Mexico Mining Forum 2018 - Mexico Business Events (mbe)
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Mexico Mining Forum 2018

Bright Future for the Mexican Mining Industry

Mario Alfonso Cantú, Undersecretary of Mining at the Ministry of Economy
Mario Alfonso Cantú

Mexico has much to offer the global mining industry, which is reflected in the rising amount of investment in the country after years of declines, said Mario Alfonso Cantú, Undersecretary of Mining at the Ministry of Economy, at Mexico Mining Forum 2018 on Wednesday in Mexico City.

“In 2017, Mexico saw an increase in exploration investment after four years of decreases,” said Cantú during his presentation, “State of the Industry and Policy Priorities,” at the Hotel Sheraton Maria Isabel. Investment in the Mexican mining sector rose to US$5.53 billion in 2017 from US$3.75 billion the previous year.

Cantú highlighted the importance of emerging economies to the global mining sector, stating that developing countries are gaining importance in the supply of minerals globally, as they have increased their production share to surpass developed economies, particularly the US and Europe. Mexico, added Cantú, has much to offer to investors, including economic stability in terms of inflation, which rose an average of 2.5 percent annually between 2013 and 2017. This has proven attractive for investment overall as the country received a total US$163 billion in FDI between 2013 and 2018. Furthermore, 70 percent of the country’s territory is geologically suitable for the development of mining projects.

The growing investment in Mexican mining is leading to positive results. “In 2017, a greater number of mining projects were identified in Mexico due to an increase in the number of exploration companies, with 57 percent of the investment heading toward gold and silver, followed by copper, polymetal ores and iron ore.

In 2017, Mexico remained the sixth-largest recipient of investment for exploration globally after Canada, Australia, US, Chile and Peru, according to S&P Market Intelligence. This position, however, is one place behind 2014’s fifth place. While Mexico is attractive, it is in fact becoming less competitive according to Institute Survey, but new policies concerning the sector are expected to turn this trend around, said Cantú.

The goal of these new policies is to streamline internal processes within the Ministry of Economy to facilitate investment in mining projects. “It is unacceptable that SAT can take up to a year to respond to tax queries from mining companies,” said Cantú. The ministry will also focus on negotiating polices to promote mining investment. For instance, it will sign an agreement with Sonora’s government on Feb. 14 to prioritize key matters to attract investment. Cantú concluded his presentation with a call to industry members to work together with the government to strengthen Mexico’s mining sector.

How to Modernize The Mexican Stock Market: Adressing Investor Expectations

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The million-dollar question for the Mexican mining industry is how to meet investor expectations and strengthen the capital market. The answer requires the creation of a favorable stock market ecosystem that is affordable, accessible and profitable, panelists participating in the Mexico Mining Forum 2018 at the Sheraton Maria Isabel in Mexico City agreed on Wednesday.

John-Mark Staude, President and CEO of Riverside Resources, grabbed the audience’s attention by asking Mexicans among them to raise their hands. Most attendants did. When asked how many were also investors, only three hands went up. The quick dynamic framed the industry’s need to foster more national investment and to create better conditions in the country for foreign investors.

Riverside Resources believes in the mining potential of the country but it is “concerned about the increasing number of hurdles mining faces, such as the difficulties regarding the liberation of mining titles,” Staude said. “These have foreign investors gazing at other mining jurisdictions to continue growing their businesses.” Carlos Espinosa, Founding Partner at SoftLanding Group, agreed while stressing that “investors look for a safe, stable and profitable place to invest, which in Canada is known as safe jurisdictions.”

The Mining Development Bank (FIFOMI) strives to help in this endeavor by addressing the mining hurdles though its 14 regional offices in the country, said Israel Gutiérrez, FIFOMI’s CEO. “We seek to address the needs and concerns of miners by focusing on technical assistance and training. Likewise, by collaborating with other financial entities we can increase FIFOMI’s scope and provide a better response to the industry’s demands,” he said.

The lack of access to capital remains a key concern for both national and foreign investors. In a country in which the stock market appeared to be accessible to educated people only, the demand calls for the fostering of a stock culture. “The reality is that in Mexico the stock market culture is poor, which is one of the main challenges that Mexican Stock Exchanges face,” said Fernando Pérez, Executive Director of the Institutional Stock Exchange (BIVA).

