obrador announced the proposal to prohibit new concessions for open-pit projects last week amid a slew of initiatives as he looks to shape political debate ahead of a June presidential election that his protégé is expected to win.

The proposal is unlikely to pass in the short-term, as Lopez Obrador does not have the two-thirds super majority in Congress needed to change the constitution.

But the frontrunner to succeed him, former Mexico City Mayor Claudia Sheinbaum, has said she will adopt his proposals as part of her platform.

The industry says such a move would be disastrous for the sector, which fuels 2.5% of gross domestic product. Mexico is the world’s top silver producer and a major gold and copper producer.

Of the 124 mines affiliated with the Camimex mining chamber, fewer than half are open-pit yet they represent 60% of Mexico’s output, according to the chamber.

“Prohibiting open-pit mining would imply the destruction of a strategic sector,” the chamber said in a statement this week.

It said open-pit mines represent more than $3.9 billion in investment and 200,000 direct jobs, and warned that a ban would eventually affect supply chains, forcing Mexico to import minerals at a higher cost.

Since taking office in 2018, Lopez Obrador has not granted mining concessions of any type, arguing that past governments gave too many approvals.

Mining executives have previously raised concerns over that practice as well as a 2023 law that shortened concessions and tightened water extraction permits.

“It’s no secret that this administration has been averse to mining,” said Jorge Ganoza, president of Canada’s Fortuna Silver Mines, which operates an underground silver and gold mine in southern Mexico. “If it were to continue, we would certainly see Mexico lose ground compared to other mining nations.”

Fortuna Silver has cut investment in Mexico from nearly half of its global spending to around 10% in recent years, he said.

That trend could continue if the proposal passes, said Riyaz Dattu, an attorney who advises Canadian companies on international arbitration. Canada represents 70% of foreign mining investment in Mexico.

“Companies cannot operate without an understanding on whether their investments will hold true in the next 10-20 years,” he said. “This will drive investments away.”

Environmentalists say open-pit mining carves out swaths of earth and uses dangerous chemicals, and Mexican Environment Minister Luisa Albores has called it “the most polluting” type of mining.

The ministry is also seeking to end fracking and prohibit concessions in water-scarce areas.

(By Daina Beth Solomon and Divya Rajagopal; Editing by Ernest Scheyder and Rosalba O’Brien)

This is despite losing five months of production from the Lucky Friday mine in Idaho due to a fire incident. The operation restarted in January of 2024, with first insurance proceeds received by the company this month.

In Alaska, Greens Creek delivered another year of strong and consistent performance as the largest US silver mine achieved record throughput, resulting in 9.7 million oz. of production, in line with the prior year.

The Keno Hill project in Yukon, which Hecla acquired in its takeover of Alexco Resource in the summer of 2022, began silver production in the second half of 2023, ending the year with 1.5 million oz. The mine is continuing to ramp up as major infrastructure gets finished, and is expected to produce 2.7-3.0 million oz. this year.

Meanwhile, the Casa Berardi mine in Quebec, which predominantly produces gold, began the transition to surface only mining, with results exceeding expectations for tons and cost per ton as the company operates its own surface fleet.

Looking ahead, Hecla is expecting consolidated silver production to increase by 15-20% to 16.5-17.5 million oz. this year, and then increase by another 30% (compared to 2023) to 18.0-20.0 million oz. by 2026.

Greens Creek’s silver production is expected to decrease in 2024 due to lower grades. Lucky Friday’s production guidance is 5.0-5.3 million oz., with the ramp up to full production expected to be complete in the first quarter.

This production outlook, according to CEO Phillips S. Baker Jr., would make Hecla one of the world’s fastest growing silver companies in the world.

Consolidated gold production, however, is expected to decrease further from 151,259 oz. in 2023 to 121,000-133,000 oz., primarily due to the transition at Casa Berardi.

Shares of Hecla Mining Company rose by 6.7% as of 12:30 p.m. ET, trading at $3.68 apiece in New York. The company’s market capitalization stood at $2.3 billion.

This represents the largest private investment in southern Arizona’s history, and the largest investment in the local Santa Cruz county economy to date by nearly nine times, the Australian miner said.

Last year, the Hermosa project became the first to be added to the United States’ FAST-41 permitting process, and the company said it has the potential to become one of the world’s largest zinc producers.

“Today’s investment decision represents a major milestone for our business and aligns with our strategy to reshape our portfolio toward commodities critical to a low-carbon future,” South32 CEO Graham Kerr said in a news release.

