The Mining and Exploration News in Mexico: Highlights on the Third Week of January 2024

During the 3rd week of the year (January 15th to January 21st, 2024), companies working in Mexico posted at least 25 news releases. Three companies reported exploration advances on their properties, eight companies released production results and one more announced it is now processing material from a third party at its installations. Two companies announced financing rounds, one paid back a fair amount of debt and made the final installment of a layback agreement. One company is arranging convertible debt financing and one other closed a debt settlement with shares and informed on debt restructuring. Three companies updated on work at its advanced properties. One company updated on 2023 work and plans for 2024, another announced a favorable resolution of issues relating to its mining claims and one more on the intention to spin its royalty company to its shareholders. ON MEXICO ISSUES, the president of the Colegio de Ingenieros de Minas, Metalurgistas y Geólogos de México informed on the detrimental aspects brought by the new mining law. ON EXPLORATION, in Sonora, Aztec Silver informed on RC drilling results from its Cervantes project. Colibri contracted an air mag survey for El Plomo in Sonora. In Oaxaca, Vortex Metals updated on work in 2023 and plans for 2024 at its Zaachila and Riqueza Marina projects. ON MINING, Orla Mining, First Majestic Silver, Bear Creek Mining, Avino Silver, Torex Gold, Pan American Silver, Argonaut Gold and Fortuna Silver reported production results for Q4 and full-year 2023. Guanajuato Silver Company is to process material from a Mexican company at its El Cubo mill. ON FINANCING, Orla Mining repaid $25 M of debt and the final $22.8 M installment of the Layback agreement to Fresnillo plc. GoldGroup Mining is to arrange a convertible debt financing for US$400 K. GR Silver is to undertake a private placement for up to $1.5 M. Regency Silver completed the first tranche of a private placement expected to raise $800 K. Luca Mining informed on the restructuring of debts with service providers and clients. ?ON RESOURCES AND DEVELOPMENT, Defiance Silver released results from drilling at San Acacio, in Zacatecas. Impact Silver informed on drill intercepts from its Plomosas mine in Chihuahua. Orla Mining confirmed gold oxide mineralization on the Fresnillo plc property and on structures channelling deep oxidation beneath the planned pit at Camino Rojo in Zacatecas. ON DEALS AND CORPORATE ISSUES, Riverside Resources updated on 2023 work and plans for 2024 on three properties in Sonora. Silver Valley announced a favorable resolution with the government on its Mexi-Can Sulphate of Potash and Lithium project in Zacatecas. Prime Mining announced a new CEO appointment. Vizsla Silver is to spin out the shares of Vizsla Silver Royalties to its shareholders. ?ON SOCIAL RESPONSIBILITY, no relevant news.

ON MEXICO ISSUES

• Raúl García Reimbert, president of the Colegio de Ingenieros de Minas, Metalurgistas y Geólogos de México, stated that according to INEGI (Mexican bureau of statistics), the services related to mining fell by 26.2% in November 2023. Mineral exploration for new projects is practically paralyzed after five years of a no-concessions policy by the actual presidential administration and last year’s mining reforms. The reform poised the SGM as the only entity to explore for new projects that later are to be auctioned, but no budget was allocated for the deed. He also added that “there is no work, staff is laid off, sales of services related to drill bits, exploration supplies, lab technicians, geologists, surveyors, etc.”? ?

