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COVID-19 wipes 321koz off Mexican gold output

Bnamericas Published: Wednesday, August 12, 2020
COVID-19 wipes 321koz off Mexican gold output

The COVID-19 pandemic will wipe more than 300,000oz off Mexico’s gold production this year, with lockdown suspensions weighing on operations.

Updated mid-point guidance from 10 of the country’s biggest gold miners shows a combined reduction of 321,500oz, according to data compiled by BNamericas.

The figure represents 9.3% of the 3.46Moz production originally forecast for 2020, based on guidance and BNamericas estimates for 20 companies in March.

The true extent of the blow is likely to be larger as a number of mining companies have yet to update forecasts.

The bulk of Mexican mines were halted in early April to comply with lockdown measures.

Operations restarted around the end of May after the sector was deemed essential.

Mexico produced 3,938kg (126,607oz) of gold in May, down 37.5% on the same month last year, according to statistics agency Inegi

BIGGEST GUIDANCE CUTS

1. Equinox Gold, Los Filos: 80,000oz reduction

The COVID-19 suspension impacted Equinox’s Los Filos mine in two ways, hitting production and delaying access to higher-grade ore that was in the mine plan for late 2020.

As a result, Equinox reduced guidance to 90,000-110,000oz from 170,000-190,000oz.

2. Newmont, Peñasquito mine: 65,000oz reduction

Newmont’s Mexican mine was suspended on April 12, with milling activities restarting in May and production in June.

As a result, the company lowered guidance to 510,000oz gold from 575,000oz originally.

3. Fresnillo: 57,500oz reduction

The Mexican miner was hit by suspensions at its Herradura and Noche Buena open pit gold operations, while production continued at its underground primary silver mines.

The company now expects to produce 785,000-815,000oz gold in 2020, down from 815,000-900,000oz originally – a drop of around 6.7%.

4. Torex Gold, El Limón-Guajes mine: 45,000oz reduction

Torex issued revised guidance for its El Limón-Guajes mine on August 5, to reflect a COVID-19 suspension in Q2.

The company now expects to produce 390,000-420,000oz gold this year, compared with original forecasts of 420,000-480,000oz.

5. Pan American Silver, Mexican mines: 37,500oz reduction

Following temporary suspensions, Pan American reduced gold guidance for its Dolores mine to 99,000-104,000oz from 133,500-143,500oz, and by 500oz to 4,000oz at the La Colorada primary silver asset.

MARGINAL CUTS

6. Argonaut Gold, Mexican mines: 13,500oz reduction

Argonaut has seen only a marginal impact on production as a result of the pandemic, as residual leaching continued at its operations.

Production at the El Castillo, San Agustín and La Colorada mines is expected to be 160,000-173,000oz, down from 175,000-185,000oz (figures are on a gold equivalent basis and include a small quantity of silver).

7. First Majestic Silver: 10,500oz reduction

The Vancouver-based miner now expects 2020 gold output of 75,000-80,000oz at its San Dimas mine, down from 81,000-90,000oz, and 31,000-33,000oz at Santa Elena, down from 33,000-36,000oz.

8. Alamos Gold, Mulatos mine: 10,000oz reduction

Alamos now expects Mulatos to produce 140,000-150,000oz gold in 2020, a drop of just 10,000oz, as recovery from leach pads continued during the lockdown.

9. Coeur Mining, Palmarejo mine: 2,500oz reduction

US-based Coeur expects to produce 95,000-105,000oz gold at Palmarejo in 2020, after lowering the upper end of guidance by 5,000oz.

NO IMPACT

10. Agnico Eagle Mines: Guidance increased

Agnico has upped companywide guidance to 1.68-1.73Moz, from 1.63-1.73Moz, but individual forecasts for the company’s trio of Mexican mines were not reported in its Q2 earnings release.

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