“[The] project will strengthen the domestic supply of critical minerals needed for clean energy technologies and national defense, reducing America’s reliance on foreign countries and transforming the local economy,” Hermosa project president Pat Risner added.

With a surface footprint of just over 600 acres and projected to use approximately 75% less water than other mines in the region, the operation has been designed to minimize its environmental impact, the company said.

The new investment will fund construction of key infrastructure projects, including water management systems, power, site facilities, underground shaft sinking, initial underground development and other work required to begin operations, it added.

Once completed, this infrastructure would support future potential development of other deposits at the site, including the battery-grade manganese deposit, South32 said.

Construction and mine development at Hermosa, made up of the Taylor (zinc-lead-silver) and Clark (zinc-manganese-silver) deposits, started last year with approvals from the State of Arizona.

“Development of the zinc deposit is the first phase of a regional-scale opportunity at Hermosa, with ongoing activities to unlock additional value from the manganese deposit,” Kerr said.

In January, South32 released a mine plan of operations as a roadmap of operational activities at the Hermosa project from start to finish located on lands managed by the Coronado National Forest.

Guanajuato produces silver and gold, plus lead and zinc by products, from five operations in Mexico: the wholly owned El Cubo mines complex, Valenciana mines complex (VMC) and San Ignacio mine, all in Guanajuato; the Topia mine in Durango; and the El Horcon mine in Jalisco.

In January, these mine operations generated 329,934 silver-equivalent (AgEq) ounces, derived from 141,854 oz. of silver, 1,843 oz. of gold, 279,726 lb. of lead and 269,276 lb. of zinc. The AgEq output represents the second highest level of production in the company’s history, bettered only by May 2023, it said.

January also represents the first month of the recently announced third party processing agreement for the El Cubo complex, which added 40,862 AgEq ounces, or 12% of total consolidated production for the month.

Total tonnes mined across Guanajuato’s operations also increased by 32% over December to total 56,691 tonnes. The company processes mineralized material at three production facilities: El Cubo, Cata (VMC) and Topia.

El Horcon, host to a past-producing mine, currently processes material from an existing stockpile. In January, it generated 10,183 AgEq ounces, or 3% of the month’s output. To date, El Horcon has produced over 37,000 AgEq ounces since starting processing the stockpiled material late in 2023.

Guanajuato CEO James Anderson said that the two sources of mineralized material, El Horcon and those at El Cubo, represent a “significant component of total production” and have contributed to generating the company’s highest volume of silver-equivalent production since May 2023.

“January’s results are further confirmation that the adjustments and efficiency upgrades implemented at our mines during the later-half of 2023 have us on-track in terms of quarter-over-quarter increases in precious metals production,” Anderson said.

Shares of Guanajuato Silver dipped 5.2% to C$0.18 apiece by 12:15 p.m. ET, nearly a 52-week low of C$0.17 (high was C$0.65). The precious metals miner has a market capitalization of C$63.6 million ($46.9m).

The precious metals miner ended last year with consolidated production of 154,600 GEOs, consistent with its prior forecast of 150,000-170,000 GEOs. The fourth quarter contributed 49,850 GEOs on the back of record performances at the Gold Bar mine in Nevada.

Elsewhere, the Fox complex in Ontario continued its steady production, finishing above 10,000 GEOs for the recent quarter. The San José mine in Argentina also overcame operational challenges of the first quarter, producing 19,150 GEOS in Q4.

For the full year, Gold Bar produced within guidance range at 43,700 GEOs, while Fox produced 44,450 GEOs, also within guidance range. San José, meanwhile, produced slightly below guidance at 65,650 GEOs.

Looking ahead, McEwen said the Fox and San José operations, which are operated by partner Hochschild Mining, will likely see reduced output in 2024, and has set of guidance of 130,000-145,000 GEOs for the year.

At Fox, the company will be starting the development of underground ramp access to the Stock orebodies, particularly Stock West, which it says will become the primary source of feed following the completion of mining the Froome deposit in 2026. This capital investment is partially funded by the $16.1 million flow-through financing completed in December.

At Gold Bar, the first half of 2024 is expected to deliver higher production relative to the second half, due to a scheduled waste stripping phase in the Pick pit, in preparation for the 2025 mining program. The mining sequence continues to be optimized, McEwen said.