Stock market players, such as BIVA, seek to be disruptive actors in the market, with the target of enhancing competition and achieving a better vertical integration so the market can become more dynamic and develop at a faster rate. BIVA’s goal is to add value through first-level technology that can modernize the stock market and provide international investors with the stock conditions they are used to. “We need to make the stock market grow. First, by attracting more issuers and through different mechanism such as the Fibras and CKDs. It is also a question of how to provide foreign institutional investors the conditions they are used to in other stock markets,” said Pérez.

Despite the hurdles, the Mexican stock market has been an integral support for the mining industry throughout the downturns and upturns of its supercycles. Commercial opening has been the greatest ally. “At the moment, FDI is US$33 billion for this administration. Before, it was between US$4 and US$5 billion, so the trade policy is helping,” said FIFOMI’s Gutiérrez. Macroeconomic stability is also crucial to ensure the fiscal and monetary capabilities required to better navigate any international changes and dynamics that otherwise could be devastating.

The panelists were optimistic about the future, however, amid the stock market’s modernization. “Just by having a credit card Mexicans can access cryptocurrencies, which are online stock markets,” said Staude, demythologizing the belief that only big companies can access stock markets. “I am optimistic about the future in the country. Events like the Mexico Mining Forum are key for creating dialogue between decision-makers, investors and the public sector. We need to build together to better adapt to changes,” he said.

Operators Look for Efficiency as Protection Against Market Fluctuations

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Miners do not control the market. They are dominated by external forces such as the construction industry and metals demand. That is why they must make processes ever more efficient so they can maintain momentum under lower metals prices, just as much as in good times, said Godfrey Walton, President and COO of Endeavour Silver at Mexico Mining Forum 2018 at the Sheraton Maria Isabel hotel in Mexico City on Wednesday.

Walton was joined on the panel by Fernando Alanís, Director General of Industrias Peñoles, who also agreed that mining production is dominated by fluctuations in the construction industry, so it is vital that miners take matters into their own hands. “This applies to every aspect from safety, training, technology and innovation,” he said.

The panel was completed by José Antonio Berlanga, CEO of Telson Resources and Christopher Warwick, Mexico Country Manager of Pan American Silver, and was moderated by Héctor Quezada, Director of Victaulic Mexico.

Warwick stated that efficiency is greatly impacted by human error. With Pan American’s recent expansions at both its Dolores and La Colorada mines, Warwick expected an accident to happen. “There are so many people coming in and out so there is a lot of room for human error,” he said. Nevertheless, the expansions were completed without incident, but shortly afterward, there was a fatal accident in the maintenance department at Dolores.

“This just goes to show that, even in such a slow-moving area, accidents can always happen,” he said. “With an accident like that you need to look and discover what is missing because to do nothing is not an option.”

But he said that, even though La Colorada is now moving into a new dimension of mechanization, there also needs to be a balance between humans and computers. “We were at one stage close to having a full office of computer people who were not aware of what the mine was supposed to do,” he says, highlighting that technology should not simply be implemented for technology’s sake.

Quezada went on to lead the conversation into a focus on new technologies and automation. “In the last few years, it is undeniable that there has been a great deal of investment in human resources and technology to increase efficiency,” he said. Berlanga shared some of the initiatives Telson is implementing in its Campo Morado and Tahuehueto mines to increase efficiency, including a dry tailings facility that allows much more efficient water recovery.

He also discussed energy use, which has become a much more interesting subject for miners since the 2014 Energy Reform. “In both our projects, we have signed agreements to obtain 100 percent of our electric energy from solar sources,” he said. “We think these kinds of initiatives are of the utmost importance.”

Alanís agreed, and underlined Peñoles’ long commitment to taking advantage of renewable energy resources. The Mexican operator, alongside EDP Renovables, installed a 200MW wind farm called Eolica de Coahuila northwest of Saltillo, with a US$350 million investment. “We also analyze how many square meters of water we use for each ton mined, and we constantly look to be more and more efficient,” he said.

Mining is an old industry, and both Walton and Warwick acknowledged that there are some techniques in mines that are hundreds of years old but Walton concluded that technology is not necessarily always the answer to the efficiency question. “If you look at Canadian mines, you see far fewer people in operations,” he says. “But it is undeniable that mines in Mexico are becoming more efficient, despite their high levels of personnel.”

Disruption: A Necessity for the Mining Sector

Héctor Rocha, Partner and Deputy Lead of the Energy Sector at EY
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Technology progresses at an almost unmeasurable rate and companies must innovate or face the possibility of being overtaken, Héctor Rocha, Partner and Deputy Lead of the Energy Sector at EY, told attendees at Mexico Mining Forum 2018 in Mexico City on Wednesday. “If you do not innovate you will disappear because you will be destroyed by a disruptor,” he said.

