Just as Miners were gearing up for increased production, Mexico lockdown upsets miners' 2020 plans
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On March 31, the Mexican federal government mandated that all non-essential businesses temporarily suspend operations until April 30 due to help curb the spread of the COVID-19 virus.
WPM said all of its counterparties were taking steps at the corporate and operational levels to ensure business continuity, but given the fluidity of the situation, the risk that these operations would be impacted in some way had become too great to continue to rely on the February-issued production guidance.
Newmont Corporation reports that as of April 1, mining has not been deemed an essential activity under the Mexican decree, but that it is engaging with government to better understand the intended impacts of the decree on its operations. As a result, Newmont is undertaking an orderly ramp-down of operations at the Peñasquito mine. Other significant Mexico-based mines on which WPM has streaming deals include the San Dimas and Los Filos mines.
WPM said it was currently generating enough free cash and maintained comfortable debt levels to fund all outstanding commitments, including dividends, as well as providing flexibility to pursue new metal streams.
Fellow Canadian company Agnico Eagle Mines also said Thursday it was ramping down its Mexico operations, including Pinos Altos, Creston Mascota and La India, which would remain suspended until the end of this month. Agnico's Kittila mine, in Finland, is expected to continue operating at normal levels, however, it reported one positive case of COVID-19 in an underground miner which caused several days' disruption last month.
Mexico's highest-grade silver miner Excellon Resources will also suspend all mining, milling and exploration activities at its assets, including the bonanza-grade Platosa silver mine. Critical pumping, safety, security and environmental management will continue during the temporary hiatus.
Meanwhile, Endeavour Silver said it was in the process of suspending operations at all three its Mexico mines, thereby also pulling its 2020 production and cost guidance. For 2020, the company had targeted production of 3-3.5Moz silver and 38,000-44,000oz gold at an all-in sustaining cost, net of gold by-product credits, of US$17-$18/oz silver.
Equinox Gold, which just this week announced it expected to triple output to 700,000oz in 2020, said Thursday it was suspending all mining activity at the Los Filos mine. It will continue to process solution from the heap leach pads and expects output to continue at reduced levels through the temporary suspension.
The company has also temporarily suspended operations at its Pilar mine, in Brazil. Equinox's other producing mines continue to operate normally with COVID-19 safety and preventive measures in place.
It said it was too early to determine the impact on the production guidance and it would provide updates when practical.
