Silver (continued)
Mexico’s bonanza silver engine powers up
Mexico is the world’s largest silver producer, accounting for about 200 million oz of the total 850 million oz global annual production. Out of the 743 active silver mines globally, about 20% are in Mexico, the highest in the world, according to Global Data. Canadian companies own 74% of mining concessions in Mexico, with leading players like Newmont, Pan American Silver, Hecla Mining and First Majestic Silver, but Mexico’s biggest player is a domestic one, namely Industrias Peñoles, which dominates with over a third of the supply. Peñoles is the parent company of Fresnillo, the world’s biggest silver producer.
Mexico is home to the largest silver mine in the world by reserves at Newmont’s Peñasquito mine, which contains 868.52 million oz in measured total reserves. The country also holds some of the biggest undeveloped silver deposits in the world, including Cordero with 226 million oz contained silver reserves, developed by Discovery Silver in the state of Chihuahua; Vizsla Silver’s Panuco 222.4 million oz AgEq in Sinaloa; and Terronera, at 47 million oz in contained reserves, developed by Endeavour Silver, also in Sinaloa.
Silver production in Mexico has closely followed fluctuations in spot prices, showing the industry’s sensitivity to margins. Between 2013 and 2016, for instance, production slipped from 5,800 t/y to 5,400 t/y; in the last five years since prices started to recover, production has gone up again to 6,300 t/y. China, the second largest producer, has seen a downward trend from 2021 (at 3,500 t/y) to 2024 (3,300 t/y). Peru and Chile have been quite constant.
Due to growing inflation and low spot prices at under US$20/oz over the past decade, Mexico’s silver industry has been little incentivized to invest in expansions or exploration. However, after two consecutive years of double-digit gains in both 2024 (21.5% price appreciation) and 2025 (so far, at 12% higher prices), a shift is taking place.
The belts that keep giving
Silver has been a part of Mexico’s history for over 500 years, going back to the days of the Spanish Conquistadors. In fact, many of the mines that supply silver today to markets as modern as AI applications have been active for centuries. These are primarily found on the famous Faja de Plata (Mexico’s Silver Belt), a geologically rich region of extensive epithermal silver-gold veins that has delivered over 10 billion oz of silver and 70 million oz of gold since its discovery in the 16th century. Deposits like Newmont’s Peñasquito and First Majestic’s Los Gatos are found here, along with undeveloped discoveries like Endeavour Silver’s Pitarilla project or Discovery Silver’s Cordero project. Accounting for almost half of the silver produced in Mexico, the state of Zacatecas is silver’s zone zero in the world. Durango and Guanajuato are two other main states crossed by this belt.
In this silver epicenter, mining companies are once again animated to find additional ounces. For instance, Canadian company MAG Silver, which owns the tier-one Juanicipio silver mine together with Fresnillo, is focused not only on expanding the life of mine of its flagship mine from 13 years to up to 30 years, but has also started looking at greenfield exploration, with only 10% of the JV ground currently explored.
Unlike Juanicipio, which only entered production in 2023, many of the mines in the region have hundreds of years of history. Yet they still have more to give. In the historic mining town of Temascaltepec, once known as the jewel of the Spanish colony, past producing La Guitarra mine has been brought back into production by Sierra Madre Gold and Silver, who acquired the project in 2023. La Guitarra is part of a larger complex of eight historic mines and three underground mining centers. CEO Alex Langer said the main point of attraction of La Guitarra was not only is near-term production potential, but its district-scale exploration potential, in which it plans to reinvest, with a large-scale drilling campaign in sight for 2026.
Also in the State of Mexico, the Zacualpan mine was mined by Cortés 500 years ago. Canadian company IMPACT Silver has been mining at Zacualpan since 2006, from a small operation, but the district is believed to hold additional exploration potential. In Durango, the Avino silver mine was also discovered by Captain Hernán Cortés' expedition back in 1558. Today, Avino Silver and Gold is mining the asset; the Canadian company is looking to re-process the tailings of the old Avino open-pit mine, mined between the 1970s and 1980s. The tailings hold 6.7 million oz of proven and probable reserves. In Guanajuato, another historic mining district, Guanajuato Silver has consolidated 40% of mining claims, with another 40% being owned by Fresnillo. “We want to make sure that mines like Valenciana, which has been in production for the best part of the last 450 years, continue to exist and be a part of the fabric of Guanajuato for hundreds of years more,” said James Anderson, CEO of Guanajuato Silver.
