Mexico Copper Output to Rise 5 Per Cent

2010 Production To Hit 250,000 Tonnes

Grupo Mexico Sees Country Becoming No 2 In World

Mexico’s copper output is expected to be 250,000 tonnes in 2010, a rise of 5% over the 2009 figure, according to the head of Grupo Mexico’s mining division, Xavier Garcia de Quevado told reporters on Wednesday.

He added that this figure did not include any output from the company’s Cananea mine near the US border, which has been shut for almost three years due to a strike by the mine’s workforce. A court recently ruled against the strike, but the union has refused to end its occupation of the facility.

Mr Garcia de Quevado said that the strike was blocking $5 billion in investments planned by Grupo Mexico for Cananea and the El Arco project in Baja California. The $2 billion El Arco is expected to start production on 2012; copper mined there and at other sites owned by Grupo Mexico would probably be sent to Cananea. Capacity at El Arco would be around 190,000 tonnes per year.

Cananea itself is line for a $3 billion investment which will boost output to 460,000 tonnes a year from the present 190,000 tonnes. Once El Arco and Cananea are working at full capacity, it is expected that Mexico will become the world’s second-largest copper producer behind Chile. Grupo Mexico is the country’s largest copper miner.

However there is no indication as to when Cananea will reopen. Despite the recent court ruling Mr Garcia de Quevado could not say if and when the unions are likely to hand back the facility to its management and indicated that the unions are still refusing to back down in the dispute, which is over health and safety issues.

Xtierra Raises $500,000 For Mexican Project

Feaisibility Work To Place At Bilbao Project

Toronto-based Xtierra Inc. has closed the second tranche of a private placement for additional gross proceeds of $500,000.

This portion of the placement was purchased by TayCon Capital Corporation, a capital pool company under Policy 2.4 of the TSX Venture Exchange. The shares and warrants acquired will be distributed to the approximately 300 shareholders of TayCon Capital Corporation in proportion to their shareholdings and TayCon will be dissolved.

Proceeds of this issue, together with the $3.955 million raised in the first tranche closed on 1 March 2010, will be used by Xtierra to fund further metallurgical testing and feasibility work on its Bilbao silver-zinc-copper project in Zacatecas, Mexico, and for expenses of the offering, general corporate purposes and working capital.

Grupo Mexico Shuts San Luis Potosi Copper Smelter

Grupo Mexico copper-mining subsidiary, Southern Copper, said on Friday it had closed its copper smelter in San Luis Potosi, Mexico.

In a filing with the U.S. Securities and Exchange Commission Grupo Mexico said that all 300 workers at the smelter, which had been used to treat copper concentrate from a number of mines in Mexico, will be laid off.

No reason was given and the company expects no material charges due to the closure.

The smelter had an annual capacity of 230,000 tonnes per year, according to the company's website.

Oz, Azure Agree To Mexico Joint Venture

Australian mining firms Azure Minerals and OZ Minerals have signed US$13 million joint-venture agreement on Azure’s 100%-owned San Eduardo property in Sonora Mexico.


Azure’s executive chairman, Mr Tony Rovira, welcomed the interest of one of Australia’s premier mining companies as confirmation of the high quality of Azure’s Mexican projects.

Mr Rovira said, "We are delighted to have attracted OZ Minerals to the Sierra Madre Occidental district of northern Mexico, which is one of the world’s great mining provinces.

“To secure the involvement of OZ Minerals in this exploration project is a strong vote of confidence in Azure’s on-going program of regional exploration, target identification and project staking, confirming the effectiveness of our exploration team in Mexico. This Joint Venture will enable Azure to accelerate our exploration programs and develop our projects.”

To earn an initial 51% participating interest in San Eduardo, OZ Minerals will spend US$3,000,000 over the next 3 years, with a minimum commitment of US$300,000 to be expended within the first year. OZ can earn an additional 19% participating interest in the project by spending a further US$10,000,000, taking its total equity to 70%.