ON EXPLORATION

• Vortex Metals Inc. provided a summary of 2023 achievements and unveiled its strategy for 2024. In 2023 Vortex completed environmental assessments on its Zaachila and Riqueza Marina projects in Oaxaca, which will be the basis for the reports to be submitted to SEMERNAT (Mexican environmental bureau). “At Riqueza Marina, Vortex completed extensive geological work at the Rhyolite Dome area and, on the copper-rich gossans to the east and west. A total of six trenches measuring 188 meters and yielding 117 rock chip samples were completed”. In 2024 Vortex will continue to engage with the local communities to develop a strong social license that will enable the advance in exploration and potential discovery of a new Cu-Au volcanogenic massive sulfide (VMS) belt in Oaxaca.
• Aztec Minerals Corp. released initial gold results from three reverse circulation drill holes at its Cervantes project in Sonora. The RC drill program was designed to expand the California gold mineralization in multiple directions. Highlighted drill length intervals comprise 7.6 m @ 0.274 gpt Au; 13.68 m @ 0.338 gpt Au; 30.4 m @ 1.035 gpt Au (including 1.52 m @ 13.8 gpt Au). “Aztec plans to carry out reconnaissance and channel sampling and geologic mapping of the new drill roads at California, and other targets”.
• Colibri Resource Corp. contracted Geo Digital Imaging de Mexico, S.A. de C.V. to complete a 1,373-hectare HD magnetic survey covering the main targets at El Plomo claims on its EP project in Sonora. The drone aerial survey comprises 312 line-km on 81 lines at 50-m separation and 8 tie-lines at 500-m separation. The survey characteristics are the same that were applied on the adjacent Evelyn target, therefore the blending of the two surveys is expected to be seamless.

ON MINING

• Orla Mining Ltd. provided an operational update for the fourth quarter of 2023. During the period the company mined 1.86 M tonnes of ore and 802.8 tonnes of waste, for a strip rate of 0.43, stacking 1.75 M tonnes at a rate of 18,998 tpd grading 0.73 gpt Au to produce 34,484 Oz Au. For the full year Camino Rojo produced 121,877 Oz Au. For 2024 the guidance is 110 to 120 K Oz Au production from the Camino Rojo Oxide operation, at cash cost of $625 to $725 per Oz Au and an AISC of $875 to $975 per Oz Au. Nearly half of the $23M Exploration budget in Mexico is to continue exploration activities “on the new discovery below the Camino Rojo sulphide deposit”.
• First Majestic Silver Corp. announced a total production from its mines in Mexico of 6.6 M AgEq Oz Ag for the fourth quarter of 2023. During the period the company produced 2.61 M Oz Ag, 46,585 Oz Au that add up to 10.25 M Oz Ag, 198,921 Oz Au in the year, or 26.9 M Oz AgEq. Also, during the quarter twelve rigs worked at San Dimas (Durango) and four in Santa Elena (Sonora). At La Encantada, efforts are being made to find more water sources for the plant, as an extended drought is pressing production. For 2024 First Majestic production guidance contemplates 150-167 K Oz Au, 8.6-9.6 M Oz Ag, or 21.1-23.5 M Oz AgEq. At cash cost $13.69-$14.46 per Oz AgEq and an AISC of $19.32-20.68 per Oz AgEq. The company is planning 188,500 m of drilling, with 95,000 m at San Dimas, 59,000 m at Santa Elena and 9,500 m at La Encantada (the rest out of Mexico).