During his presentation titled, “Unlocking the Potential of Mexico’s Mining Industry,” at the Hotel Sheraton Maria Isabel, Rocha looked at technology and how it continues to impact the mining industry. “It took us 90 years to process 1 billion operations per second for US$1,000 and every hour we are capable of processing more,” he said. “The world’s computing power is growing at an unimaginable rate. Ninety percent of the world’s computer data has been created in the last two years alone.”

New technologies are changing every field from medicine to mobility, but Rocha warned of resistance in the mining sector. “There is a myth that the mining sector is unsuitable for technological advancement,” said Rocha. “I tell my clients that you need to make an effort to stop doing what everyone is doing. A simple step can generate great returns of investment.”

Rocha also highlighted the role innovation can play for economic growth. “To make businesses more profitable companies must use technology to their advantage, including blockchain, machine learning and automation. The sector must also find new operating models that distribute risk through collaboration.” He explained that while there is resistance, some companies in the mining industry are incorporating technologies with potential to fully disrupt the sector, from the Internet of Things to autonomous vehicles. Some examples included above-ground driverless trucks and trains, underground Volvo driverless trucks and self-driving ore cars – technologies that allow companies to reduce operational costs and greatly increase efficiency. Furthermore, autonomous equipment can go where humans cannot and drones can also be used to map mining areas.

Rocha warned attendees about the dangers of falling behind in the incorporation of new technologies and to be ready for change in order to stay ahead of potential disruptors or even to become disruptors themselves. “Companies need to develop flexible organizational systems that adapt to a fast-changing world,” he said.

Capturing Ideas: Innovation Molding The Future of Mining

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Capturing ideas and transforming them into technological innovations will mold the mining industry’s future but the greatest challenge that developers and technology providers face is overcoming miners’ resistance to engage them in technological innovation, agreed panelists at the Mexico Mining Forum 2018 at the Sheraton Maria Isabel hotel in Mexico City on Wednesday.

Along the path to technological innovation, it is crucial to start by giving ideas the opportunity to develop, implying a willingness to accept the failure of some, said Ben Whiting, Vice President of Exploration at Orex Minerals. “Not all ideas will improve the situation. You have to let your people try some new ones, even at the cost of them not being successful in the end, knowing that some will be different and bring change.” Cindy Collins, panel moderator and Founder of Mining Technology Partners, agreed, saying, “some ideas may not achieve your objective, but other ideas will arise from them that may indeed.”

Joel Carrasco, Director General of Solum Consulting Group (SCG), said his company has set its own corporate challenge of investing in initiatives that will innovate operations and implement new technologies. But once the idea has been transformed into a new technology, the key question for succeeding becomes how to present it to potential users. “We want to get our clients to start thinking about the new technologies that are out there and how they can incorporate them into their investment plans,” Carrasco said.

Educating the market is part of the process for achieving a higher acceptance of new technologies, added Felipe Rivera, Automation Hub Leader of Schneider Electric Systems Mexico. Even the way that companies innovate has changed: “Today, technological development requires interaction between the developer, the user and the provider, among others,” he said.

The use of strategies to better integrate all the members of the innovation process, such as focus groups, has helped companies like Schneider Electric to better meet client needs. Likewise, simulation, virtual reality rooms and modeling processes have also proved to be successful to better engage miners with technological advancements. “Innovation is here to stay. We have available technology to simulate and foresee the transformation of most minerals,” he said.  The ability to predict the impact that new technologies will have on mine operations also helps clients to be more open to adopting these technologies.

Alfredo Bertrand, General Manager of Epiroc Mexico, added that “modeling and simulations that measure the efficiency and durability of new models are really helpful to make users understand how technology allows the improvement of security standards that leads to more efficient operations.” Epiroc, formerly Atlas Copco, remembers the installation of the first subterranean computer 25 years ago, he said, stressing how mining technologies have advanced to automation, monitoring and simulation since then.

Orex Minerals stands at the other end of the road regarding technological innovation: it does not generate it but incorporates it into its models to better work with changing geologies and open the door to discovering new resources. Orex’s Whiting is convinced that “education is a key part of the ongoing process to implement innovation, as everybody within an organization must have continuous development as part of the corporate culture.”

