In an exclusive preview of the 2019 edition, Mexico Mining Review asked Mike McAllister, Vice President of Corporate Development at Sierra Metals about the progress made at the company’s Bolivar and Cusi mines in Mexico, the current political climate and the ways junior miners can raise enough capital.


Q: What have been the main advancements at the Bolivar mine?

A: We had some equipment issues at Bolivar that we corrected last year and we have also worked to improve our recovery at the mill. We brought in 13 pieces of new, larger-scale equipment and we can now process about 3,000t/d. Similar to Cusi, we will install a used ball mill, which will give us greater flexibility in terms of tonnage and grind size. By the end of 2018, Bolivar will be processing 3,500t/d. Bolivar is not only growing in terms of production; we are also carrying out exploration work there. A survey of the property indicated a higher grade material at the Bolivar West and Northwest zones, we are working to build ramps and stopes there as we speak, so there is a lot of new opportunity.

Q: Sierra was the first operator in Latin America to use battery power. What spurred your decision to become a pioneer in this area?

Mike McAllister, Vice President of Corporate Development at Sierra Metals

A: The more battery equipment being used underground, the less pollution there is, so it saves on certain costs such as ventilation. The benefits are twofold: one is that the air quality is better for the workers and the other is that ventilation costs are reduced. As well as having a social benefit, it benefits the bottom line of the operator.

Q: What cost-cutting strategies did you employ to halve your net losses in the first nine months of 2017 compared to the same period in 2016?

A: We went through a period of maintenance in 2016. We replaced a lot of outdated equipment, we improved the grade and the amount of ore processed through the mill and we have used more modern methodologies. A lot of it comes down to the fact we are processing much more material more efficiently with improved recoveries which lowered operating costs.

Q: What is your view of Mexico’s political climate and the availability of financing for mining?

A: There is some nervousness about the upcoming political changes but overall, I think the climate is good. When speaking to the institutions that understand the industry, there should be no trouble getting financing. For us, FIFOMI’s funding has been sufficient and has helped us with our working capital, but there are always complaints about the level of funding being constrained. I think a big company that is looking for much more financing may feel it is not enough. That being said, there are always alternative funding options available.

Q: What strategies can junior miners use to raise sufficient amounts of capital to move projects forward?

A: There are different opportunities, including private equity, which funds a lot of strong, early-stage projects. There is also access to the TSX or other exchanges, such as the Venture exchange. There are many listed mining companies and they have access to public markets. Some companies will finance via a stream or off-taker agreement. The opportunities definitely exist.


This is an exclusive preview of the 2019 edition of Mexico Mining Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy Mexico Mining Review or access our digital copy of the 2018 edition.

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