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Almaden Minerals (TSX: AMM) has hit a stumbling block in advancing its Ixtaca gold-silver deposit, one of Mexico’s premier precious metal discoveries, towards production.
On Monday, the company received notification from the Mexican federal permitting authority (SEMARNAT) that the project’s initial environmental permit application (MIA) has been denied. Almaden originally submitted the MIA in early 2019.
Reasons cited for not approving the MIA, in the company’s view, include insufficient information regarding the impacts of open pit mining on local environment.
Ixtaca would be a conventional open pit mine with average annual production of 108,500 ounces gold and 7.06 million ounces silver over the first six years
In a statement, Almaden said SEMARNAT appears to have discounted the company’s prevention, mitigation and compensation measures, which were part of the MIA application.
The company also said it is continuing its review of SEMARNAT’s response to the MIA and is evaluating alternatives, which include submission of a revised MIA, continuing dialogue and legal options.
The Ixtaca project is located 120 km southeast of the Pachuca mine, one of the largest gold and silver deposits in Mexico with a historic production of 1.4 billion ounces of silver and 7 million ounces of gold. Almaden discovered the Ixtaca deposit in 2010 after nine years of exploring the area.
According to a 2018 feasibility study, Ixtaca would be a conventional open pit mine with average annual production of 108,500 ounces gold and 7.06 million ounces silver over the first six years.
“We are disappointed with SEMARNAT’s decision. We will review the reasons provided and the factors that may have led to this decision and determine a path to move this project forward,” Almaden CEO Morgan Poliquin said in a media statement.
“We believe that since discovery we have outlined a resource and
ultimately a mineral project that is highly economic, robust and reflective of the ideal that successful mining projects can and should make a significant positive difference for local communities over the short, medium and long term.”
Shares of Almaden dropped 28% by noon in Toronto. The Vancouver-based miner has a market capitalization of C$86.8 million.
