MEXICAN MARKET OPPORTUNITIES: MINING SECTOR
In Market Services in Mexico Services in Mexico (ITDR): Sector specific market information Sector profiles studies & directories Customized list of contacts (buyers, partners) Personalized Matchmaking services Presenting your product to key contacts First contact point for local importers Facilitate linkage between Ontario suppliers and Mexican partners Ground support for in coming visits to Mexico Trade Missions to Mexico Support related to trade missions Buyer mission to Ontario Logistic support to Mexican delegations Local trade show attendance Opportunity Alerts
The mining sector in Mexico remains one of the best destinations for foreign investment Mexico is second in Latin America and sixth globally, in terms of the best places to invest in exploration in the mining sector (Metals Economics Groups March 2010 report)
Foreign Investment in Exploration 2009 Share by Country (Total US$366 Millions)
Value of Mining Production Major Mexican States 2009 Share by State (Total US$9.3 billion) Top 4 States (70%) Sonora #1 Chihuahua #4 Coahuila #3 Zacatecas #2
Major Canadian Mexican Companies in Mexico Mexican Companies in Mexico Canadian Companies Mexican Companies Metals Goldcorp Grupo México Au, Ag, Cu, Mo, Zn Pan American Silver Fresnillo Plc Au, Ag Farallon Resources Industrias Peñoles Ag, Cu, Pb, Zn Agnico Eagle Grupo Alfil Au; Cu Frontera Copper Empresas Frisco Au, Ag, Cu, Pb, Zn Teck Cominco Grupo Acerero Norte Fe, coal, iron Alamos Gold Ternium Hylsa Fe, iron Gammon Lake Minera Autlán Fe, Mn, Si F Majestic Minas de Bacis Zn, Pb, Cu Glamis Gd Materias Primas Au, Ag Silver Eagle Las Encinas Au, Ag, Cu, Mo, Zn
Value of Mexican Mining Production 2009 Share by Metals (Total US$7.5 Billion) Top Four Metals in Mexico Mexican mining production Mexican worldwide production ranking Gold 23% 12 Silver 18% 2 Copper 17% 14 Zinc 9% 6 Total 66.8%
Mexican Gold Production by Mine Site 2009 Project Company State Production (Thousands of Oz) La Herradura Fresnillo Plc Sonora 258.8 Los Filos Goldcorp Guerrero 239 El Sauzal Goldcorp Chihuahua 204 Mulatos Alamos Gold Sonora 178.5 San Dimas Goldcorp Durango 113 Ocampo Gammon Gold Chihuahua 108.7 La Ciénega Fresnillo Plc Durango 100 Cerro San Pedro New Gold SLP 95.5 Peñasquito Goldcorp Zacatecas 90 Dolores M Minefinders Chihuahua 77.3 Palmarejo Coeur d Alene M. Chihuahua 57.7
Mexican Silver Production by Mine Site 2009 Project Company State Production (Millions Oz) Fresnillo Fresnillo Plc Zacatecas 37.9 Álamo Dorado Pan American Silver Sonora 5.3 Tayoltita Goldcorp Durango 5.0 Tizapa Industrias Peñoles Mexico State 4.0 Ocampo Gammon Gold Chihuahua 3.9 La Colorada Pan American Silver Zacatecas 3.4 Palmarejo Coeur d Alene M Chihuahua 3.0 Peñasquito Goldcorp Zacatecas 2.6 Guanaceví Endeavour Silver Durango 1.8 Cerro San Pedro New Gold SLP 1.5 Cozamin Capstone Mining Zacatecas 1.4 Dolores Minefinders Chihuahua 1.3 El Cubo Gammon Gold Guanajuato 1.1 Guanajuato Great Panther Guanajuato 1.0
Mexican Copper Production by Mine Site 2009 Project Company State Production (Tons) La Caridad Mexicana de Cobre Sonora 130,616 Milpillas Peñoles Sonora 20,345 Santa Ma. de La Paz NEMISA SLP 17,646 Mexican Zinc Production by Mine Site 2009 Project Company State Production (Tons) Charcas Grupo México SLP 62,033 Bismark Industrias Peñoles Chihuahua 47,722 Fco. I. Madero Industrias Peñoles Zacatecas 47,169 Campo Morado Farallon Guerrero 38,058 Tizapa Industrias Peñoles Mexico State 31,010
