Toronto's Global Reach
Ontario’s miners go global
The closure of Canadian major First Quantum Minerals’ Cobre Panama open-pit mine in November 2023 shook the global mining sector. Cobre Panama was responsible for 1.5% of the world’s copper supply and contributed around 5% of Panama’s GDP. Since coming into operation in 2019, the mine has been marred by protests and legal issues, that cascaded into a Supreme Court decision to halt operations at the mine. In the fallout, Toronto-based streaming and royalty company Franco-Nevada suffered a 30% dip in its share price as it held significant long-term streams in the mine.
The incident has undoubtedly made many of Ontario’s mining companies reconsider their approach to jurisdictional risk. “The main takeaway from the Cobre Panama incident is that we need to keep our portfolio diversified and not put too many eggs in any one basket. We are also focusing our attention on jurisdictions with a strong domestic mining industry rather than countries where the domestic mining industry is still being developed, and therefore, many issues still need to be ironed out,” said Paul Brink, Franco-Nevada’s president and CEO.
Argentina
The uncertainty around the Cobre Panama debacle was compounded by a Panamanian presidential election in May 2024. 2024 has been dubbed the biggest election year in human history by the UN, with half of the world’s population having the chance to go to the polls. This has serious repercussions for the Canadian mining sector’s approach to jurisdictional risk when developing projects abroad. New governments can also mean new opportunities, however, as seems to be the case in Argentina with the Milei government’s efforts to deregulate its mining sector and attract foreign investment to turn Argentina into a major copper player, like its neighbor Chile. “Argentina has had a difficult history in terms of foreign investment, but the current course the government is on is extremely positive. There is terrific geology in Argentina, much of which is undeveloped, and having the Incentive Regime for Large Investments (RIGI) in place will help unlock investment in the mining sector,” continued Brink.
This comes as good news to many of Ontario’s players, such as TSX-listed Lithium Royalty Corp (LRC), which has royalties on Zijin Mining’s Tres Quebradas and Ganfeng’s Mariana mines in Argentina that are expected to soon generate new revenue streams for the firm. “In the hard rock space, we want to grow our portfolio in what we call the ABCs of hard rock - Australia, Brazil and Canada – and in the lithium brine space, we will be looking for opportunities in Argentina. Argentina’s mining industry is becoming increasingly attractive with pro-business and pro-market reforms, which makes it an even more compelling region for LRC,” said LRC’s president and CEO Ernie Ortiz.
In August 2024, Argentina inked a deal with the US to draw more investment and trade in critical-minerals mining, bolstering investor confidence with foreign investment into the country’s exploration sector to reach US$493.4 million by year-end, a 15.7% increase from 2023. Looking to tap into Argentina’s RIGI scheme, Ontario’s McEwen Mining is seeking to advance its renewable-powered Los Azules project in San Juan province through its ‘McEwen Copper’ subsidiary. Emboldened by falling inflation rates, reduced taxes and sweeping fiscal reforms, McEwen Copper is devoting up to US$2.5 billion to advance Los Azules, with construction slated for as early as 2026. “The new legislation is attracting large foreign capital, as evidenced by Rio Tinto acquiring Arcadium Lithium for US$6.7 billion and BHP closing a US$4.4 billion deal with Lundin Mining, and I believe this is just the beginning. We are seeing many positive measures enacted by the government,” shared Rob McEwen, chairman and chief owner, McEwen Mining.
With environmental permits secured, the next step for the project is to complete a Feasibility Study in the first half of 2025. Thereafter, McEwen Copper may have to return its focus to Toronto’s Bay Street to secure the funding for the gargantuan project: “Once these milestones are achieved, we plan to proceed with an IPO on the TSX, provided that market conditions are right,” continued McEwen.
Spurred on by positive signals from the Milei government and large investments into the country by big players such BHP, the newly TSXV-listed exploration company Mogotes Metals is hoping to discover the next big copper-gold deposit at its Filo Sur project in the Vicuña district, near the Argentina-Chile border. Despite the challenging Andean terrain, exploration activity is booming. “While working in high-altitude environments presents challenges, we have been fortunate with excellent infrastructure, including road access, a reliable water supply for drilling and camp operations, and minimal logistical hurdles to date. Looking ahead, larger companies are expected to develop mines in the region before us, and their infrastructure developments will provide advanced support systems that will benefit our future operations,” said Allen Sabet, CEO, Mogotes Metals.
