Mexico’s Sonora State Leads the Way in National Silver and Gold Production

Mexico’s performance as a global leader in gold and silver production extends over centuries, and its mining industry, partly based in Sonora state, now makes up 4 percent of its GDP.

Mexico’s longstanding performance as a global leader in gold and silver production extends over centuries and part of that has taken place in its Sonora state.

Output from Mexico’s mining industry makes up 4 percent of the nation’s GDP and generates over 350,000 jobs. With Sonora state leading the way in production, its viability as a mining hub is undeniable.

The gold standard for mining in Mexico is Fresnillo’s (LSE:FRES) La Herradura mine in the state of Sonora. La Herradura had an excellent last quarter in 2017, producing 117,891 ounces of gold and 172,000 ounces of silver. With over 1,200 employees, nearly 400 contractors and over 20 years in operation, La Herradura is symbolic of Sonora’s longstanding profitability.

The first gold rush

From the moment of their arrival on Mexican soil in the 16th century, the Spanish, who extended their empire across Latin America, pursued its gold reserves ferociously. While Jesuit padres came ashore and found many potential converts, Hernan Cortes, commander of the conquistadors, acted upon the empire’s need for gold to finance adventures abroad.

Once the Spaniards’ industry and modern mining processes were introduced to the Americas, gold and silver would be shipped across the ocean to satisfy Europe’s tremendous appetite for metals. Extraction would eventually be increased to non-precious metals such as coal and copper over the length of Spain’s 300-year rule. Between the 1570s and the 1630s, the first American silver boom saw Mexico’s mining exports overshadowed by production in Upper Peru, which provided Spain with 65 percent of all bullion taken from the New World.

Mexico today

Today, Mexico is the world’s largest supplier of silver and was ranked as the eighth-highest producer of gold in 2017. In 2015, the states of Sonora and Zacatecas combined to make up 55 percent of the country’s aggregated mining GDP, while 11 percent of the country’s total territory is currently approved for mining operations to facilitate further investment activity.

Mexico’s incumbent president, Enrique Peña Nieto, released a statement in 2017 recognizing the importance of mining activity on Mexico’s economy, which ranks the resource sector as the fifth-biggest generator of foreign currency nationwide. Between September 2016 and June 2017, Peña Nieto’s government even subsidized training and technical assistance to small- and medium-sized mining companies interested in Mexico’s resources, while officials visited multiple mining conferences between 2016 and 2017 as a way of approaching foreign investors and hastening the development of operations in Mexico.

Continued foreign investment in Sonora State

Companies like the Canadian exploration-stage company Argonaut Gold (TSX:AR) are exactly the kind of international players Mexico is courting. Argonaut Gold’s La Colorada mine in Sonora is still expanding, with the company planning on investing between US$17 million and US$18 million in 2018 to expand the mine’s northwest leach pad and to transition all mining operations to its El Creston pit by the end of 2018’s first quarter.

Argonaut Gold acquired La Colorada in 2010, but the project’s original concessions were staked by Jesuit missionaries in 1740, with Spanish miners taking ownership of the property 50 years later. The mine would then change hands multiple times between English and American interests before its dismantling during the Mexican Revolution in 1916. Today, reports show La Colorada’s mining complex hosts probably reserves of 398,000 ounces of gold and 6.9 million ounces of silver as well as an indicated resource of 568,000 ounces of gold and 9.6 million ounces of silver. Inferred resources show 47,000 ounces of gold and 641,000 ounces of silver remain within the complex.

Mining operations in Sonora state are supported by excellent infrastructure, including an effective water and power supply system, high-grade access roads, a trained labor force and support vendors. Additionally, climate conditions permit operation over the course of the entire year. Situated in a state with such a mining-friendly climate, many companies find their operations are unlikely to suffer supply constraints or logistical issues.

Another company that benefits from Sonora state’s strong mining infrastructure is Silver Viper (TSXV:VIPR) and its La Virginia project, which sits 220 kilometers east-northeast of Hermosillo, the state capital. Firmly set within the Sierra Madre Occidental, the project is in a highly sought-after region with rival operations to the northwest and the southeast. The company has signed letters of intent for 100-percent ownership of two separate groups of claims for a total of nearly 36,000 hectares and approximately 40 kilometers of prospective strike.