Shares of McEwen Mining closed Monday’s session 1.1% higher at $6.94, capitalizing the company at $342 million.

Step-out drilling returned 79.49 g/t gold and 60 g/t silver over 12.45 metres, including 1,335 g/t gold and 781 g/t silver over 0.7 metre in hole HR23-389. Hole 399 returned 43.10 g/t gold and 66 g/t silver over 1.01 metres, and 40.33 g/t gold and 418 g/t silver over 1.7 metres within a broad zone grading 2.68 g/t gold and 20 g/t silver over 57.7 metres. A third hole (410) returned 10.17 g/t gold over 6.6 metres, including 50.70 g/t gold over 0.6 metre.

“The new high-grade gold and silver mineralization encountered in step-out drilling to the northwest of Homestake Silver represents a significant breakthrough in further defining, upgrading and expanding the mineralization at Homestake Ridge,” VP exploration Rob van Egmond said in a news release. “This new zone remains open to the northwest, projecting towards the Homestake Main deposit.”

“Whether we discover new zones of high-grade gold at Homestake Ridge or expand the large, wide and high-grade silver deposits at Wolf and Torbrit, drilling continues to deliver results from the premier, undeveloped gold-silver trend in Canada,” CEO Shawn Khunkhun said in the same release.

The objective of drilling during 2023 at the Homestake Main and Homestake Silver deposits was to expanded multiple, subparallel mineralized zones and to upgrade inferred resources in the projected plunge of the wider, higher-grade zone. The drilling completed in 2023 at Homestake Main was primarily resource expansion drilling, targeting both down dip and along strike from current resources.

Dolly Varden conducted exploration drilling last year at the Red Point, North Star and Wolf targets. Besides silver and gold, copper, zinc and lead were measured.

The indicated resource at Dolly Varden totals 3.4 million tonnes grading 300 g/t silver (32.9 million oz.), and the inferred resource totals 1.3 million tonnes grading 277 g/t silver (11.4 million oz.)

In detail, his proposal calls for banning the granting of open-pit mining concessions and activities related to the exploration, exploitation, benefit or use of minerals, metals or metalloids using the open-pit method.

To argue his case, López Obrador said that open-pit mining causes severe environmental damage and uses excessive water that could be supplied to water-scarce communities. 

“It is clear that open-pit mining transgresses human rights by affecting the right to a healthy environment and good health,” his proposal states. “The most significant effects are evident in the communities and towns near project areas, placing them in a situation of vulnerability and inequality.”

The proposal, however, does not mention underground mining. 

The motion is expected to revive hostilities between the Mexican government and big industry players, as the country’s oldest and largest mines are open-pit operations. In total, Mexico hosts 264 mines that extract surface minerals, most of them located in Chihuahua, Zacatecas, Sonora and San Luis Potosí. 

Top producers such as Grupo Mexico’s Buenavista del Cobre, Newmont Goldcorp’s Peñasquito, two of Fresnillo’s gold-silver units, and several other mines owned by Industrias Peñoles are open-pit operations.

Since taking over in 2018, the AMLO administration has not granted any new concessions through de facto mechanisms – but without the backing of any specific law. 

The recent move adds to the uncertain investment atmosphere in the country, whose miners were shaken back in May 2023, when Mexican Senators approved a new mining law in an accelerated process without opposition legislators present. 

The mining law reforms involve companies having to deal with an increased burden of pre-consultation, impact studies and water concessions, among other things. The new law also requires financial commitments (bonding) and shortens the tenure of mining concessions from 50 years to 30 years, with a one-time 15-year renewal possible.

The trend is a measure of an economic crisis in which inflation has been running at more than 30% and the central bank has allowed the currency to weaken 50% against the dollar, with more devaluation expected.

“Silver is the new gold,” said a salesman at a Cairo silver store who only gave his first name, Abanob.

In the year to Jan. 30, the price of a gram of 21 carat gold rose more than 120% to 3,875 Egyptian pounds ($126), data from the Federation of Egyptian Chambers of Commerce showed.

Demand for gold coins and bars surged nearly 58% from 2022 to 2023, according to the World Gold Council’s annual report.

Eman Mahmoud, a 51-year-old mother of three, said she had to opt for silver when buying jewellery for a friend’s new baby.

“A small 18-carat earring weighing less than a gram is more than 3,000 pounds. I can’t afford that as a gift anymore so I bought a silver necklace for around 1,900,” she said.

“It’s not the same, I know, but it still has value.”

