Fortuna Silver’s San Jose mine back at full tilt

Canada’s Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) has resumed operations at its San José mine, in Mexico’s southern state of Oaxaca, as the country begins to lift restrictions imposed to slow the spread of the coronavirus.

Mexico had suspended mining on March 31, as it considered it a non-essential activity. The period was extended to May 30, with the possibility of restrictions being lifted after May 18 subject to approval.

The Vancouver-based silver miner said it was granted approval to restart San Jose on May 25. Production is now at its nameplate capacity of 3,000 tonnes of ore per day, it noted.

The mine churned out 1.57 million ounces of silver and 9,630 ounces of gold in the first three months of the year.

Several other companies, including Newmont Mining (NYSE: NEM), Pan American Silver (TSX: PAAS), Alamos Gold (TSX, NYSE: AGI),  Argonaut Gold (TSX: AR), Sierra Metals (TSX: SMT), Excellon Resources (TSX: EXN) and Torex Gold (TSX: TXG), have either restarted their Mexican mines or plan to do so in the coming days.

Hardest hit metal

Silver has been the commodity hardest hit by mine closures mandated by governments to stop the spread of the coronavirus pandemic.

Mexico, the world’s top producer of the metal, is facing in 2020 one of the deepest recessions in its history as an already weak economy can barely cope with the impact of the coronavirus outbreak.

The country’s economy is forecast to contract 6.7% this year, deeper than during the devastating Tequila Crisis of the mid-1990s, the latest Citibanamex analysts survey shows.

Mexico is responsible for nearly 23% of world production of silver, churning out more than 200 million ounces last year, up from 196.6 million ounces in 2018.

It also has major copper and zinc mines, operated by Grupo Mexico and Southern Copper, and produces a significant amount of gold, making the mining sector responsible for about 4% of the nation’s gross domestic product.