• ·Bear Creek Mining Corp. released production figures for the fourth quarter of 2023. At Mercedes, in Sonora, 135,918 tonnes were processed in the period, grading 3.30 gpt Au, recovering 93.6% Au, to produce 13,478 Oz Au, 52.1 K Oz Ag, adding up to 43,860 Oz Au, 167 K Oz Ag in 2023. This quarterly production represents a 47% increase on the previous period and reflects the higher grades mined and increased working faces. Reduction of gold and silver streams of 78% were reached/obtained in the period, improving cash flow.
• Avino Silver & Gold Mines Ltd. reported Q4 and full year 2023 production results. For the full year the company produced 2.41 M Oz AgEq at its Avino mine in Durango. During the fourth quarter 143.8 K tonnes @ 56 gpt Ag, 0.45 gpt Au, 0.49% Cu were processed, recovering 87% Ag, 70% Au, 84% Ag, to produce 224.7 K Oz Ag, 1,452 Oz Au, 1.32 M Lb Cu, or 558.5 K Oz AgEq. Also, in the quarter a long-term land use agreement was signed on the neighboring La Preciosa project, the prefeasibility study (PFS) on the Oxide Tailings Project in Avino is nearing completion and the dry stacking facility has been fully operational for a year.
• Torex Gold Resources Inc. provided 2024 operational guidance and a five-year production outlook for the Morelos Complex in Guerrero, which includes the ELG Mine Complex and Media Luna project. For 2024 the company set a guidance of 410 to 460 K Oz AuEq with total cash cost of $900 to $950 per Oz AuEq and an AISC of $1,130 to $1,190 per Oz AuEq. “The mine plan for 2024 includes a full year of production scheduled from ELG, with the open pits starting to wind down mid-year and ELG Underground maintaining consistent levels of production throughout the year. Ore production from Media Luna starts inQ2 and continues to ramp up thereafter”. The five-year production outlook envisages 410 to 460 K Oz AuEq (2024), 425 to 475 K Oz AuEq (2025), 425 to 475 K Oz AuEq (2026), 450 to 500 K Oz AuEq (2027) and 350 to 400 K Oz AuEq (2028). The drilling budget include $15 M for the Media Luna Cluster, $12 M for ELG Underground and $3 M for the Morelos district. Torex has hedged 158 K Oz Au for the year at an average price of $1,972 per Oz.
• Guanajuato Silver Company Ltd. commenced a relationship with a Mexican mining company “to process a portion of its surface inventory of mineralized material” at Guanajuato Silver’s El Cubo mines complex in Guanajuato. This agreement will utilize excess capacity of El Cubo mill with material that has demonstrated compatible with the processing circuit through comprehensive metallurgical testing.
• Pan American Silver Corp. reported preliminary production results for Q4 and full-year 2023, including figures from its Mexican operations. At La Colorada, in Zacatecas, 806 K Oz Ag, 400 Oz Au were produced in Q4 2023, completing 4.4 M Oz Ag, 2,300 Oz Au in the year. At Dolores, in Chihuahua, 477 K Oz Ag, 25,400 Oz Au were produced in Q4 to complete 2.2 M Oz Ag, 107,100 Oz Au in the year. For 2024 the production forecast is of 5.3 to 5.7 M Oz Ag, 2,000 Oz Au at La Colorada, at cash cost $11.70 to $14.10 per Oz AgEq and an AISC of $16.00 to $18.50 per Oz AgEq. For Dolores the guidance is of 1.9 to 2.2 M Oz Ag, 65,000 to 75,000 Oz Au at $1,165 to $1,260 per Oz AuEq and an AISC of $1,475 to 1,575 Oz AuEq. Dolores. At La Colorada a 30% improvement in production is expected upon completion of a new ventilation system by mid 2024. At Dolores mining and staking on the heap are expected to conclude on Q3 2024, and then enter into the reclamation phase, with residual leaching for a few years.
• Argonaut Gold Inc. announced fourth quarter and full year 2023 production results, including figures from its Mexican operations. The company has three mining units: La Colorada in Sonora, and El Castillo and San Agustín in Durango, where 90,247 Oz Au were produced in the year.

• Fortuna Silver Mines Inc.? reported production results for the fourth quarter and full year 2023, including figures from its operations in Mexico. At the San José mine in Oaxaca, 241 K tonnes were milled at an average rate of 2,678 tpd, averaging 145 gpt Ag, 0.91 gpt Au, recovering 90.8% Ag, 89.6% Au, to produce 1.02 M Oz Ag, 6,345 Oz Au during the Q4. For the full year, San José produced 4.66 M Oz Ag, 28,559 Oz Au. For 2024 the guidance is to produce 3.1 to 3.6 M Oz Ag, 19 to 23 K Oz Au at cash cost $20.3 to $22.3 per Oz AgEq and an AISC of $22.8 to $24.0 per Oz AgEq. Driven by high costs and declining grade, the company is scheduled to exhaust mineral reserves by the end of 2024 and “to review and update a multiyear progressive mine closure and monitoring plan” with a current budget of $27 M.