Those who can have sought safety in foreign currency or property.

But the black market rate to buy dollars jumped as high as 71 Egyptian pounds last month, against an official rate of 30.85, before dipping below 60 pounds in recent days amid hopes of more IMF financing and Emirati investment.

And in a country where some 60% of the 105 million population is estimated to be below or close to the poverty line, few can afford to invest in high-end property where sales have been booming.

The price of one gram of silver more than doubled in a year but at about 47 Egyptian pounds, it remains far cheaper than gold.

Ramy Zahran, an 18-year-old high school student who wants to work in the silver business like his uncle, bought silver bullion for 31 pounds per gram little over half a year ago.

“My money would get me only 10 grams of gold,” he said.

($1 = 30.8500 Egyptian pounds)

(By Sarah El Safty, Farah Saafan and Ahmed Mohamed Hassan; Editing by Aidan Lewis and Angus MacSwan)

The drill program was designed to upgrade the resource categories, which was done successfully. The indicated resource is now 39.0 million tonnes grading 1.23 g/t gold, and the inferred resource is 146.2 million tonnes grading 1.11 g/t gold.

The new numbers represent a 1% increase in tonnage, but the overall grade increased by 11%. The earlier resource estimate (May 2023) included 6 million oz. in material grading 1.02 g/t gold. The next step is to complete a preliminary economic assessment.

The Moss project includes several targets along a 35-km mineralized trend. Neat the centre of the trend, the former North Coldstream mine produced 103 million lb. of copper, 44,000 oz. of gold, and 440,000 oz. of silver. The East Coldstream and Moss deposits are mentioned above. The remaining targets are known as Hamlin, Vanguard, and Iris.

The indicated resources increased by 300,000 oz. of gold, 200 million lb. of copper, 3.5 million silver and 2 million lb. of molybdenum.

The estimate used the same metals prices as the 2022 Mitchell and East Mitchell open pit estimates ($1,820/oz. gold, $4.20/lb. copper, $28/oz. silver and $13.5/lb. molybdenum).

The Kerr and Iron Cap deposits will primarily be underground mines with block caving, although there is a portion of the Kerr deposit that can be mined by open pit methods.

The indicated resource at Kerr is 384.2 million tonnes grading 0.22 g/t gold, 0.41% copper, 1.2 g/t silver and 5 ppm molybdenum. The inferred resource is 2.59 billion tonnes at 0.27 g/t gold, 0.35% copper, 1.7 g/t silver and 21 ppm molybdenum.

The Iron Cap deposit contains 471 million indicated tonnes at 0.38 g/t gold, 0.21% copper, 4.3 g/t silver and 39 ppm molybdenum. The inferred portion is 2.31 billion tonnes at 0.41 g/t gold, 0.27% copper, 2.5 g/t silver and 31 ppm molybdenum.

Seabridge chair and CEO Rudi Fronk said the resource restatements reflect gains from a consistent application of metal price parameters. The company is seeking a joint venture partner for KSM, so it believes it makes sense to normalize the estimates across all deposits.

The company further noted that the increased mineral resources compared to the previous estimate would only be mined after the 33 years of mine life based on the open pit reserves. Any future cash flows resulting from these additional mineral resources is not considered material.

In the Mithell, East Mitchell and Sulphurets deposits, the proven and probable reserves are 2.29 billion tonnes grading 0.64 g/t gold, 0.14% copper, 2.2 g/t silver and 76 ppm molybdenum. The contained metal within the reserves is 47.3 million oz. of gold, 7.32 billion lb. of copper, 160 million oz. of silver and 385 million lb. of molybdenum.

The economic analysis was based on a proven and probable mineral reserve estimate of 6.7 million tonnes at an average grade of 54.46 g/t silver and 0.47 g/t gold. This reserve, according to Avino, is adequate to allow for a nine-year project life, based on current tailings recovery assumptions including a processing rate of 2,250 tonnes per day. Metal recoveries are expected to average 77.2% and 74.9% for silver and gold, respectively.

Over the life of mine, the tailings deposit would produce 9.1 million oz. of silver and 76,000 oz. of gold, averaging 1 million oz. of silver and 8,445 oz. of gold per year.

These assumptions, together with an initial capital cost of $49.1 million and ongoing sustaining capital of $5.1 million, would result in a post-tax net present value, at a 5% discount rate, of $61 million, with an internal rate of return of 26%. The payback period is 3.5 years.