When questioned on the prospects of Argentina’s mining potential, almost all interviewees featured in this report were extremely bullish – from equipment suppliers seeking to expand abroad to leading financiers. “The Vicuña District is clearly positioned to become one of the world’s next key sources of copper in a market facing a significant medium- to longer-term supply deficit,” said Stefan Ioannou, base metals analyst, institutional equity research, Cormark Securities.
“Being based in Toronto allows us to tap into this thriving community and its resources, making it a natural fit for our corporate headquarters.”
Allen Sabet, CEO, Mogotes Metals
Mexico
Mexico is another Latin American nation that has seen a change in leadership in the past year with President Claudia Sheinbaum taking over from Andrés Obrador. This change has many Canadian miners holding their breath, as the jurisdiction was clouded in uncertainty for years with a de facto ban on permitting for open-pit mines. Fresh off the acquisition of Sabre Gold Mines, Toronto-headquartered Minera Alamos is looking to permit its Cerro de Orro mine in Zacatecas State so as to commence production in 2026. “The same party and coalition are in power, just with a different head, and investors have not received all the comfort and clarity they are seeking. In taking over leadership, President Sheinbaum wants to protect her predecessor’s legacy whilst still charting her own path,” said Minera Alamos’ president Doug Ramshaw.
Underground projects, such as Alamos Gold’s Puerto Del Aire (PDA) project, adjacent to its producing Mulatos mine in Sonora State, are more likely to pass the permitting process. Alamos Gold seems confident in the project, having recently announced positive drilling results that could potentially triple the mine life of the Mulatos district. “At our PDA project in Mexico, reserves have expanded to over 1 million oz, and we are advancing with permitting to enable construction in 2025,” said Alamos Gold’s president and CEO John McCluskey.
While Alamos’ PDA project nears construction, Mexico’s newest mine, Torex Gold Resources' (Torex) Media Luna, commenced production in February 2025. The nearly US$1 billion project is expected to generate positive free cash flow in mid-2025 and add 10 years of mine life to the Morelos property. This new cash flow will be critical in the coming years, as Torex has set its sights on developing another major project at Morelos – the EPO deposit. “The cash flow potential of Morelos is unparalleled, and at today’s spot prices, we will be generating US$400 million a year of free cash, part of which we will reinvest in exploration at Morelos as we have only just scratched the surface there. We will also return capital to shareholders, and we will look at opportunities for growth beyond Morelos,” shared Jody Kuzenko, Torex's president and CEO.
Despite the permitting obstacles in getting new mining projects going in Mexico, for those that succeed, mine owners in Mexico can reap the benefits of lower labor costs, proximity to Canadian and American markets, and abundant mineral reserves.
“The appropriate way to manage jurisdictional risk is diversification. Certain countries may struggle with political stability, but they have great quality projects, great talent in mining, and they know how to operate.”
David Awram, Co-Founder and Senior Executive VP, Sandstorm Gold Royalties
Cuba & Guyana
Unlike Argentina and Mexico, Cuba’s one-party communist system and strained US relations make it a far less common jurisdiction to find Canadian mining operations. Nonetheless, the near-century-old Canadian company Sherritt International has operated the Moa mine and nickel upgrade facility in the island nation, where it has been involved in a JV for 30 years. While the longstanding US embargo on Cuba has certainly made operating in the country more challenging, efforts to mitigate China’s dominance in critical mineral supply chains could potentially provide an avenue for Cuba to play a larger role in North American nickel and cobalt markets, given its strategic geographic location. “This shift away from Chinese and Russian supply chains creates an opportunity for Cuba to become a key supplier for North America, much like Indonesia’s relationship with China. Sherritt is one of the few players with technical expertise to develop refining capabilities outside of China, making our Cuban mine a key asset in the energy transition and supply chain diversification in North America,” said Leon Binedell, president and CEO, Sherritt International.
