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In an exclusive preview of the 2019 edition, Mexico Mining Review asked Trevor Turnbull, Director of Gold and Precious Metals Global Equity Research at Scotia Capital about the bank’s expectations for the performance of metal prices and the investment environment in the global mining industry.


Q: What are Mexico’s main advantages in comparison to other mining jurisdictions?

A: Mining has a long history in the country, which means it has a well-trained workforce with readily available experts in all types of operations as well as engineers. Its supply chain is also completely intact so companies do not have to worry about importing equipment. The country already has everything it needs. This is what makes Mexico stand out from other regions with long mining histories such as Argentina that still need to import much of their equipment.

Scotia Plaza, Toronto

Q: How do you expect the prices of precious metals to perform in the short term?

A: Our official long-term forecast for gold prices is US$1,300/oz, which is the current price. On the other hand, the price of silver is expected to increase to US$19.25/oz over the long term but it is still quite below this benchmark. Nonetheless, we expect silver prices to catch up to gold as industrial demand and usage of this metal continue to rise. A lack of silver supply is not a particular concern as up to 70 percent of the world’s silver is processed as a byproduct. There are several large silver mines in the world but many gold and copper mines also happen to produce silver. What we need is not more supply but more industrial and investment demand for silver.

Q: How can companies find a more stable middle point between the short-term needs of investors and the long-term goals of mining operations?

A: We understand that this is not easy but mining companies need to continue focusing on their long-term goals and educating investors as to why this is the right way to do business. Mining is a long-term industry and it is not always possible to deliver short-term gains every quarter. Companies can also gain the trust of investors by having a strong track record that shows they can make solid investments that generate real returns. It can be challenging as sometimes operators may need to slow production to focus on expansion. This can easily scare off investors even though these strategies can reap more profits in the future.

Q: What projects do you think are bound to attract more investors or deliver a greater ROI in the short term?

A: In terms of gold and silver, the biggest project is the Juanicipio JV operated between Fresnillo and MAG Silver. It is going to be a large gold, silver and base metal operation and it is quite similar to Fresnillo’s Saucito, which has been incredibly profitable. It will start production by 2020 and this is going to be the newest large precious metal mine in Mexico. Americas Silver Corporation’s project in Sinaloa, San Rafael, is also interesting. Little mining is done in this state so it is important to see whether Sinaloa will emerge as a new mining area. It is off to a good start.

There are also some interesting expansion projects. The San Dimas operation now belongs to First Majestic, which is well-capitalized. It should be able to ramp up investment more than the previous owner. It is a good district and it will be interesting to see how it gets developed. The Camino Rojo project that Goldcorp sold to Orla Mining may be developed soon and it is an interesting project to keep an eye on.


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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