The PFS featured improvements in comparison to the PEA that was completed in 2017. The life of the project has increased by two years, the silver production has increased almost 3 million oz., and the gold production has more than doubled.

The notable financial improvements include a more than doubling of the project NPV from $28 million to $61 million on a post-tax basis. Other PFS highlights of significance include a reduced payback period and higher ESG metrics.

The oxide tailings deposit is located within the existing Avino mine operations, with well-established network of roads and power infrastructure. As a result, the risks associated with the tailings and heap leach design would be eliminated, the company said.

“The completion of the PFS is a key milestone in Avino’s path to transformational growth,” CEO David Wolfin said in a news release. “The economics of our oxide tailings project combined with the relatively low capital requirements has the potential to significantly enhance the current Avino operation and grow cashflow.”

“For the first time in Avino’s lengthy history, we are proud to demonstrate proven and probable mineral reserves. We have taken a dynamic leaching approach to the tailings reprocessing to improve overall recoveries and mitigate the potential recovery variability compared with heap leaching,” Peter Latta, VP technical services, added.

In July 2015, the Canadian resource company initiated arbitration process before ICSID after the Romanian government blocked the development of its flagship Roșia Montană gold-silver project.

Located in a historical mining district dating back to pre-Roman times, the Roșia Montană project represents one of the largest undeveloped gold deposits in Europe. It has a mineral reserve base totalling 10.1 million oz. of gold and 47.6 million oz. of silver, contained within 215 million tonnes at average grades of 1.46 g/t gold and 6.88 g/t silver.

The proposed open-pit mine was met with widespread protests in 2013, which forced the Romanian government to reject its permit. Revival of the project appeared more difficult after Roșia Montană became a part of the UNESCO World Heritage list.

Gabriel has been working on this project since 1997. After obtaining its licence in June 1999, the company said it has focused substantially all of their management and financial resources on the exploration, feasibility and subsequent development of the proposed gold mine.

The company said it has fulfilled its legal obligations and demonstrated Roşia Montană as a high-quality, sustainable and environmentally responsible mining project, yet Romania still “unlawfully” blocked the project without compensation, prompting the company to proceed with international arbitration.

The ICSID arbitration tribunal closed the case in September 2023, and per regulations, must issue its final decision to the parties within 120 days, which is before March 12, 2024.

Gabriel Resources closed Friday’s session 11.7% higher at C$0.57 per share, having reached a 52-week high of C$0.60 earlier. Its market capitalization ended at C$590.5 million ($438.6m).

A new agreement announced Thursday gives the Nisga’a a majority stake in the newly formed Nations Royalty. Vega Mining will acquire from the Nisga’a the rights to five existing annual benefit payment entitlements with projects in the Golden Triangle, in exchange for common shares in Vega’s capital. The privately-owned Vega — about which little public information is available — will be renamed Nations Royalty Corp.

The Nisga’a’s current royalty portfolio includes Newmont’s (NYSE: NEM) Brucejack gold mine, Seabridge Gold’s (TSX: SEA; NYSE: SA) KSM copper-gold-silver-molybdenum project, Ascot Resources’ (TSX: AOT) Premier Gold project and Red Mountain deposit; and new Moly LLC’s Kitsault molybdenum project.

The company is speaking with other First Nations and Indigenous groups to encourage them to join Nations, for the aim of combining royalties from mining projects and welcoming external investors as shareholders.

“Our people have a history of leadership and innovation, from significant legal victories to the first modern treaty in British Columbia,” said Eva Clayton, president of Nisga’a Lisims government. “Today, we embark on this new venture with Indigenous groups and leaders from the mining industry to promote cooperation and progress, ushering in a new era in Indigenous business, as well as Canada’s mining and natural resources sector.”

The deal comes as First Nations increasingly seek to benefit from resource development across Canada, and especially in BC, where Indigenous peoples including the Tahltan Nation and Williams Lake First Nation have reached participation agreements in mining projects. It also marks a contrast with the approach of settling disputes between Indigenous land claims and mining interests through the court system.

As part of the deal, Vega will complete a private placement for just over 11 million subscription receipts of shares at C$0.90 apiece, to raise at least C$10 million. Existing Vega shareholders will hold about 15.9% of issued and outstanding shares, the Nisga’a will hold 76.5% and investors in the financing will get about 7.6%. No timeline was given for the deal’s closing.