The San Eduardo property is a granted mineral concession covering 201km2. It adjoins Azure’s 100%-owned El Tecolote project and is situated 10 kilometres west of Azure’s La Tortuga property (subject to an earn-in joint venture with JOGMEC).
Historical sampling by the Mexican Geological Survey at Alejandra collected a 40 channel samples of wall-rock, returning an average grade of 25 g/t Ag, 7.34% Pb and 1.89% Zn, with maximum values of 80.9 g/t Ag, 20.04% Pb and 5.45% Zn.
Planning of the San Eduardo work program is at an advanced stage and field work will commence shortly. Phase 1 will comprise geological mapping and surface sampling, an airborne magnetic and radiometric survey, Induced Polarisation (IP) surveying and drilling.
This involves a minimum expenditure commitment of US$300,000, which will be sole-funded by OZ Minerals, and is expected to be completed by the end of 2010.

Tara Minerals To Commence Production At San Felipe Vein

Tara Minerals has announced that is to advance the San Felipe gold and silver vein into production. The company has commenced a mine development plan and is enhancing the current mill design to incorporate the production of Gold and Silver concentrates. To date approximately 800 tonnes of material has been mined from San Felipe.

San Felipe is a Gold and Silver quartz vein located 1.5 km southeast of the Don Roman mine and mill near the town of Choix in Sinaloa state, Mexico. Recent channel samples returned an average grade of 10.06 grams per tonne Gold and 149.85 grams per tonne Silver.

The Don Roman mill is currently processing silver, zinc, and lead at a rate of 240 tonnes per day, which will be expanded to 360 tonnes per day by commissioning a third circuit. Further expansion will give a total plant production capacity of 660 tonnes per day. The expansion projects are anticipated to begin on 1 April this year and will be completed within nine months. The processing and sale of silver, zinc and lead concentrate will continue during the expansion work.

Tara Minerals President Francis Biscan Jr said "With the strong economics of the San Felipe Gold and Silver vein and the strategic location of this structure to our existing plant, we expect to achieve an expeditious return on investment. With the development of San Felipe, we will add to the diversity of metals produced, add substantial cash flow beyond our original expectations, and give our shareholders leverage to the Gold price."

Ineos Sells Fluor Arm To Mexichem

Refrigerant producer Ineos Fluor group is to be sold to Mexichem Fluor SA in a deal which will bring together the world's largest fluorspar supplier and HF producer with a worldwide fluorochemicals company.

Ineos Fluor supplies fluorine-based products and services for the refrigeration and air-conditioning sector and employs 350 people in Europe, North America and Asia while Mexichem is a Latin American producer of PVC pipes and resin, chloralkali, hydrofluoric acid and fluorspar.

The deal comprises the international business and assets related to Ineos Fluor operations in North America, Europe, and Asia.

David Price, CEO Ineos Fluor said: "Whilst performing well, the fluorochemicals business no longer fits within the Ineos group portfolio as it focuses its attention on its large-scale petrochemicals businesses.The agreement presents a unique opportunity to bring together the world's largest supplier of fluorspar, with our own world leading fluorochemical production assets, customer base and research capabilities."

Mexichem CEO Ricardo Gutiérrez Muñoz said, “Acquiring Ineos’ Fluorochemicals business reflects our ongoing strategy to add value to our main raw materials through vertical integration in more added value products, expanding our product range and extending the global reach of our fluorine products business.”

The sale is expected to be completed at the end of March subject to necessary regulatory approval and on completion will become a global producer of speciality fluorochemicals with annual sales revenue of over US $500 million.

Dia Bras Announced Lower Output At Bolivar Project

Montreal-based zinc miner Dia Bras has announced a fall in zinc production at it Bolivar pilot mine in Mexico.

Output for the year fell by 7.29% to 17,686,209 pounds. The average price per pound received fell from 85c to 75c. Copper output fell further – by almost 19 % to 3,854,688 pounds at an average price received down by 26% from $3.15 to $2.33 a pound.

“At this point, the working capital position of the Corporation has improved dramatically”, said Daniel Tellechea, President and CEO of Dia Bras, “standing at a positive $3.1 million (US$ 2.9 million) versus a negative $7.4 million (US$6.1 million) at the end of 2008. And inside of our net positive working capital are old liabilities of EXMIN, assumed in September, 2009, amounting to $890,000 (US$851,000), which we are committed to dealing with in 2010. During 2009, the Corporation raised $12.4 million (US$10.8 million) and invested approximately $10.2 million (US$9 million) of that in working capital, equipment and development of our mines, etc., yet we see a dramatic increase in working capital, a reflection of our improved operations and cost cutting.”