Silver Viper’s La Virginia project contains low-sulfidation epithermal-style gold and silver in quartz stockworks, veins and hydrothermal breccias, which are strongly controlled by the regional north-northwest trend. The style of mineralization is common in the Sonora state. Historical underground workings at La Virginia reveal mineralized zones within dilationary bends along the target structures can achieve true widths of up to 20 meters. Untested anomalous gold and silver occurrences have been identified along the regional trend and await further exploration.

The property’s historical dataset, including logging and geochemical assays from nearly 53,000 meters in 188 holes drilled, is currently undergoing verification. Information on La Virginia’s reconnaissance geochemistry and mapping is also being reviewed. Core samples from the property’s previous owners are available to Silver Viper, located in a secure storage facility. Data includes 13.69 g/t gold equivalent at 23.5 meters grading and 6.14 g/t gold equivalent at 15 meters grading; true widths were not disclosed by the previous owner. Exploration plans for 2018 involve regional exploration and surface sampling, with diamond drill testing anticipated by mid-2018.

Also within the Sierra Madre Occidental, 220 kilometers east of Hermosillo, is Alamos Gold’s (NYSE:AGI) Mulatos mine. Mulatos is located 300 kilometers from the American-Mexican border and consists of nearly 29,000 hectares of mineral concessions. By 2016, the mine had produced approximately 1.7 million ounces of gold since production began in 2006. Mulatos was initially designed as a 10,000-tonne-per-day operation, but expansions throughout the site have since increased that amount to 18,000 tonnes per day as of 2016.

Proven and probable reserves total 1.88 million ounces of gold, while measured and indicated resources total 2.7 million ounces of gold. Inferred resources indicate an additional 322,000 ounces of gold. High-sulfidation, epithermal deposits in the Occidental lie within a mid-tertiary dacitic to rhyodacite volcanic dome complex. The Mulatos deposit is comprised of the adjoining Estrella, El Salto, Mina Vieja and Puerto del Aire resource areas. Though often bordered by post-mineral faults, these resource area zones form a gold mineralization trend which spans 2.7 kilometers.

Market uncertainty over gold has meant Mexico has seen fewer mining sites open in recent years, with the nation’s gold output declining from 135 MT to 125 MT in 2016. That being said, there is still cause for optimism, represented in the current production and exploration endeavors still taking place in the country. Factors such as a precious metals price surge in 2017 have led to estimations that investment in Mexican mining will total US$5 billion in 2018.

The takeaway

Sonora state is well placed to benefit from an expected uptick in mining investment in 2018, coupled with a global rise in the price of precious metals. Thanks to mining-friendly policies enacted by the Mexican government, and continued interest from foreign mining companies, the nation’s extensive history in resource extraction seems poised to continue into the near future.

This article was first published by the Investing News Network in April 2018.

This INNspired article is sponsored by Silver Viper (TSXV:VIPR). This article was written according to INN editorial standards to educate investors.

Kirkland Lake Gold Ltd. today announced that at a special meeting of shareholders held earlier today the Company’s shareholders voted in favour of the arrangement resolution approving the proposed merger of equals whereby all of the issued and outstanding shares of the Company will be acquired by Agnico Eagle Mines Limited for common shares of Agnico Eagle in a merger of equals for consideration per Kirkland Share ...

Kirkland Lake Gold Ltd. (" Kirkland Lake Gold " or the " Company ") (TSX:KL) (NYSE:KL) (ASX:KLA) today announced that at a special meeting of shareholders held earlier today (the " Meeting "), the Company's shareholders voted in favour of the arrangement resolution (the " Kirkland Arrangement Resolution ") approving the proposed merger of equals whereby all of the issued and outstanding shares of the Company (the " Kirkland Shares ") will be acquired by Agnico Eagle Mines Limited (" Agnico Eagle ") for common shares of Agnico Eagle (the " Agnico Shares ") in a merger of equals for consideration per Kirkland Share equal to 0.7935 of an Agnico Share (the " Arrangement ").