Frank Giustra, mining financier and CEO of Fiore Group, and now strategic advisor to Nations, said he’s honoured to collaborate with the Nisga’a and other First Nations in establishing the company.

“Almost two decades ago, I played a role in developing the metals streaming concept as a co-founder of Wheaton Precious Metals and I see Nations Royalty as a vitally important successor to this concept,” he said. “A core focus of the company is to build capacity for Indigenous people in the management of public companies and capital markets, which we hope will result in the creation of additional Indigenous economic ventures.”

Northwest BC mining veteran and Nations co-founder Robert McLeod is expected to be appointed as interim CEO and president of the company, though the goal is to have it managed and run by Indigenous people. McLeod played a major role in forming Nations and in bringing the Nisga’a and Vega together.

At the end of 2023, the MINING.COM TOP 50* ranking of the world’s most valuable miners reached a combined $1.42 trillion, up a healthy, if far from spectacular $48.7 billion over the course of 2023. Mining’s top tier is also worth $330 billion less than in March 2022.

Metal and mineral markets are volatile at the best of times – the nickel, cobalt and lithium price collapse in 2023 was extreme but not entirely unprecedented. Rare earth producers, platinum group metal watchers, iron ore followers, and gold and silver bugs for that matter, have been through worse.

Mining companies have become better at navigating choppy waters and as a whole the majors performed fairly consistently last year despite geopolitical and market turmoil, but within the ranking, 2023 fortunes were made and lost over what seemed like days.

The forced closure of one of the world’s biggest copper mines – and the subsequent collapse of owner First Quantum Minerals stock – served as a stark reminder of the outsized risks miners face over and above market swings.

Panama root canal

After months of protests and political pressure, at the end of November the Panama government ordered the closure of First Quantum Minerals’ Cobre Panama mine following a ruling by the Supreme Court that declared the mining contract for the operation unconstitutional.

Public figures, including climate activist Greta Thunberg and Hollywood actor Leonardo Di Caprio backed the protests and shared a video calling for the “mega mine” to cease operations, which quickly went viral. 

That mining cobre is at the nexus of the green energy transition is clearly an irony lost on those trying to save the world.  FQM is seeking arbitration and completely winding down operations will take time, but a reopening of Cobre Panama is not on the cards. 

From 25th position in the ranking at the end of March 2022 and a valuation well above $20 billion, the November-December sell off saw FQM drop out of the top tier altogether, ending 2023 at number 58 with a market cap below $6 billion. 

Cobre Panama supplied more than 40% of the company’s revenue, and with nickel prices plummeting FQM has also been forced to suspend operations at its Raventhorpe mine in Australia. 

Amid the inevitable takeover rumours now in circulation, shares in the Vancouver-based company have rallied in 2024, but still not enough to reenter the top 50.

No. 12 with a bullet 

If 2023 was an annus horribilis for FQM it was mirabilis for Amman Mineral Internasional. Stock in the Indonesian firm surged by 269% from its July debut in Jakarta to reach a market capitalisation of more than $30 billion at the end of last year – and number 12 in the ranking. 

That valuation is quite an achievement on annual revenue of $2 billion no matter how fat margins are at the company’s Batu Hijau copper and gold mine.  Batu Hijau is the third largest mine worldwide in terms of copper equivalent output (but no match for Cobre Panama when it comes to the orange metal alone)  and has been in production since the turn of the millennium. Amman is also developing the adjacent Elang project on the island of Sumbawa. 

Amman Minerals’ ascent has minted at least six new billionaires and the stock appears to be building on its success in 2024, rising by double digits in January already.

Indonesia’s other major mining IPO, Harita Nickel, was on a different trajectory altogether. After listing in April and raising $672m, the company has had a tough go of it and the stock has shed more than 38% since then as nickel prices continue to decline.

Shiny gold, dull silver, tarnished PGMs

The price of gold hit an all-time record on December 1, 2023.  But bullion’s best ever level passed without the usual fanfare and despite bullish indications for 2024, gold mining stocks did not exactly storm the rankings of the most valuable miners.

Over the course of 2023 gold and royalty companies on the MINING.COM TOP 50* ranking of the world’s most valuable miners added a collective $20.8 billion in market cap. 

And judging by gold miners’ performance so far this year, gold above $2,000 is not providing enough support. Newmont is already down 17%, Barrick has shed 13% and Agnico Eagle shareholders are 9% poorer. 