Zinc grades increased by 25.7% and copper grades by 9.7%, to 10.06% and 1.81% respectively.

Southern Copper Sees Prices Remaining Strong In 2010

Southern Copper Corp - a subsidiary of Grupo Mexico - said on Tuesday it expects average copper prices of $3.25 per pound in 2010, as it expects demand to be boosted by emerging and developed economies.

The price of copper rose 140 percent in 2009 on strong Chinese buying and supply concerns, but fell 8.5 percent in January as rising inventories suggested demand outside China was weak. Current price is a little over $3 a pound.

"We believe that inventories of copper will start to die off during the year, reversing the last month's trend," Southern Copper's Chief Financial Officer Genaro Guerrero said on a conference call with buying from emerging economies like China supporting prices through this year. Mr Guerrero also said that he expected consumption to rise in developed countries.

Southern Copper estimates copper production for this year at 500,000 tonnes, slightly above the 485,376 tonnes it mined this year, with molybdenum production forecast at 18,500 tonnes, in line with last year's output. Zinc sales this year are expected to be around 110,000 tonnes and silver sales to come in near 16 million ounces.

The company's 2010 copper forecast does not include potential output from the Cananea copper mine in Mexico, which usually produces around 20 per cent of the company’s copper but which has been closed by a strike for two years. The company was not able to give an estimated date for production to re-commence at Cananea.

Earlier this week copper trader Mr David Threlkeld said he expected the price of copper to plunge to around $1 a pound as he believed there to be much higher inventories than have been reported.

Zinc National Acquire Steel Dust Recycling LLC

Mexico's Zinc Nacional SA has announced the acquisition of Steel Dust Recycling LLC, a recycler of electric arc furnace dust.

SDR uses the Waelz Kiln process to convert EAF dust to waelz zinc oxide. Its Millport facility in Alabama is located in a concentrated area of EAF steel production.

Zinc Nacional said that the goal of the acquisition is to enable the company to more closely service the steel mill industry in the US while also contributing more zinc units for the production of zinc oxide and zinc sulfate.

A Zinc Nacional spokesperson said that “We are excited about the creative synergies that will be generated by our decision to maintain the management team that built and operated SDR and the addition of the experienced management and production personnel of Zinc Nacional.”

Source: Steel Guru

Cotton And Western Sets Mexican Iron Ore FOB Price At USD45/MT

Chinese steel makers (fuelled by the hundreds of smaller steel mills) have greatly exceeded the China Sea Borne Trade expectations by setting a record import of 52.8 million metric tons of iron ore in March.

It is not entirely surprising given that the smaller mills with less overhead expense can produce a number of lower end steel products as opposed to the larger mills specializing in high end steel products, (i.e., the auto and petroleum industries, which demands are still down world-wide) and with larger overheads.

The 2009 annual fixed contract prices have not yet been agreed upon between China's major steel mills and the Big 3 producers; however, Cotton & Western has concentrated its efforts in financing the Baja iron ore project through negotiations with smaller steel mills that have a need for a steady supply of quality iron ore. The company has reached an agreement for a base price of $45.00 per dry metric ton, FOB, Ensenada, Baja California, Mexico, less a per ton discount for financing the project together with exclusive rights to the iron ore production from Baja Nos. 4 and 14.

C&W's 2009 fixed price represents approximately a 40 to 45% reduction on the 2008 prices, FOB Mexico.

Source: Market Watch (press release)

Boleo Project To Cost $100Mn Less To Build

Indications are that TSX-listed Baja Mining's Boleo project, in Mexico, may cost just $767-million to build, an improvement of more than $100-million from the firm's April 2008 estimate of $872-million, the company reported on Monday.

The figures do not include working capital and financing costs.

Baja announced in October that it would delay development of the copper/cobalt/zinc mine until market conditions improved, and is now able to take advantage of reduced input costs, the firm said.