186,840,773 Kirkland Shares, representing approximately 70.85% of the issued and outstanding Kirkland Shares as at the record date, were voted at the Meeting. The Kirkland Arrangement Resolution was approved by 150,681,106 Kirkland Shares or approximately 80.65% of votes cast by Kirkland Lake Gold shareholders either in person or represented by proxy at the Meeting. The report of voting results will be made available under the Company's profile on SEDAR at and on EDGAR at .

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Agnico Eagle Mines Limited is pleased to announce that at a special meeting of shareholders held earlier today Agnico Eagle shareholders voted overwhelmingly in favour of the resolution approving the issuance of Agnico Eagle common shares in connection with the proposed merger with Kirkland Lake Gold Ltd. by way of a plan of arrangement under the Business Corporations Act . The resolution was approved by ...

Agnico Eagle Mines Limited (TSX: AEM) (NYSE: AEM) (" Agnico Eagle ") is pleased to announce that at a special meeting of shareholders held earlier today (the " Meeting "), Agnico Eagle shareholders voted overwhelmingly in favour of the resolution approving the issuance of Agnico Eagle common shares in connection with the proposed merger with Kirkland Lake Gold Ltd. (" Kirkland Lake Gold ") by way of a plan of arrangement under the Business Corporations Act ( Ontario ) (the " Merger ").

The resolution was approved by approximately 99.86% of the votes cast by Agnico Eagle shareholders at the Meeting, with a shareholder turnout of 69.62%. Detailed voting results for the resolution are as follows:

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B2Gold Corp.   is pleased to announce that its Board of Directors has declared a cash dividend for the fourth quarter of 2021 of $0 .04 per common share , payable on December 17, 2021, to shareholders of record as of December 8, 2021. All dollar figures are in United States Dollars unless otherwise indicated. As part of the long-term strategy to maximize shareholder value, B2Gold expects to declare future ...

 B2Gold Corp. (TSX: BTO) (NYSE: BTG) (NSX: B2G) ("B2Gold" or the "Company") is pleased to announce that its Board of Directors (the "Board") has declared a cash dividend for the fourth quarter of 2021 of $0 .04 per common share (or an expected $0.16 per share on an annualized basis), payable on December 17, 2021, to shareholders of record as of December 8, 2021. All dollar figures are in United States Dollars unless otherwise indicated.

As part of the long-term strategy to maximize shareholder value, B2Gold expects to declare future quarterly dividends at the same level. This dividend is designated as an "eligible dividend" for the purposes of the Income Tax Act ( Canada ). Dividends paid by B2Gold to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes.

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cannabis plant layered with German flag graphic
Dmytro Tyshchenko / Shutterstock

Catch up on some of the biggest news of the week for the cannabis investment world.

Three political parties have formed a coalition in Germany, leading to a new government, and it has promised cannabis reform in the European nation.

Meanwhile, a popular cannabis retailer confirmed consumers will now find its products available for delivery on the Uber Eats mobile application in Ontario.

Keep reading to find out more cannabis highlights from the past five days.

Coalition of parties promises forward-looking cannabis policy

Germany, a country with comprehensive and elaborate medicinal rules for cannabis, is in a time of transition as a new government is set to begin to take over after 16 years of Angela Merkel.

Olaf Scholz, the proposed next chancellor of Germany, leads a three party coalition that will become the country's governing body. As part of its promises, talk of adult-use cannabis regulation has now gained even more momentum. A report from MJBizDaily quotes a German policy document that shows the coalition's stance:

"We are introducing the controlled distribution of cannabis to adults for consumption purposes in licensed shops. This controls the quality, prevents the transfer of contaminated substances and guarantees the protection of minors."

However, despite the promise and excitement, it remains to be seen how these ideas will be applied since no formal regulations have been drafted or approved yet.

Canadian cannabis retailer partners with popular delivery app

Tokyo Smoke, a cannabis retail operator in Canada owned by Canopy Growth (NASDAQ:CGC,TSX:WEED), announced a collaboration agreement with Uber Canada (NYSE:UBER) whereby cannabis consumers will be able to use the Uber Eats app to order products before they visit stores.