The number of precious metals companies in the top 50 has also been relatively stable over the years. With Newmont’s absorption of Newcrest now complete, the open slot was taken up by Kinross, which spent a few years in the wilderness. 

Anglogold Ashanti was just edged out by Jiangxi Copper for position number 50 on the last trading days of 2023, but based on its performance so far in 2024 the London-listed company is already back among the top tier. Indeed Anglogold is the only major gold player in the black year to date.

Silver has not been able to ride gold’s coattails and the top 50 has not had a silver specialist for a few years after Fresnillo dropped out (now at #61) and while Pan American Silver has come close in recent years at the end of last year it made it to #58 only. 

The exit of platinum and palladium majors like Sibanye Stillwater and Impala Platinum, now both valued at less than $4 billion, made space for Royal Gold to reenter at 47 at the end of last year, up from 57th in 2022. 

After a dismal 2023, the sole remaining PGM specialist Anglo American Platinum looks likely to lose more ground this quarter as palladium and platinum prices continue to slide into the new year.

Not too tough at the top 

London-listed Anglo American has had a rough year in part due to its exposure to platinum group metals and control of AngloPlat, and is now valued at $30 billion after peaking at $70 billion in March 2021.  

Were it not for the London-listed company’s iron ore operations, the 40%-plus slump in share value may have been deeper. Rumours that Glencore may be sniffing around now that the Swiss behemoth’s bid for all of Teck Resources has soured is also keeping Anglo from falling further down the rankings .  

Investors in Anglo, with a history going back more than a hundred years on the South African gold and diamond fields, have had a particularly wild ride over the last few years. In January 2016, Anglo’s market cap fell below $5 billion after it came close to suffocating under a pile of debt.  

Against expectations, iron ore seems to be holding above $120 a tonne, Chinese property bankruptcies and Beijing’s tepid stimulus response notwithstanding. 

Iron ore’s resilience despite Chinese troubles has also kept the share prices of the other diversified majors, which make their fattest profits from the steelmaking ingredient, from skidding. 

The top 10 mining companies have been able to keep their share of the total above 50% for a few years now. Not quite the magnificent seven, but size does matter in mining, particularly when access to capital is no longer a headache but a migraine. 

Expectations of another active year of M&A in the sector is likely to make the Top 50 top-heavier, especially now that it’s painfully obvious just how one-commodity companies like the lithium stocks can so easily be derailed. Coal miners’ strong 2023 suggests there are still exceptional minerals that prove the rule.   

Lithium losers 

After defying gravity early on, the combined losses for lithium miners in the top 50 climbed to nearly $30 billion in market cap over the 12 month period. Four counters occupy the worst performance table for 2023. 

The M&A drama surrounding Liontown, Albermarle and Hancock Prospecting turned out to be a soap opera and Chile’s move to take control of its lithium industry now appears far less consequential than feared.

Despite the precipitous decline in lithium prices in 2023, after hitting all time highs above $80,000 a tonne in November 2022, none of the battery metal miners’ stock performance was dire enough to drop out of the Top 50.

The merger of Livent and Allkem to form Arcadium Lithium could in fact up lithium mining’s representation in the ranking to seven should Pilbara Minerals’ January bleeding be stanched. But with lithium prices far from stabilizing, the battery metal’s presence in the top 50 may fade further. 

Pilbara Minerals, which unlike its peers was still able to show share price gains last year,  joined the Top 50 last year, bringing the number of companies based in the Western Australia capital to five, surpassing the tally of Vancouver, BC as the top home base in the ranking. 

With the exit of First Quantum, three mining companies in the top 50 call Vancouver home while the return of Kinross saw the ranks of Toronto-headquartered miners move back up to four.  

Nuclear options

Uranium prices more than doubled during 2023 and recently hit triple digits for the first time in 16 years. The breakthrough for the nuclear fuel comes after a decade in the doldrums following the Fukushima disaster in Japan.

Canada’s Cameco made the best quarterly performer list once again in Q4 and after doubling in market worth in 2023.  The Saskatoon-based company now sits at no 23 in the ranking after jumping 22 places since end-2022.    

The value of shares in Kazatomprom, the world number one uranium producer, topped $10 billion at the end of 2023, placing it at position 38.  Until last year the state-owned Kazakh company was outside earshot of the Top 50 since its dual-listing in London and Astana in 2018.  

None of the smaller uranium companies are likely to pierce the top 50 by themselves, but combinations among the rank and file may edge in when countries aiming to ditch fossil fuels stop thinking they can have their yellowcake and eat it too.