ON FINANCING

• Orla Mining Ltd. repaid $25 M towards its revolving credit facility, reducing the balance to $88.4 M. Orla also paid the final $22.8 M installment to Fresnillo plc as part of the layback agreement. At December 31, 2023 Orla had a cash position of $96.6 M and a total debt position of $88.4 M, resulting in a net cash position of $8.2 M (Camino Rojo, Zacatecas).
• Silver Storm Mining Ltd. is to make a presentation at the 2024 Vancouver Resource Investor Conference on January 21, 2024 (La Parrilla, Durango).
• GoldGroup Mining Inc. is in the process of arranging convertible debt financing of up to US$400 K of which US$100 K have already been received. “The Convertible Debts will be unsecured, bear interest at 12% per annum, will be repayable 18 (eighteen) months post-closing and will be convertible into common shares of the Company at CAD $0.10 per share at a fixed FX rate of 0.76 USD to CAD at the election of the lender(s)” (Cerro Prieto, Sonora).
• GR Silver Mining Ltd. proposes to undertake a non-brokered private placement of up to $1.5 M (Plomosas, Sinaloa).
• Regency Silver Corp. completed the first tranche of $622 K on a previously announced non-brokered private placement of $800 K. “The balance of the private placement is expected to close shortly” (Dios Padre, Sonora).
• Luca Mining Corp. received a conditional TSX Venture Exchange approval and closed a debt restructuring and debt transaction previously announced. The company closed its debt settlement with Latapi Consultores S.A. de C.V., issuing 17.75 M shares to settle an outstanding debt of CAD$11 M. Luca Mining also completed its debt restructuring with Trafigura Mexico S.A. de C.V. and its affiliate Union Holdings Ltd., converting a US$5.8 M outstanding loan into a non-interest three-year term convertible debenture. Trafigura has also advanced an additional US$2.5 M loan to assist the company in completing the mine optimization program to deliver separate clean copper, zinc and lead concentrates to Trafigura with higher grades and recoveries (Campo Morado, Guerrero).

ON RESOURCES AND DEVELOPMENT

• Defiance Silver Corp. released results from the 2023 drilling campaign at its San Acacio property in Zacatecas. The drilling demonstrated in-situ vein material remains in place at shallow levels of the mine. Highlighted core length intervals comprise 12.82 m @ 0.36 gpt Au, 223 gpt Ag, 0.2% Pb, 0.4% Zn; 32.32 m @ 0.20 gpt Au, 120 gpt Ag, 0.06% Cu, 0.4% Pb, 1.4% Zn (including 18.91 m @ 0.18 gpt Au, 166 gpt Ag, 0.1% Pb, 0.5% Zn and 6.39 m @ 0.18 gpt Au, 81 gpt Ag, 0.26% Cu, 1.7% Pb, 4.6% Zn); 33.76 m @ 0.31 gpt Au, 105 gpt Ag, 0.07% Cu, 1.0% Pb, 1.8% Zn (including 15.02 m @ 0.60 gpt Au, 162 gpt Ag, 0.14% Cu, 2.1% Pb, 2.5% Zn, which includes 4.47 m @ 0.75 gpt Au, 265 gpt Ag, 0.31% Cu, 5.1% Pb, 3.3% Zn). According to Defiance, the increasing copper grades and the presence of semi-massive to massive sulfide mineralization near surface is encouraging, as Capstone Mining is operating the Cozamin copper mine approximately 3 km away.
• Impact Silver Corp. announced results from drilling at its Plomosas mine in Chihuahua. Initial drill results from the Tres Amigos section of the mine confirmed high-grade mineralization in the Juarez horizon, near accessible mine workings. Highlighted true width intervals comprise 1.29 m @ 18.2% Zn; 5.70 m @ 23 gpt Ag, 5.3% Pb, 7.9% Zn; 1.50 m @ 64 gpt Ag, 3.1% Pb, 11.9% Zn; 3.77 m @ 19 gpt Ag, 0.8% Pb, 5.0% Zn; 2.40 m @ 17 gpt Ag, 0.4% Pb, 6.0% Zn; 1.50 m @ 12 gpt Ag, 12.4% Pb, 3.3% Zn; 9.24 m @ 6 gpt Ag, 0.4% Pb, 4.0% Zn (including 1.98 m @ 13 gpt Ag, 1.4% Pb, 9.1% Zn, and 1.85m @ 13 gpt Ag, 0.7% Pb, 8.7% Zn); 2.70 m @ 35 gpt Ag, 9.2% Pb, 11.1% Zn; 6.90 m @ 28 gpt Ag, 5.4% Pb, 10.2% Zn; 3.60 m @ 50 gpt Ag, 2.1% Pb, 10.9% Zn.
• Orla Mining Ltd. completed 6,500 m of diamond drilling at its Camino Rojo Oxide mine in Zacatecas. This near-pit exploration included 2,500 m to confirm oxide mineralization on the Fresnillo plc property (Layback area) north of the pit and 4,000 m of drilling targeting structures controlling deeper levels of oxidation beyond the currently designed pit. Highlighted core length intervals comprise 76 m @ 0.85 gpt Au (including 28 m @ 1.28 gpt Au and 10.27 m @ 1.27 gpt Au); 67 m @ 0.48 gpt Au; 73.5 m @ 0.37 gpt Au; 21 m @ 1.09 gpt Au; 18.7 m @ 1.06 gpt Au (including 4 m @ 4.06 gpt Au); 22.5 m @ 0.92 gpt Au; 67.1 m @ 1.16 gpt Au; 65.1 m @ 0.86 gpt Au; 63 m @ 0.63 gpt Au; 41 m @ 0.49 gpt Au; 21 m @ 0.87 gpt Au.