In Northern Mexico, in the state of Chihuahua, another 500-year-old mine is Batopilas, once Mexico’s highest-grade mine at an average of 1.5 kg/t AgEq. Reyna Silver took over the abandoned mine and still hit a bonanza grade of 1 g/tk AgEq.
As part of their plan to breathe new life into old districts, these silver producers have embarked on modernizations and standardizations that will prove to the markets the remaining potential of their properties. For instance, Guanajuato Silver has recently published NI 43-101 compliant resources for El Cubo, and is looking to rework all resource estimates for its mining operations. This is a popular effort, but not always possible. IMPACT Silver, for instance, cannot maintain an NI 43-101 resource estimate across all of its properties due to the nature of the epithermal veins. “These veins can vary significantly in width, they can pinch and swell from 0.5 m to 22 m; you would have to drill it like Swiss cheese to establish a formal NI 43-101-compliant resource. Instead, we drill on 50-meter centers and maintain a rolling resource plan, ensuring three to five years of available resources at any given time,” explained Frederick Davidson, IMPACT Silver’s CEO.
In another example of somewhat breaking with convention, Sierra Madre Gold and Silver went into production at La Guitarra without a feasibility study, relying on historical production records.
“In a highly recessionary and volatile environment, it is very unlikely we will see lead and zinc mine expansions, which will indirectly impact silver supply when demand is growing. The price of silver could go a lot higher before it starts being seen as cost-prohibitive for use in solar panels."
James Anderson, CEO, Guanajuato Silver
Greenfield discoveries in brownfield districts
The old Faja de Plata belt is also beginning to see increased greenfield activity. For instance, this year Southern Silver Exploration acquired the Nazas property, only 15 km away from Endeavour’s Pitarilla deposit. Southern Silver also owns the Cerro Las Minitas, with a mineral resource of 36.7 million tons that can support a 17-year LOM underground mining operation of 14.3 million ozs AgEq.
However, exploration activity has started to expand beyond the well-known Faja de Plata belt, especially in the Sierra Madre Occidental, which extends from the US-Mexico border to the east-trending Trans-Mexican Volcanic Belt (intersecting with Faja de Plata). This hosts First Majestic Silver's San Dimas mine, as well as large deposits like Vizsla’s Panuco, Endeavour Silver’s Terronera, and Luca Mining’s Tahuehueto, all at advanced stages towards production.
While Mexico’s silver mining history goes back centuries, modern exploration is new. Modern exploration technologies, like advanced geochemical analysis or sophisticated geophysical surveys, had not reached Mexico until 1994, when the country entered NAFTA (the North American Free Trade Agreement) and liberalized the foreign ownership of mining properties. Between 1961 and 1993, foreign investors were limited to 49% ownership of a mining company or concession. As such, miners in the past would simply follow visible vein structures, and if these appeared to “pinch out,” they would perform cross-cuts to try to relocate them. When unsuccessful, they would often abandon the target and move on to the next. This method created many blindspots.
For the past three decades, Mexico has seen a resurgence in mining as modern exploration and mining techniques percolated into the country. This is why much of the exploration today in essentially brownfield, previously mined areas can still count as greenfield exploration. A good example is Vizsla Silver, a company founded in 2017, which took over a project dating back to the Spanish conquistadors. Vizsla was the first to conduct modern, large-scale exploration, making its flagship Panuco project, “a greenfield discovery in a brownfield district,” as founder and CEO Michael Konnert described it.
Vizsla recently graduated from the TSX to the TSXV, becoming one of a dozen or so companies with “silver” in its name on the main board, epitomizing a newfound maturity in Mexico’s silver industry.
Article header image by Luca Mining