While the app won't let consumers get cannabis delivered to them, this new method opens the doors to more dynamic ways of buying cannabis.

"As a market leader in innovation and a platform used by so many Canadians, we believe this is the ideal next offering that can be done safely and conveniently on the Uber Eats app," Mark Hillard, vice president of operations with Tokyo Smoke, said in a press release.

A report from the Canadian Press indicates Ontario is considering allowing dispensaries to have delivery and pickup options made available to consumers permanently. The province allowed some of these purchasing options at the outset of the COVID-19 pandemic, but then removed them.

Lola Kassim, general manager of Uber Eats Canada, said this new end-to-end experience will provide consumers with responsible access to legal cannabis products.

Cannabis company news

  • Organigram Holdings (NASDAQ:OGI,TSX:OGI) issued financial results for its Q4 2021 period. In its report, the company notes a net loss of C$26 million despite a 22 percent uptick in net revenue to C$24.9 million. Beena Goldenberg, the newly appointed CEO of the firm, is encouraged by the market share position earned by the company, which said it became the fourth biggest producer in Canada during the reporting period.
  • Halo Collective (NEO:HALO,OTCQB:HCANF) confirmed the decision for Akanda, its spinoff company focused on international cannabis opportunities, to begin trading on a US exchange. "The number of shares to be offered and the price range for the proposed offering have not yet been determined," the company told investors in a press release.
  • High Tide (NASDAQ:HITI,TSXV:HITI) announced the acquisition of 80 percent of NuLeaf Naturals, a CBD product wellness developer, for an estimated US$31.24 million. The deal includes a three year option clause for High Tide to complete a total acquisition. "As international markets open up and as export regulations evolve, NuLeaf's cGMP-certified facility positions us to take advantage of the global CBD business opportunity," Raj Grover, president and CEO of High Tide, said.
  • Humble & Fume (CSE:HMBL,OTC Pink:HUMBF) released the financial report for its first 2022 fiscal quarter to shareholders and the market. "As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers," Joel Toguri, CEO of Humble, said.

Don't forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Commercially viable scandium deposits are rare, making widespread use of the metal tricky. However, there is indeed opportunity in the space.

Scandium is a critical metal that is as strong as titanium, as light as aluminum and as hard as ceramic.

While it is more abundant than lead, mercury and all the precious metals, there are no pure scandium-producing mines. The rare earth element is often a by-product, produced from refining other metals, including uranium.

Pure scandium metal rarely concentrates at higher grades alongside other metals, making commercially usable scandium deposits very rare. What's more, even when scandium is found at elevated levels, processing it can be difficult, leading to very few stable sources of this critical metal.

Not surprisingly, that means there has been very little adoption of scandium in commercial applications. However, as John Kaiser of Kaiser Research has pointed out several times in the past few years, as well as more recently, that doesn't mean there hasn't been research into how scandium could be used in the future.

"Hundreds of applications (have been) filed, many of them related to alloys with aluminum," he said in an interview with the Investing News Network. "This obscure metal is going to go ballistic in the next few years."

Kaiser made that statement a few years back, and scandium has yet to go ballistic. But he still has hope for the metal, and it could yet have its day in the sun.

Below is an overview of the scandium market. Topics covered include current production, newcomers to the space and the metal's potentially bright future.

Current scandium production

The first known large-scale scandium production was associated with Russian military programs. Details are lost to history, but Russians reportedly alloyed the metal with aluminum to make lightweight MIG fighter parts. Mining at these historic Russian production sites has ceased, but stockpiles of scandium oxide and scandium master alloy remain in Russia. These stockpiles are rumored to be dwindling, but continue to be offered for sale on the market.

Today, most scandium is produced as a by-product during the processing of other ores, such as uranium or rare earths, or recovered from previously processed tailings. As a result, scandium supply can be affected by the supply and demand dynamics of the metals it is produced with. That can make the metal's already tough-to-follow market dynamics even more difficult to understand.