Mexican Mining Investment 2001 2010 (Total US$4,431 Millions 2010) Investment forecast 2010 2012 US$13 billion 2011 US$4,108 million 2012 US$4,484 million Active 100 264 Exploration 561 652 Expansion 946 969 New projects 365 1,493 Training 384 324 Equipment 350 549 Environmental 63 87 Security 47 50 Communities 42 43 Total Investment 2,858 4,431 *Estimated figures 2009 2010*
Mining Projects in Mexico 740 projects/230 companies Number/Type projects 17 Projects in Development Share CDN projects 82% (14 / 17) Project Location Mexican States Baja California Sur, Chihuahua, Coahuila, Durango, Michoacan, Nayarit, Sinaloa, Sonora, Zacatecas Minerals Au, Ag, Cu, Co, Hg, Pb, None Zn Ontario companies developing projects 70 Projects in Production 58% (41 / 70) Baja California, Chihuahua, Coahuila, Colima, Durango, Guanajuato, Guerrero, Jalisco, Mexico City, Michoacan, Nayarit, Oaxaca, Queretaro, San Luis Potosi, Sinaloa, Sonora, Zacatecas Au, Ag, Cu, Excellon Resources Inc., Co, Hg, Pb, Primero Mining, Silver Zn Dragon Resources, Inc. 610 Projects in Exploration 77% (472 / 610) Baja California, Chiapas, Chihuahua, Coahuila, Colima, Durango, Guerrero, Hidalgo, Jalisco, Mexico City, Michoacan, Morelos, Nayarit, Nuevo León, Oaxaca, Puebla, Querétaro, San Luis Potosi, Sinaloa, Sonora, Tamaulipas, Veracruz, Zacatecas Amerix Precious Metals Corporation, AmMex Gold Mining Corp., Pacific Au, Ag, Cu, Comox Resources Ltd., San Co, Fe, Ge, Anton Resource Hg, Li, Mo, Pb, Ti, Zn, WO 3 Corporation, Seafield Resources Ltd, Sierra Minerals Inc., Silver Shield Resources Corp., Sparton Resources Inc., Valdez Gold Inc. Other countries operating in Mexico: Argentina, Australia, Chile, Italy, India, Japan, Peru, UK & USA
Investment in New Mines that began operations in 2009 Mining Project Company State Mineral US$ Million Asientos Empresas Frisco Aguascalientes Au 44 El Triunfo El Triunfo Baja California Au, Ag 23 San Juan Rofomex Baja California P 75 La Encantada First Majestic Coahuila Ag 30 Minera Dolores Minefinders Chihuahua Au, Ag 450 Pinos Altos Agnico Eagle Chihuahua Au, Ag 240 Palmarejo Coeur d Alane Chihuahua Au, Ag 225 Cerro Las Minitas Silver Dragon Durango Ag N/A Velardeña ECU Silver Durango Au, Ag 10 Cascaronal Jaguar Mining Jalisco Fe N/A Aquila Ternium Michoacán Fe 30 San Francisco Timmins Gold Sonora Au 90 San Felipe Minera Hochschild Sonora Au N/A Peñasquito Goldcorp Zacatecas Au, Ag 1494 El Coronel Empresas Frisco Zacatecas Au 71 Total Investment new mines 2,817
New Mining Operations by State/Company 2009 US$ Million (Total investment 3,098 m dlls) San Fco. Timmins US$90 San Felipe Hochschild US$40 Dolores Minefinders US$450 Palmarejo Coeur D Alene US$225 Pinos Altos Agnico Eagle US$240 El Triunfo US$23 San Juan de Rofomex Reopening US$75 Cerro Las Minitas Silver Dragon US$40 Velardeña ECU Silver US$10 Cascaronal Jaguar Mining US$30 Aquila Ternium US$30 La Encantada First Majestic Expansion US$30 El Coronel Frisco US$71 Asientos Frisco US$44 Peñasquito Goldcorp US$1,700
Major Projects in Advanced Exploration in Mexico Project Company State Mineral Soledad Dipolos Fresnillo plc Sonora Au El Castillo Argonaut Gold Durango Au La Fortuna Argonaut Gold Sinaloa Au El Águila Gold Resources Oaxaca Au Crestón Mascota Agnico Eagle Chihuahua Au Mercedes Yamana Gold Sonora Au,AG Metates Chesapeake Gold Durango Au,AG, Zn Camino Rojo Goldcorp México Zacatecas Au,AG Guadalupe y Calvo Gammon Gold Chihuahua Au,AG La Bolsa Minefinders Sonora Au,AG Saucito Fresnillo Plc Zacatecas Au,AG El Toro First Majestic Zacatecas Au,AG El Arco Grupo México Baja California Au,Cu,Mo San Felipe Frisco Baja California Au Concheño Frisco Chihuahua Au,AG Tayahua Frisco Zacatecas Cu
