Mexico’s Mining Industry

34 Negocios ProMéxico Negocios ProMéxico 35
Treasure
of the Sierra
____
by graeme stewart
photos courtesy of torex gold
mexiCo has a 500-yeaR old mininG
TRadiTion, fRom The ConquisTadoRs
To pResenT day invesToRs. The
mineRal-RiCh naTion has WelComed
pRospeCToRs of CoppeR, zinC and,
espeCially, silveR. BuT iT is Gold,
ThaT mosT pReCious of meTals,
ThaT has CapTuRed The imaGinaTion
of a Canadian Gold mininG
Company, CuRRenTly dRillinG in The
mounTains of GueRReRo.
Torex Gold, the Toronto-based mining
company, is currently drilling for gold
in the Sierra Madre del Sur in the state
of Guerrero, and by doing so is helping
to maintain a 500-year-old tradition of mining for
precious metals in Mexico.
The Conquistadors, followed by the colonials of
New Spain, and most recently the Mexicans themselves,
built hundreds of mines, silver mines in
particular, throughout the country, making household
names of the likes of Taxco, Zacatecas and
Guanajuato.
But it is gold that has attracted Torex Gold to
the mountains of the south. The company expects
all financing for what has become known as the
Morelos Gold Project to be in place by the summer
and admits to being more than a little excited by its
future prospects in Mexico.
President and CEO Fred Stanford told Negocios
that the company is currently in the second round of
financing talks with 10 banks regarding the project.
Torex is expected to require 675 million usd to
bring the project to full commercial production,
with 383 million usd already raised in a bought deal
that closed in October 2012.
The financing talks had been delayed as a result
of Hurricane Sandy, Stanford says, but added there
was “lots of interest,” with each bank looking to
invest about 50 million usd.
“Once initial term sheets are signed, the banks will
do their due diligence. We expect this whole process to
be finalized in the first half of this year,” says Stanford.
Exploration work at Morelos is continuing, Stanford
adds, including at three magnetic anomalies at the south
of the Balsas River section of the 29,000-hectare property.
The company has hired the Chief Operating Officer
(COO), the general manager, the mill and mine managers
and appointed a contractor to oversee construction
of the project, Stanford states.
Late last year, Gabriela Sánchez, VP of investor relations,
told BNamericas construction is expected to
begin in mid-2013. That was confirmed by Stanford:
“The strategy has always been to deliver on our internal
goal of 5 million ounces of gold north of the Balsas River
and to find new deposits south of the river. We are also
encouraged by the support of the ejidos, the community,
and all levels of government, as we work together toward
the objective of developing a world-class mine that will
benefit all stakeholders involved.”
Indeed, Stanford is very impressed with the level
of support from federal and local government and the
clarity of Mexican mining laws and regulations. “To
have such clear policies and procedures from national
and local government is a great boon. It has helped us
tremendously,” he affirms.
He is also impressed with the quality of Mexico’s
universities specializing in engineering and geology
and promised that in the future, Torex Gold will have
close links to universities producing such high caliber
graduates.
The Morelos Gold Project is located 180 kilometers
southwest of Mexico City in the state of Guerrero. The
project, spread over 29,000 hectares, includes the development
of Los Guajes and El Limón gold deposits
alongside additional prospects. The project is owned by
Torex Gold Resources (earlier Gleichen Resources) and
is currently in the advanced stage of development. Torex
began drilling at the project site in 2010, after acquiring
the asset from Teck in 2009.
The project was developed in a two-phase work program.
Phase one included exploration, infill and step-out
drilling, reviews relating to resource model, additional
recommended metallurgical tests and a mineral resources
update at a cost of approximately 15 million usd
per year. Phase two included a feasibility study with a
cost of approximately 10 million usd.
Exploration at the project area has been carried out
since 1998. The activities included local and detail mapping,
sampling of rock, silt and soil, trenching, drilling
including reverse circulation (RC) and diamond, ground
induced polarization (IP), geophysical surveys, mineralization
characterization studies and sample testing.
Torex Gold Resources Inc. is a well-funded, growthoriented
Canadian mining company engaged in the exploration
and development of precious metal resources
with a focus on gold.
The Morelos Gold Project is only a four hour drive
from Mexico City on paved roads. It is easily accessible
and located near established centers of supply for
materials and workers. Power for any mining operation
would be available from an 115kV line that crosses over
the Project and water for process and potable use could
be sourced from nearby springs. The Project’s current
NI 43-101 mineral resource estimate stands at 4.8 million
ounces of gold in the measured and indicated category
plus an additional 600,000 ounces of gold in the
inferred category.
With a management team in place, 100% ownership
of a solid gold project with superb exploration upside
and a strong balance sheet, the company is committed to
significantly increase the current resource base through
an aggressive exploration program, while simultaneously
advancing the Morelos Gold Project into production.
Stanford states: “The company’s focus on drilling
the magnetic anomalies in the Media Luna area has
been very successful in discovering both high-grade
gold intersections and thick intervals of potentially economic
gold mineralization. The two magnetic anomalies
drilled to date, which cover approximately 391 hectares,
appear to represent very large gold mineralizing systems
that warrant extensive additional drilling to define the
size and grade of the gold zones. The drilling within the
magnetic anomalies has resulted in the discovery of
local areas containing very high-grade gold along with
significant copper and silver values.”
It may be an old story, familiar to Mexicans over the past
five centuries, but the Mexican tradition of mining for precious
metals continues well into the 21st century. n
www.torexgold.com