According to the US Geological Survey, scandium-producing countries include China, where it is a by-product of iron ore, rare earths, titanium and zirconium; and the Philippines, where it is a by-product of nickel. Scandium is also produced as a by-product of uranium in Russia, Ukraine and Kazakhstan.

More US production could be on the horizon as well after a push in legislation that encourages the Department of Defense to look into the potential uses of the metal. Environmental and construction permits have been approved for NioCorp's (TSX:NB,OTCQX:NIOBF) polymetallic Elk Creek project with probable reserves estimated to be 36 million tonnes containing 65.7 parts per million scandium.

Scandium resources have been identified in minerals-rich regions across the world, most notably in Australia, where a number of junior mining companies are working to develop scandium deposits in New South Wales. These include Scandium International Mining (TSX:SCY), which controls the Nyngan project; Clean TeQ Holdings (ASX:CLQ,OTCQX:CTEQF), which holds the Sunrise project; and Platina Resources (ASX:PGM,OTC Pink:PTNUF), which is working on the Owendale project.

Scandium price and trading

The US Geological Survey states that the global scandium market is "small relative to most other metals." This is exemplified by global production and consumption, which is only an estimated 15 to 20 metric tons annually.

The US Department of Commerce and the International Trade Commission do not have specific data on trading for the metal. Furthermore, there is no formal buy/sell market today — scandium is not traded on an exchange and there are no terminal or futures markets.

Instead, the metal is traded between private parties, mostly at undisclosed prices and in undisclosed amounts. Therefore, understanding the precise volume of production and cost of scandium is difficult, and independent estimations are more relevant.

Production estimates are based on levels of trader activity and interest, as well as the knowledge that some traders deal in the critical metal from very small operations.

The estimates also include consumers believed to be sourcing their own scandium through small, controlled recovery operations, but don't consider amounts of the metal contained in the master alloy currently being sold from Russian stockpiles.

The scandium opportunity

Analysts expect the global scandium market to grow at a compound annual growth rate of above 11 percent between 2020 and 2025. "The major factors driving the growth of the market studied are the accelerating usage in solid oxide fuel cells, and the rising demand for aluminum-scandium alloys," notes ReportLinker.

Despite the lack of known, stable supply, scientists and engineers have been working hard to develop new products incorporating the metal. Scandium's potential in high-tech applications is well documented. Highlights of the metal's properties include:

  • It can be used in the creation of stronger, corrosion-resistant, heat-tolerant and weldable aluminum alloys for lightweight aircraft and automobiles.
  • Its outstanding electrical properties and heat resistance are valuable for solid oxide fuel cells.
  • It has unique optical properties for high-intensity lamps.

A recent Kaiser Research report on scandium details the wide variety of end uses for scandium now and into the future, as well as where potential supply to meet that demand may originate.

potential scandium oxide supply and demand

Potential scandium oxide supply and demand.

Kaiser Research

As Kaiser has explained, "There's an enormous latent demand for scandium if it ever became available on a primary, scalable basis."

In other words, the only barrier to accessing demand from a new family of high-performance aluminum materials and energy/lighting products is the lack of commercially viable larger-scale scandium production. Interestingly, Kaiser's work highlights two important scandium market events that may "have the potential to launch scandium demand growth over the next decade towards a 1,000 (tonne per annum) market worth US$2 billion."

For one, Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) announced in 2020 that it has developed a route to recovery for scandium at its Sorel-Tracy facility in Quebec, where it produces titanium slag from the Lac Tio iron-titanium deposit. In mid-2021, Rio Tinto began commercial-scale operations at its new scandium oxide production facility.

"The Rio Tinto development is a game changer for the scandium sector," said Kaiser, who believes the increase in scandium production could help boost the sector.

Secondly, Scandium International Mining filed an application in late 2019 for a patent protecting a method for recovering scandium and other metals from the waste streams of copper oxide leaching operations. In mid-2020, the company announced that copper raffinate tests showed its patent-pending process could recover enough scandium to match the supply being added to the market by Rio Tinto.

"Conditions are finally right for scandium to become the ideal lightweighting solution for aluminum," Kaiser said in his note to investors.

This is an updated version of an article originally published by the Investing News Network in 2014.

Don't forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


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