As mankind advances in its usage of technology, the capacity to process information grows exponentially. Companies like Schneider Electric strive to provide greater access to technology for miners and to engage them with new ideas, Rivera said. But the industry is broad, added Whiting, saying that “we find people who are very resistant to change and others that want all the new tools in the market for their projects. So, the industry has the full spectrum.”

Sharing Best Practices: Economic Stimulation for Remote Locations

Pierre Moreau, Quebec Minister of Energy and Natural Resources
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With the ongoing NAFTA negotiation, the relationship between Mexico and Canada has taken on greater significance. Speaking at Mexico Mining Forum 2018 at the Sheraton Maria Isabel hotel on Wednesday in Mexico City, Quebec Minister of Natural Resources Pierre Moreau shared the province’s best practices as a model of sustainability.

The Quebec government developed its Plan Nord, which is an economic and social program aimed at creating jobs and developing wealth in the province’s northern communities, of which approximately one-third are native or aboriginal. “We are carrying out this project in conjunction with aboriginal populations and stakeholders in the area to promote strategic industries like mining,” he said.

In the 2015 census, Mexico registered 25.7 million indigenous citizens – or around 21.5 percent of its population. Mexico is also a country with a great number of remote locations, traversing desert, mountain areas and coastlines, and Moreau believes the same strategy applied in the Plan Nord to foment growth could apply to certain jurisdictions in Mexico.

The Plan Nord is expected to attract public and private investment of over CA$50 billion by 2025, and this number has already reached CA$16 billion since 2015. The government also created a dedicated fund that will be given CA$450 million to 2020. Moreau pointed out that the government works together with the private sector and research institutes to support R&D and promote private funding.

Similarly to SGM’s GeoInfoMex system, Quebec set up a geography infosystem that provides free access to all geoscience data collected by the province in the last 150 years. “This database is recognized as one of the best in the world and is regularly updated by the government, mining companies and academia,” said Moreau.

As a result of the Plan Nord, total mining investment in Quebec increased by 3 percent between 2015-16 to reach CA$2.6 billion. For 2017, mining investment was estimated to have increased 8 percent, representing over CA$3 billion. “The most important part of this trend is that the investment increase comes primarily from exploration and development,” Moreau said.

Additionally, the mining industry in the region represented a 150 percent rise in employment levels in the first two years since the Plan Nord was implemented. “There are now 12 mines currently in operation and many more being developed in the area,” said Moreau. “If mining projects are realized to their full potential, the number of annual jobs could vary between 50,000-250,000.”

But he pointed out that the environment must also be respected. The Government of Quebec also put forward guidelines that allow it to support projects that generate growth for communities and ensure these projects are socially acceptable. “Importantly, we are in the process of signing a tax agreement with municipalities so a proportion of the royalties goes to communities where projects are located,” he said.

The Quebec economy is booming and its job market is vibrant, ranking as one of the most attractive destinations for mining investment, rising from 18th to 12th in the Fraser Institute rankings in the last few years. “I believe we have a truly impressive story to tell the world,” said Moreau. “The Plan Nord is a golden opportunity for the mining industry.”

Stronger Relationships, Successful Projects Through Corporate Social Responsibility

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The mining industry is a source of jobs and economic advancement for the communities it operates in, yet many of those communities see it with a wary eye. As a result, companies are increasingly prioritizing social responsibility in the locations they operate both to benefit local ejidosand for the efficient and effective completion of their projects, agreed panelists at Mexico Mining Forum 2018.

“Governments grant permits but communities grant permission. Everybody thinks it is their gold: investors think it is theirs, farmers think it is theirs, the government thinks it is theirs and the company thinks it is theirs,” said Fred Stanford, CEO and President of Torex Gold, at Hotel Sheraton Maria Isabel in Mexico City on Wednesday. He highlighted the importance of communication and collaboration between all participants for a successful business relationship in mining projects.

Stanford was joined by Fabian Casaubon, Partner at Grupo GAP, Alain Charest, Vice President of Exploration for Evrim Resources, José Rodriguez, Director General of Evaluation and Organization of the Mining Fund, and Carlos Silva, CEO of Carrizal Mining and President of the Mexican Federation for Sustainable Mining.

All panelists agreed that collaboration with local communities through the entire project was essential to avoid conflicts and Casaubon highlighted the importance of early engagement for a successful mining project.

