Mexico , Peru , Argentina and Bolivia

Political, social challenges holding back LatAm’s 3.3Boz silver giants

Bnamericas Published: Thursday, October 20, 2022
Political, social challenges holding back LatAm’s 3.3Boz silver giants

Political, regulatory and social challenges are holding back development at a string of Latin America’s biggest silver deposits.

But companies are forging ahead at other major silver projects, hitting milestones in terms of exploration, development, studies and acquisitions.

Latin America hosts at least eight primary silver deposits containing over 200Moz of the metal, which have yet to reach commercial production, with combined resources and reserves of around 3.36Boz.

By comparison, global silver mine production was 24,000t (772Moz) last year, according to the US Geological Survey.

The eight projects have the potential to cement the region's dominance in the silver space.

Mexico is the biggest silver producer globally, with output of 5,600t in 2021, with Peru third at 3,000t. Chile, Bolivia and Argentina all rank in the top 10. 

While regulatory obstacles and community conflicts are key stumbling blocks for many assets, economic viability is the chief challenge at others, which firms are hoping to overcome in part through a focus on high-grade portions of major deposits.

This viability has been boosted through higher silver prices in recent years, with the metal trading mainly in the US$22-28/oz range in the 24 months to June 2022, compared to US$14-19/oz in the preceding five years.

While prices have slipped to around US$19/oz in recent weeks, producers remain bullish on the outlook.

“With governments around the world pushing electric cars … the automotive sector is going to have to produce a lot more electric cars, so that’s going to consume a lot of silver,” First Majestic Silver CEO Keith Neumeyer said last month.

“It’s just up for silver prices going forward as far as I’m concerned.”


Pan American Silver’s Navidad project in Argentina is the biggest example of a silver project hamstrung by regulatory obstacles.

The asset, which has total resources containing 752Moz silver, has failed to advance due to a 2003 law passed by Chubut province banning open pit mining and cyanide use.

The provincial government was forced to reverse a decision to allow open pit mining in certain areas in December, following protests.

“We plan to continue with … maintenance requirements and remain committed to Navidad and to contributing to the positive economic and social development of Chubut, should a favorable legislative framework be adopted,” Pan American said on its website.

Pan American’s Escobal mine in Guatemala (pictured) has also been on hold since 2017, due to a license suspension and roadblock.

Authorities are advancing a court-ordered consultation with indigenous communities at the mine, which previously produced around 20Moz/y silver, making it one of the largest producers in the region.

Reserves and resources are put at around 385Moz silver.

But Scotia Capital analyst Trevor Turnbull told BNamericas this month that he does not expect operations to restart until 2025.

Social and political challenges in Peru have also hampered advances at Bear Creek Mining’s US$579mn Corani primary silver asset.

CEO Tony Hawkshaw told BNamericas earlier this year that he is adopting a wait-and-see attitude on the country due to a lack of clarity on the political direction and rising social conflict.

The company is focusing on raising output at its recently acquired Mercedes gold mine in Mexico. Corani hosts about 360Moz silver across all categories of resources and reserves.

The Malku Khota project – with around 360Moz of silver resources – has yet to enter production after being expropriated by the Bolivian government in 2012.

State miner Comibol, which now owns the asset, signed an agreement in June that could see local company Empresa Montecristo conduct further exploration and advance the asset toward production, with Comibol retaining a 55% share of profits.


Companies are making headway at a number of large silver deposits in Mexico.

Fresnillo and 56:44 JV partner MAG Silver are on the cusp of commissioning the US$440mn Juanicipio silver-gold project, which has been held back by delays by state power utility CFE in connecting the operation to grid power.

A 2017 PEA showed total resources of 267Moz, but the figure does not include the results of drilling since then, or production from ore trucked to other Fresnillo assets for processing.

The Pitarrilla project, which hosts a historical resource of 525Moz silver, was acquired by Endeavour Silver earlier this year, after failing to advance materially for a number of years under previous owners SSR Mining.

Endeavour CEO Dan Dickson told BNamericas last month that the company aims to establish a current resource estimate and evaluate a potential underground operation focused on high-grade zones.

“We believe that scenario is likely to occur based on metals prices and the current political climate in Mexico,” he said.

“It’s a great mining jurisdiction but underground mining is more favorably viewed than open-pit mining, not just in Mexico but globally.”

Discovery Silver is also pushing ahead at its Cordero project, which hosts total resources of 471Moz silver.

The company, which is focusing on higher-grade portions of the resource, plans to release an updated resource estimate and pre-feasibility study by end-2022.

Mexico also hosts one notable addition to the list of 200Moz-plus silver resource assets, at Pan American’s La Colorada Skarn discovery, close to its La Colorada mine.

The asset hosts 227Moz silver in resources, according to a September estimate, a figure which is set to rise following further recent exploration successes.

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