This adaptability of Canadian miners is also evident in South America, where the resource boom in Guyana has drawn significant attention from investors. With its major oil discoveries driving the highest GDP growth globally, Guyana has become a hotspot for mineral exploration, particularly in the untapped Guiana Shield. TSX-listed G2 Goldfields (G2), for example, managed to raise C$42 million in the summer of 2024 to fund an ambitious drilling program in the Oko area. Having recently spun out some non-core assets through its ‘G3 Goldfields’ subsidiary, G2 is now focused on releasing an MRE for its core OKO project. G2’s CEO Dan Noone already has ideas for the company’s next potential move: “We are monitoring our neighbor, who is approximately 12 months ahead in their environmental and regulatory approvals and is targeting permits by mid-2025. There are potential synergies between our projects, and there may be an opportunity to align our operations, with the next six months being crucial in determining how these elements come together.”
“Guyana’s geological appeal is further supported by its favorable investment climate. As an English-speaking country with a judicial system based on British law, it offers a stable and familiar environment for international investors.”
Dan Noone, CEO, G2 Goldfields
Canadian exploration
Closer to home, Ontario’s explorers continue to make discoveries from the rugged coastal mountains of BC to the harsh arctic tundra of Nunavut. One such is Aston Bay, which has been advancing its flagship Storm Copper project in a JV with Australia-based American West Metals. The two companies are devising ways to navigate the challenging and remote geography and hope to release a PFS in early 2025 to then commence the permitting process. “Although we have thousands of tons of copper at the surface, it holds no value unless we can efficiently bring it to market. Our partner, American West Metals, understands this and planning is underway to use innovative methods to economically extract, process and ship the high-grade ore, moving away from traditional methods that may not work well in the Arctic environment,” shared Thomas Ullrich, CEO, Aston Bay.
As climate change continues to thaw Arctic ice creating new shipping lanes, analysts predict that the region will play an increasingly important role in global geopolitics, which could lead to increased infrastructural investments and governmental support for projects in Canada’s far north. “The US government has expressed interest in our strategic location near the Northwest Passage. This area is crucial for North American sovereignty and a source of critical metals, leading to grants from US entities for companies developing critical mineral mines in the region,” continued Ullrich.
In BC, Seabridge Gold’s gargantuan Kerr-Sulphurets-Mitchell (KSM) gold and copper project obtained its “Substantially Started” designation, meaning its permits are no longer at risk of expiring in 2026. This de-risking gives Seabridge Gold a clearer path to completing a JV with a major mining company that can help bring the financial and technical muscle to develop the world’s largest undeveloped gold and copper project (by resources). Rudi Fronk, Seabridge Gold’s chairman and CEO, shared some of the challenges of undertaking the project: “Permitting a massive project like KSM costs more and takes longer than exploring to find it. The major companies are scouring the globe for potential new projects, especially in critical metals like copper, and before they spend the effort to evaluate the technical merits of a project, they want to know if it has a reasonable path to permits.”
With close to a billion dollars invested in KSM since acquiring it in 2001, Seabridge Gold is being very selective with who it partners to complete the project. “Our JV partner must have a track record of building and operating mines of a similar scale to KSM. In addition, our partners will need to have a strong enough balance sheet to raise the capital externally or sufficient cash flow from operations to internally fund the development of KSM. From a social perspective, we are looking for a proven track record in dealing with ESG matters,” continued Fronk.
Like Seabridge Gold, New Gold has also invested significantly in BC – commissioning its C-zone development at its New Afton property. Despite early challenges brought about by the Covid pandemic, the project was delivered ahead of schedule, announcing commercial production in October 2024, pushing the mine to outperform its guidance for the year. “The biggest milestone at New Afton was the commissioning of the gyratory crusher and conveyor system eight weeks ahead of schedule in October 2024, setting up the C-Zone for high capacity, low-cost, low-emission ore transportation for the life of the mine. We will take advantage of the existing excess processing capacity at our mill to ultimately process 16,000 t/d from C-Zone,” shared New Gold’s president and CEO Patrick Godin.
Despite the global uncertainty brought about by a record number of elections and ongoing conflicts, Toronto’s reach continues to extend across the globe.
Article header image courtesy of McEwen Mining