*NOTES:

Source: MINING.COM, Morningstar, GoogleFinance, company reports. Trading data from primary-listed exchange at December 28 2023 to January 2, 2024 where applicable, currency cross-rates January 2, 2024. 

Percentage change based on US$ market cap difference, not share price change in local currency.

As with any ranking, criteria for inclusion are contentious. We decided to exclude unlisted and state-owned enterprises at the outset due to a lack of information. That, of course, excludes giants like Chile’s Codelco, Uzbekistan’s Navoi Mining, which owns the world’s largest gold mine, Eurochem, a major potash firm, and a number of entities in China and developing countries around the world.

Another central criterion was the depth of involvement in the industry before an enterprise can rightfully be called a mining company.

For instance, should smelter companies or commodity traders that own minority stakes in mining assets be included, especially if these investments have no operational component or warrant a seat on the board?

This is a common structure in Asia and excluding these types of companies removed well-known names like Japan’s Marubeni and Mitsui, Korea Zinc and Chile’s Copec. 

Levels of operational or strategic involvement and size of shareholding were other central considerations. Do streaming and royalty companies that receive metals from mining operations without shareholding qualify or are they just specialised financing vehicles? We included Franco Nevada, Royal Gold and Wheaton Precious Metals on the basis of their deep involvement in the industry.

Vertically integrated concerns like Alcoa and energy companies such as Shenhua Energy or Bayan Resources where power, ports and railways make up a large portion of revenues pose a problem. The revenue mix also tends to change alongside volatile coal prices. Same goes for battery makers like CATL which is increasingly moving upstream, but where mining still makes up a small portion of its valuation.  

Another consideration is diversified companies such as Anglo American with separately listed majority-owned subsidiaries. We’ve included Angloplat in the ranking but excluded Kumba Iron Ore in which Anglo has a 70% stake to avoid double counting. Similarly we excluded Hindustan Zinc which is listed separately but majority owned by Vedanta.

Many steelmakers own and often operate iron ore and other metal mines, but in the interest of balance and diversity we excluded the steel industry, and with that many companies that have substantial mining assets including giants like ArcelorMittal, Magnitogorsk, Ternium, Baosteel and many others.

Head office refers to operational headquarters wherever applicable, for example BHP and Rio Tinto are shown as Melbourne, Australia, but Antofagasta is the exception that proves the rule. We consider the company’s HQ to be in London, where it has been listed since the late 1800s.

Please let us know of any errors, omissions, deletions or additions to the ranking or suggest a different methodology.

Polymetal is seeking to sell its Russian assets, which were put under US sanctions in 2023 in response to Moscow sending troops into Ukraine in February 2022. In August 2023, the company re-domiciled to Kazakhstan from Jersey and listed on the Central Asian nation’s Astana International Exchange (AIX).

Nesis said in August that Polymetal planned to sell the Russian business in a process that could take six to nine months. It short-listed buyers in September and said both the price and timing of the deal would be impacted by Moscow’s exchange rate-linked export duties and currency controls.

Russian and Chinese companies were among interested buyers, but no names were disclosed.

Nesis on Wednesday confirmed that the company’s new, largest shareholder, a consortium from Oman, considered the sale of the Russian business an “absolute strategic priority”.

Polymetal said on Monday investment company ICT Holding, owned by Russian businessman and Vitaly’s older brother Alexander Nesis, had sold its 23.9% stake in Polymetal to a consortium led by the Omani government.

Vitaly Nesis said it was a coincidence that the ICT stake sale has happened so close to the Russian asset sale, but that the shareholder adjustment was needed before the Russian business could be sold.

“In Russia now, in order to effectively exercise corporate ownership rights, you have to live in Russia”, Nesis told Reuters.

Nesis said the company was determined to put the Russian asset sale to a shareholder vote by the end of February and close the deal by the end of March.

“We have one potential buyer, it’s a Russian buyer,” Nesis said.

“We have to finalize the sale, then have a shareholders’ consultation,” Nesis said, when asked about dividends. “We need to find out what BlackRock thinks, what the Oman fund thinks.”

“I will be asking shareholders a simple question – should we pay dividends, or should we invest in scaling up the company to return it to LSE.”

The Kazakh company’s new strategy will be presented in May 2024, he added.

(By Anastasia Lyrchikova and Alexander Marrow; Editing by David Evans)