Mexico's silver miners poised for a rebound

By
Friday, March 10, 2017

Silver production of the main miners of the precious metal in Mexico will rebound this year after falling in 2016.

The country's top 10 silver miners will produce 153Moz of the metal this year, according to guidance and BNamericas estimates.

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The figure represents a 7.7% improvement from 142Moz in 2016, down from 148Moz the previous year.

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Mexico is the world's biggest silver producer. Total output was 149Moz last year, according to data from statistics agency Inegi, down 6.3% from 2015.

TOP 10

1. Industrias Peñoles, 2016 output: 58.1Moz

The Mexican miner was responsible for around 40% of the combined output of the top 10, with production up from 54.5Moz in 2015.

The bulk of 2016 production (50.3Moz) was from mines operated by precious metals subsidiary Fresnillo, up 7.1% helped by production from San Julián and higher silver grades at the Ciénega mine.

BNamericas estimates further growth in 2017, to 67.3Moz, based on Fresnillo's midpoint guidance of 59.5Moz and assuming flat output at Peñoles-operated assets (the company does not issue guidance).

2. Goldcorp, 17.9Moz

The Canadian miner saw silver output slump at its Peñasquito operation in Mexico, from 25.9Moz, on lower grades.

BNamericas estimates an 8.7% drop in 2017 to 16.3Moz, based on the company's forecast of 8.7% lower gold output of 410,000oz (Goldcorp does not issue silver guidance by mine).

3. Southern Copper, 12.4Moz

US-based Southern saw production rise from 9.41Moz at its Mexican copper mines, mainly as a result of higher output at the expanded Buenavista del Cobre operation.

Total silver production is forecast to rise 2.65% to 16.6Moz in 2017. A similar increase in Mexico would result in output of 12.7Moz.

4. First Majestic, 11.8Moz

Output increased from 11.1Moz at the company's Mexican silver mines, helped by the addition of the Santa Elena operation, with midpoint guidance for 2017 at 11.7Moz.

5. Pan American Silver, 11.5Moz

The Canadian miner's Mexican output fell from 12.5Moz, due to lower production from the ageing Alamo Dorado mine.

The company expects to produce 11.2Moz in Mexico in 2017, on further falls at Alamo Dorado, partly offset by increases at La Colorada and Dolores, both of which are undergoing expansion.

6. Minera Frisco, 9.04Moz

The Mexican miner, controlled by magnate Carlos Slim, saw production slip from 9.33Moz. BNamericas assumes flat silver production for 2017. The company does not issue guidance.

7. Fortuna Silver, 6.12Moz

Production at Fortuna's San José mine increased from 4.93Moz in 2015, with a further rise to 7.1Moz forecast for 2017, following an expansion.

8. Endeavour Silver, 5.44Moz

The company saw output slip from 7.18Moz at its three Mexican mines, with midpoint 2017 guidance at 5.45Moz.

9. Primero Mining, 5.3Moz

The firm saw silver output fall from 8.3Moz at San Dimas following a string of challenges at the Durango state gold-silver mine. BNamericas estimates flat production for 2017. Guidance has been delayed while the company seeks to resolve a strike.

10. Coeur Mining, 4.44Moz

Silver production at the Palmarejo mine (pictured) fell from 5.15Moz. The company is transitioning to underground from open pit operations, with output forecast to rise to 6.75Moz this year.