New Projects in Development/ Advanced Exploration US$ Million Soledad Dipolos Fresnillo Newmont in 2010 with 100 thousand ounces of Gold per year Mercedes - Yamana Gold, in 2012, with 125 thousand ounces of Gold per year Creston Mascota of Agnico Eagle in 2011, with 46 thousand ounces of Gold per year El Saucito - Fresnillo Plc in 2011, with 22.5 thousand ounces of Gold per year and 4.7 million ounces of Silver per year El Arco - Mining Mexico in 2012, with 190 thousand tons of Copper and 105 thousand tons of Gold. (US$1,550 mill) El Aguila - Gold Resources in 2010, with 70 thousand ounces of Gold per year El Boleo - Baja Mining in 2011, with 55 thousand tons of Copper, 1.5 thousand tons of Cobalt, and 6 thousand tons of Zinc. (US$568 mill) El Castillo - Argonaut Gold, plans to increase its production capacity to 75 thousand ounces of Gold in 2010
Product Grupo Mexico Purchase Orders by Mine for 2011 Project: Nueva Rosita Plant Coahuila Investment: US$1.5 millions Units Mining Hoppers for Coke 2 Horizontal Centrifugal pumps 1000 gallons per minute 3 Vehicle fire suppression system 300 gallons Project: Refineria Electrolitica de Zinc, San Luis Potosi Investment: US$13 millions Product Front Carrier of 3.5 yards Pumps for Corrosive Liquid 2 Forklift of 10,000 pounds 2 Traveling Crane Cooling Tower Units
Grupo Mexico Purchase Orders by Mine for 2011 Project: Mexicana de Cobre Nacozari, Sonora Investment: US$15 millions Product Drill for bore drilling and blast-hole drilling Backhoe Frontal Carrier Forklift of 10,000 pounds Trucks for carrying capacity of 363 Tons Travelling Crane Cooling Tower Backhoe Front Carrier Forklift of 15,000 pounds Units 2 2 2
Grupo Mexico Purchase Orders by Mine for 2011 Project: Minerales Metalicos del Norte, Unidad Santa Barbara Chihuahua Investment: US$6 millions Product Fans 28" of diameter 8" of pressure Fans 160,000 Turbo blower with motor of 150 HP Winch control Systems Leg Drills Winch of 16,000 pounds Scoop Tram of 8 tons Front Carrier Mining Car Rockbreaking Drill of 2,000 FT LB Units 24 2 15
Grupo Mexico Purchase Orders by Mine for 2011 Project: Minerales Metalicos del Norte, Unidad Santa Eulalia Chihuahua Investment: US$2.5 millions Product Backhow with Hydraulic Hammers Carrier for Explosives 20ft. In Height Jumbo Telescope 14 ft. Winch control Systems Hammer 400-700 BPM 135-145 Bar Hydraulic Drilling Jumbo Leg Drill Scoop Tram 6 yards 2 Units 3 15
Major Mexican Mining Trade show 2011 www.expominmexico.com.mx October 26 29 2011 XXIX Convención Internacional de Minería Mundo Imperial Irene Gutiérrez Acapulco, Guerrero T: (52 55) 5148 7528 igutierrez@tcexpo.com.mx
Doing Business in Mexico Direct and personal customer contact Give importance in knowing your client Mexicans like to do business with people they feel comfortable with Gain Mexicans confidence and respect Consistent and regular follow up Each region in Mexico has its own characteristics Commitment to the Market High level of local intelligence
Recommendations Effective local representation Pursue specialty niche markets Agree on communication procedures Make an effort to learn and speak Spanish Service approach (on sight delivery and installation) Friendship plays an important role in Mexico Follow up by fax, e mail, phone and personal visits Address the peculiarities of the Mexican market Preparation, Patience and Persistence
Contact Information Gabriela Esquinca Director of GAES ConsultancyIn-Market Trade Development Consultant (ITDC) Tel: (52-55) 5203 4884 (Mexico City) Fax: (52-55) 5203 5385 ge@gaesconsultancy.com Margaret Vokes Mexico Area Director Ministry of Economic Development and Trade Iternational Trade Branch margaret.vokes@ontario.ca Phone: (416) 314-8243 (Toronto)