ON DEALS AND CORPORATE ISSUES

• Riverside Resources Inc. updated on 2023 work and its outlook for 2024. In Mexico the company is preparing drilling permits to maintain good standing of the properties located in Sonora. On the Ariel porphyry copper property, consolidation of land and proper titling are positioning the company for potential JV’s. At the Union mine, assays of up to 1 Oz Au and 30% of Zn highlight the potential for further expansion. At Cecilia, a large dome complex has already yielded significant intercepts on previous drilling.
• Silver Valley Metals Corp. announced a favorable resolution of issues relating to its Mexi-Can sulphate of potash and lithium project in Zacatecas. The company reported a favorable ruling regarding two amparos (constitutional appeals) on the effect of the New Mining Law. Also, the government operator of lithium mining, Litio Mx, declined to participate on the development of the Mexi-Can project and Silver Valley is poised to recommence exploration activities.
• Prime Mining Corp. announced that CEO Daniel Kunz is retiring and Mr. Scott Hicks, EVP, will succeed him (Los Reyes, Sinaloa).
• Vizsla Silver Corp. intends to spin out the shares of Vizsla Silver Royalties Corp., a wholly owned subsidiary of Vizsla Silver, to the company’s shareholders. The royalty consists of a 2.0% net smelter return (NSR) on certain unencumbered concessions on the Panuco project in Sinaloa, and a 0.5% NSR on certain encumbered concessions on the same project which have a pre-existing 3.0% NSR. “Pursuant to the Spinout, common shares of Vizsla Royalties would be distributed to shareholders of Vizsla Silver. Vizsla Silver is expected to hold approximately a 49% ownership interest in Vizsla Royalties, with the remaining shares of Vizsla Royalties being distributed to shareholders of Vizsla Silver on a pro-rata basis at a time to be determined by the board of directors of Vizsla Silver”.
• Alamos Gold Inc. is to release fourth quarter and full-year 2023 results after February 21, 2024 (Mulatos, Sonora).

ON SOCIAL RESPONSIBILITY

• No Relevant News.

On the image below: Specularite-quartz breccia vein on a project of the Sonoran Desert. Picture by Jorge Cirett.