Baja is working with its Korean partners on the project to come up with a new cost estimate.

The company has prepared a revised scope of work on an engineering, procurement and construction management basis, and has also requested proposals from several qualified engineering firms.

The tender will close at the end of March, and Baja expects to appoint an EPCM contractor in the second quarter.

The first tasks will be the preparation of a revised independent capital cost estimate and revised project schedule and Baja project staff will help with the process, in an effort to have the work completed in the third quarter.

Following this, a target price will be established for the EPCM contract, and development of the project is expected to resume as soon as the necessary financing has been arranged.

Commissioning is still targeted for 2011, the firm said.

Vancouver-based Baja agreed in April last year to sell a 30% stake in the Boleo project to a consortium led by Korean State-owned Korea Resources Corporation, to help fund the mine's development.

The average annual production for the first four years at full operating capacity is expected to be 56 000 t of copper cathode, 1 500 t of cobalt cathode and 20 000 t of zinc sulphate.

The project has an expected mine life of over 25 years.

Source: Mining Weekly

Farallon Ships Concentrates To Asia

Vancouver-based Farallon Resources announced on Monday that it has begun shipping zinc, copper and lead concentrates from the port of Manzanillo, in Mexico, to smelters in Asia.

Farallon has been transporting concentrates to port from the G-9 mine at Campo Morado since October 2008 and shipped the first concentrate, bound for South Korea and China, on February 12.

"The commencement of vessel shipments is yet another significant milestone in the overall development of the G-9 Mine,” said president and CEO Dick Whittington.

The mine is expected to reach design capacity of 1,500 t/d this month.

In June 2008, the company signed a heads of agreement with international trading company Trafigura Beheer BV Amsterdam, covering treatment of 100% of the copper, lead and zinc concentrates produced from the G-9 project.

Source: Mining Weekly

Great Panther Forecasts 20percen Rise In Silver Production

VANCOUVER, BRITISH COLUMBIA - GREAT PANTHER RESOURCES LIMITED (TSX: GPR) (the "Company") forecasts a further 20% increase in silver production in 2009 above the record 1.214 million ounces produced in 2008 from its two 100% owned silver mines in Mexico. The estimated total metal production for 2009 includes 1.45 million oz of silver, 6,000 oz of gold, 750 tonnes of lead and 840 tonnes of zinc, or 2.07 million oz silver equivalent (Ag Eq Oz), up from 1.81 million Ag Eq Oz in 2008. (Note: The Company will continue to provide silver equivalent totals but the volatility of metal prices in recent months has made this an inconsistent basis for comparison with past and future production. The Company has used metal prices of $11/oz Ag, $850/oz Au, $0.50/lb Pb and $0.50/lb Zn for 2009 silver equivalent calculations.)

The cash operating cost per oz of silver, net of by-product credits, is estimated to be in the range of US$7.00 to US$7.50 per oz for 2009, well below current and projected prices, and a significant improvement on the estimated cost of US$11.00 for 2008 (based on unaudited figures). The cost per oz of silver is dependent upon not only mine site operating costs and silver production, but the cost of smelting and refining, the relative value of the Mexican peso against the US dollar and the value of by-product credits. During 2008, these unit costs were adversely impacted by severe increases in smelting and refining costs and the fall in metal prices, which reduced the value of by-product metals, specifically gold at Guanajuato and gold, lead and zinc at Topia.

The changes forced on Great Panther's operations by the sharp downturn in metal prices mean that both the Guanajuato and Topia Mines are emerging from 2008 much leaner and more efficient, with lower costs and yet with excellent potential to increase production further in 2009.

US To Ban Mexican Iron And Steel Products

Mexico's steel manufacturers claim that the USA is to implement a trade protection policy to prohibit the use of Mexican iron and steel materials in infrastructure construction.

The Mexican Iron and Steel Producers Association said that the introduction of this policy violates the North American Free Trade Agreement and World Trade Organization’s relevant provisions of free trade. Mexico's Ministry of Economic Affairs has been requested to intervene in this matter.

The introduction of the policy will result in a sharp fall in Mexico's steel exports to the United States.