“It is essential to show these communities the respect they deserve from the first step of the projects. Many companies send lawyers to deal with local representatives but it is necessary to send high-level executives to gain the trust of these communities,” said Charest. Silva agreed and remarked upon the importance of acting as allies to these communities. “Communication and empathy are essential to build a strong relationship with them,” he said.

The negative image local communities have of the mining sector is not unfounded, as irresponsible projects have led to contamination and social inequality. “We cause a lot of disruption. When we arrive, everyone is at a similar economic level but we create inequality by making some richer than their neighbors,” said Stanford. “Furthermore, mining companies can put water sources at risk and communities do not know whether to trust us with their water.”

For that reason, “projects have to benefit local communities not political interests,” said Rodriguez. To do so, companies are increasing the participation of the local communities to ensure their interests are heard. For instance, he said that Torex Gold is increasingly involving communities in the decision process for the projects to be implemented. “In Cananea, for example, out of 30 suggested projects three were chosen by the industry and community,” he said.

Silva agreed that leadership from the state governments and companies is important to develop projects that have a good impact on the local population and mentioned Sonora, Chihuahua, Durango, Coahuila and Zacatecas as locations were successful projects have been implemented. “If we want communities to grant us permission they should see us on their side,” said Stanford.

All panelists agreed that a close alliance with local communities was unavoidable. “Mining is the only industry were social responsibility is fundamental. We used to be much closer to the mines than we are now and this has to change. Our role with the communities should be leadership and empathy,” said Silva.

Price-Reliability Balance Essential to Ensure Efficient Energy

David Fatzinger, General Manager of Latin America for InterGen
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With many mining operations located in remote areas, operators must find a balance between price and reliability. While outages can cause costly downtimes, nobody wants to pay over the odds for energy supply, David Fatzinger, General Manager of Latin America for InterGen, told Mexico Mining Forum 2018 at the Sheraton Maria Isabel in Mexico City on Wednesday. He added that the Energy Reform has opened many more opportunities for miners to demand – or even generate – better services.

“In the energy industry it is important to note that pricing is key,” Fatzinger said. “But Mexico has introduced a mining system that causes congestion, which means the proximity of the energy supply greatly affects efficiency.”

Intergen is a company that can supply customers through every modality available in Mexico, whether through cogeneration, renewable energies or combined cycle, Fatzinger said. While it only recently began venturing into solar power, he said diversification of power sources is vital. “Much like the mining industry, energy is very much cyclical and tends to work over periods of five to seven years. Over this time, different sources are more effective and more efficient, so we ensure we work across a variety.”

Intergen can provide short- or long-term contracts, indexed to a CFE tariff, to the wholesale energy market, or for a fixed price over a long time, said Fatzinger. “We already have all these projects in our portfolio and have been supplying industrial customers in Mexico for over 15 years.” In fact, Intergen signed a long-term supply contract with Canadian operator Goldcorp and built it a bespoke power plant at Peñasquito. “Goldcorp is growing its business and we are expanding to not only increase its energy availability but also enhance the quality of supply,” he said.

Fatzinger added that supplying one of the biggest mines in the country was a learning experience. “We began to develop products that we believe resonate with the rest of the industry, even going down to smaller users,” he explained. With the energy industry still evolving under the reform and many companies unsure about their footing, Fatzinger said Intergen offers its 20-year experience in Mexico to help negotiate the still-turbulent waters.

State Authorities Seeking to Change Mining Paradigms

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The Mexican mining industry acknowledges the sector needs to change the public’s perception. The strategy to achieve this, however, must focus not only on better communication but also on the government being a facilitator and not an obstacle to mining activity, agreed the panelists, including state government officials, at the Sheraton Maria Isabel Hotel in Mexico City on Wednesday.

Speaking at the Mexico Mining Forum 2018, the officials – Jesús Mesta, Deputy Minister of Economy in Chihuahua, Ramón Dávila, Durango Minister of Economy, Alberto López, Director General of the Mining Directorate at the Sonora Ministry of Economy and Álvaro Burgos, Guerrero Minister of Economy – discussed their role in changing paradigms and fostering socially responsible and sustainable practices.

“Why is Mexico, a traditionally mining country, still ashamed to claim that we are miners?” asked Armando Ortega, panel moderator and Vice President for Latin America of New Gold. The answer, he said, has to do with the stigmas that still surround mining in the country. “We are good at mining but not very efficient at sharing the messages of the industry to the communities, as other mining jurisdictions do to be successful,” he said. Mesta agreed. “We have a communication issue, which I believe is our problem, as we have been unable to broadcast how mining is progressing in the country.”

