Spotlight: Mexico's top copper projects

Mining companies are making strides at a string of copper projects in Mexico, ranging from small, pilot operations to multi-billion dollar investments.

BNamericas takes a look at five of the country's most promising red metal projects with the potential to start operations and boost Mexico's production over the coming six years.

Mexico was the ninth biggest copper producer globally last year, with output at 760,000t, up from 742,000t the previous year, according to the US Geological Survey.

SAN NICOLÁS

Teck Resources plans to finish a prefeasibility study and submit an environmental impact study at San Nicolás in early 2020, the company said in its Q2 earnings report.

But a sale of the Zacatecas state project is also being considered.

Teck CEO Don Lindsay said in April that the company has entered discussions with potential interested parties, and is considering options including a cash sale or bringing a new partner on board – but stressed that there is no rush to reach a deal.

Measured resources at end-2018 were 32.4Mt at grades of 1.27% copper, 1.9% zinc, 0.46g/t gold and 26.0g/t silver, along with 76.5Mt in the indicated category (1.12% copper, 1.5% zinc, 0.42g/t gold and 23.8g/t silver) and a small inferred resource (4.7Mt).

A 2002 feasibility study – while not current – gives an idea of the project's potential scale, indicating an open pit operation producing 230,000t/y copper concentrates and 190,000t/y zinc concentrates, with capex estimated at US$246mn.

Teck has a 100% stake in San Nicolás after acquiring Goldcorp's 21% interest for US$50mn in 2017.

PILARES

Southern Copper's most advanced primary copper project is expected to deliver 35,000t/y copper, with first production expected in 2021.

Capex for the open pit project is expected at US$159mn, with ore transported to Southern’s La Caridad mine for processing.

Average grades are 0.78% copper, compared to 0.34% at La Caridad.

"Environmental permits have been obtained and additional land is being acquired," Southern said in its Q2 report.

SAMALAYUCA (GLORIA)

VVC Exploration announced a string of advances at its Samalayuca project in Chihuahua state, culminating in board approval for a pilot mine.

The company secured environmental and land use permits in July and announced an updated resource estimate in March, containing 60Mlb (27,216t) copper in the indicated category and 90Mlb inferred.

The pilot mine will target the Gloria zones of the Kaity Claim at the asset.

VVC plans to mine oxide copper resources in an open pit, heap leach operation, recovering copper using an SX-EW processing plant.

Plant capacity will be 2,000t/d, doubling to 4,000t/d about 12 months after start-up.

Construction of the facility is expected to take six to nine months, the company said in August.

No 43:101 compliant technical reports have been completed.

EL PILAR

Southern is concluding a preliminary economic study at its El Pilar project in Sonora state.

The asset, 45km from the company's Buenavista mine, has reserves of 325Mt at average grades of 0.29% copper.

Southern plans to develop El Pilar as a conventional open pit mine producing copper cathodes using SX-EW technology.

Production is forecast at 35,000t/y copper cathodes over an initial 13-year mine life.

The company currently sees production starting in 2023, three years later than previously envisioned.

EL ARCO

Southern's US$2.9bn El Arco in Baja California state is by far Mexico's biggest undeveloped copper deposit.

Reserves stand at 2.7Bt at 0.4% copper and 0.11g/t gold.

Southern plans to develop an open pit mine and SX-EW processing plant to produce 190,000t/y of copper and 105,000oz/y gold.

The company envisages first production in 2025. In 2018, Southern said it expects work to start in 2021.

OUTLOOK

All five projects have the potential to become copper producers by end-2025 – but question marks hang over each of them.

Southern has yet to secure board approval for its trio of projects, and has pushed back its development schedule at El Pilar and Pilares.

El Arco could also be postponed with Southern aiming to develop some Mexican and Peruvian projects first.

Teck is evaluating a number of options for San Nicolás, while the lack of a 43:101 compliant study casts some doubts over the future scope of the Gloria operations.

A number of other projects – with copper as a significant by-product – look set to lift country-wide red metal output in the coming years.

These include Southern's US$413mn Buenavista Zinc investment, seen producing 20,000t/y copper and 80,000t/y zinc from 2022, and Torex Gold's US$496mn Media Luna gold project, with estimated output of 21,000t/y copper, 170,000oz/y gold and 1.7Moz/y silver from 2023.