Record Production For Capstone

Capstone Mining Corp. today reported that its Minto and Cozamin mines produced 74.1 million pounds of copper in concentrates in 2008. Capstone also reported achieving commercial production, effective January 1, 2009, of the most recent expansions at its Cozamin mine in Mexico and Minto Mine in Canada. With commissioning essentially complete at year-end for both mines, Capstone is now focused on fully realizing the benefits of expanded production levels at its mines for the full year, and is forecasting production of 95 million to 105 million pounds of copper contained in concentrates in 2009 at a total cash cost of approximately US$1.00 per pound.

"Capstone's two high grade copper mines both successfully completed their expansions by the end of 2008, increasing combined throughput by 140% since the Cozamin and Minto mines were originally commissioned in mid-2006 and mid-2007, respectively," said Darren Pylot, Vice Chairman & CEO of Capstone. "With the expansions complete, we are now focused on fully optimizing the output and production costs of both operations, with the objective of maximizing profitability. Cash flow from our operations is further enhanced by a robust forward sales program, where we have 104 million pounds of copper forward sold at an average price of US$2.52 per pound."

"In addition to its production activities, Capstone is completing major resource updates for both of its mines and its high grade Kutcho copper project; conducting the required work to support its Phase IV expansion at the Minto Mine based on increased resources and throughput; evaluating opportunities to redesign the Kutcho copper project as a robust, low cost operation; and continuing its highly successful exploration emphasis," said Stephen Quin, President & COO. "We aim to continue our organic growth, which has already seen two successful expansions at each of our mines in a short period of time, supported by strong resource increases, as well as look at external growth opportunities, backed by low cost production and a robust hedge book."

Southern Copper Posts Fourth Quarter Loss

Southern Copper Corp, the Grupo Mexico unit that is one of the world's largest copper producers, posted a fourth-quarter net loss on Friday and slashed its 2009 capital and exploration budget amid plummeting metals prices.

The company reported a net loss of $124.7 million, compared with a profit of $310.9 million a year earlier on net sales down to $449.7 million from $1.294 billion.
For the full year, Southern Copper said net profit totalled $1.406 billion, down from $2.216 billion in 2007.

Profit fell on lower copper prices, which have plummeted in the global financial crisis. The company said the crisis has caused it to scrutinise or stop new projects.
For 2009, Southern Copper slashed its capital and exploration budget to $415.3 million from a prior estimate of $1.07 billion.

The company is currently evaluating putting on hold or stopping its Tia Maria project and has delayed spending at its Toquepala mine expansion project. Its metals projects at El Arco, Los Chancas and Angangeo remain under evaluation.

Grupo Mexico To Take Hit On Copper Price Plunge

Mexico's largest mining company, Grupo Mexico SAB, looks set to reduce the value of its booked copper sales in the fourth quarter after a plunge in copper prices.

The company records sales under a method known as provisional pricing, where sales on copper concentrate are booked at the time of shipment but are altered to reflect market prices when payment is received. Copper prices have fallen by almost two-thirds since hitting a high of $4.2605/lb.

“There will be an impact and it will be considerable,” said Juan Rebolledo, a spokesman for Grupo Mexico said.

However, Mr Rebolledo also said that the adjustment may be offset by hedges and exchange-rate fluctuations, Rebolledo said. The company is set to report fourth-quarter earnings on 30 January.

Rodrigo Heredia, an analyst with Ixe Casa de Bolsa SA, estimates the pricing adjustment could cause net income to fall 62 percent to $80 million in the quarter. with the price of recorded sales of copper and molybdenum cut by $231 million. The adjustments are limited to the fourth quarter and are unlikely to be repeated, he said.

Cotton And Western Says Baja Iron Ore Mine Still Viable

US miner, Cotton & Western says it is receiving many inquiries for high grade magnetite iron ore from its mine at Baja California, Mexico.

The company's funding source has asked for re-price negotiations to begin in February 2009, but despite the recent fall in the price of iron ore, the company is hopeful of an upswing by the time production begins at the mine.

Cotton & Western say the project is still economically viable at 2004 contract prices.