Dávila pointed out that “we have allowed the bad press to overtake us, but I believe that we must not be ashamed of mining as we have strived for more socially responsible practices. However, we must learn to better promote the industry and clean up its name.” He proposed a close collaboration between the government, local communities and mining companies to solve problems together and reach win-win solutions that will lead to the industry’s growth.

Along the path to unlocking Mexico’s mining potential, it is key to restore the industry’s competitiveness, to which political strength is vital. López is convinced that “Mexican mining has a high level of economic and technical power, but lacks political strength, which has it troubled.” Last year the Mining Chamber made an effort to reduce mining taxes, but it was fruitless. “We see how other industries act when they have the political strength to change the law. We must recognize this weakness of ours and unite in a strategic alliance to better address the issue,” he added.

It is clear for the industry that the first move toward political strength concerns the mining taxes. López remarked that “in Sonora we strive to reduce the exploration costs and we are very serious about it.” Mesta complemented this by focusing on the importance of putting “pressure on and working together with the federal government to create and establish favorable fiscal conditions that will not be subject to who is in office.”

But besides the tax regime, political will is key. In the case of Guerrero, the state has “sought different paths to unlock the potential of its mining industry, as its government is convinced that it has to bet on the mining industry,” said Burgos. Some of the main companies operating in the state are Torex Gold with the Media Luna Mine and Alio Gold with the Ana Paula Project, among others. “The feedback we get from our mining partners is that today they perceive a different and more favorable environment in the state. I believe it is fundamental for companies to have a social commitment and responsibility. Our role in the public sector is to foster the changes of paradigms around mining.”

Bureaucracy is another large obstacle that has hurt the industry’s competitiveness. “The best thing that state governments can do is to let mining companies work; often our bureaucracy is a huge obstacle for them,” pointed out López, to which the moderator Ortega responded with a well-known proverb: “A company may have 100 wonderful ideas and then be confronted with 101 obstacles by the government,” he said.

The officials concluded the panel on the need for mining policies to transcend political terms and parties. Likewise, for all industry players to work together and present a united front. “As long as we are not united as an industry, we won’t achieve the change we seek and need within the mining industry,” said Mesta.

Expanding Operator Talks Organic, Inorganic Growth

Dustin VanDoorselaere, COO of First Majestic Silver
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First Majestic Silver wants to keep its story simple, according to Dustin VanDoorselaere, the company’s COO. Addressing the audience at Mexico Mining Forum at the Sheraton Maria Isabel hotel in Mexico City on Wednesday, he detailed First Majestic’s growth strategy: “One metal, one country.”

The company grew rapidly from a relatively bloated junior mining company prior to the metals downturn in 2013. This was the catalyst for the operator to seek optimization, and it recently announced its acquisition of fellow Canadian Primero Mining, taking on its flagship San Dimas asset in Durango. “We are a multi-asset producer, with six 100 percent owned and operated mines in Mexico, focusing both on organic growth and some M&A growth,” said VanDoorselaere.

According to the COO, 60 percent of First Majestic’s revenue comes from silver, almost 30 percent from gold and the rest from lead and zinc. The company has six operating assets spread across the country: Santa Elena in Sonora, La Parilla in Durango, San Martin in Jalisco, La Guitarra in Edomex, La Encantada in Coahuila and Del Toro in Zacatecas.

The key to success, according to VanDoorselaere, is the team of people behind that business. “We employ about 4,000 contractors and employees directly, and of those people we are over 99 percent Mexico,” he explained. “We are truly a Mexican company that is truly committed to Mexico.”

The company wants to continue its impressive expansion, and has provided ambitious guidance. “We aim for an annual silver production of 20 million ounces,” said VanDoorselaere. This is a concerted effort, considering the company has produced 71 million ounces since 2011. “We currently have about US$180 million of cash on hand in our treasury, which was our big push to look to grow the company through an acquisition.”

For 2018, the operator’s total CAPEX will be US$125 million, and this amount will include US$49 million in underground development and US$27 million in exploration (its most ambitious project ever). La Guitarra will be expanded to process 1,000t/d, according to VanDoorselaere, while Plomosas in Sinaloa will be First Majestic’s next big focus with 5 percent of the company’s investment guidance focused on the asset.

“Our goal and vision is to be the world’s purest silver producer,” he concluded.

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