Many Australians researching journey to Latin America little doubt come throughout warnings on the federal Smartraveller web site about regional terrorism threats, corruption, and potential civil and political unrest.
One nation routinely battling damaging stereotypes – as an alternative of constructive information of its mining belongings and potential – is Mexico, as a consequence of drug cartel-related violence in states together with Baja California, Chiapas and Sinaloa.
However what about Argentina, Brazil, Colombia, Ecuador or Peru? Too far-off? Important potential for corruption or political instability? Not a threat price taking?
Regardless of these perceptions in regards to the area, a rising variety of listed juniors from Western Australia – together with Challenger Gold, EV Assets and St George Mining – are defying these stereotypes to faucet the area’s huge sources and affluent orebodies.
Talking from the Peruvian capital of Lima, EV Assets managing director Hugh Callaghan’s ardour for mining and other people within the area is evident.
Subiaco-based EV has utilized substantial focus to its Parag copper-molybdenum challenge in Peru and not too long ago acquired a 70 per cent stake within the Los Lirios antimony mine, positioned 318 kilometres south of Mexico Metropolis within the state of Oaxaca.
“The rationale why we’re right here [Latin America] is that I don’t suppose there’s a greater location on the planet to seek out excellent orebodies,” Mr Callaghan instructed Enterprise Information.
“Whether or not you’re a junior or a much bigger firm. [This is also] coupled by excellent abilities, each at a employee {and professional} stage.
“I additionally discover it an excellent place to work from a regulatory viewpoint. We’ve managed to get group agreements and licences at file pace.
“As a result of should you do it correctly in a honest and diligent method, it’s a really fast place to work in comparison with say Australia, Canada, US or different nations.
“I simply suppose it’s the standard of the orebodies that’s the differentiating issue.”
One other eager to make develop alternatives within the area is Kris Knauer-led Challenger Gold, which is concentrating on manufacturing at its Hualilan gold challenge in San Juan, Argentina.
The West Perth-based junior additionally has a sequence of copper-gold pursuits in Ecuador.
Mr Knauer mentioned current adjustments by Argentina’s president, Javier Milei, who was elected in 2023 when the nation’s annual inflation fee was round 211 per cent, had enhanced Challenger’s operations.
“By way of working as an explorer, once we first began … what you actually had in Argentina was a managed foreign money regime the place there’s two trade charges,” Mr Knauer instructed Enterprise Information.
“You’ve received the official and the non-official, and there was a fifty to sixty per cent unfold.
“For us, we had been bringing in US {dollars}, changing them into [Argentine] pesos on the non-official [rate] and successfully your exploration {dollars} go fifty per cent additional, which is nice.
“The problem while you get into operation is, beneath the previous regime, you needed to convert and maintain your gold gross sales into pesos.
“That’s why loads of Argentinian miners for the previous two or three years haven’t had a good time of it, however that’s all modified now.
“You’ve received a brand new president. He’s minimize loads of purple tape and really launched a brand new incentive regime for bigger mining initiatives and different initiatives, the place you now not need to convert your gross sales into pesos, which is useful.
“The opposite factor is, as a result of he’s fastened up the economic system, they aren’t operating 100 per cent inflation, that unfold between the official and non-official has received proper down to 10 to fifteen per cent.
“So, as somebody that’s about to be producing, it’s a reasonably good working setting.”
Working inside a pro-mining jurisdiction has additionally paid off for St George Mining at its not too long ago acquired Araxá niobium-rare earth components challenge in Brazil.
“The truth that it’s in Minas Gerais, the most effective mining state in Brazil and one of many high mining jurisdictions on the planet, is extraordinarily useful,” St George government chair John Prineas instructed Enterprise Information.
“We’ve signed a cooperation settlement with the state authorities to expedite our challenge approvals, so [it’s been] a really refreshing strategy from authorities.”
Staffing
One of many greatest challenges in South America will be in working in a jurisdiction with little or no native information.
Because of this Challenger, EV and St George have taken steps to rent skilled native personnel with in depth expertise for work on the bottom.
“Yeah look, , we did make a few errors at the beginning,” Mr Knauer mentioned.
“We had a workforce in Ecuador and we introduced them as much as do some preliminary exploration work in San Juan.
“We in a short time labored out that you simply don’t convey expats in. You’ve actually received to make use of locals and they are often supervised by expats.
“The federal government would really like eighty per cent native employment from the province of San Juan, which, as we kind of received into it isn’t truly that onerous, as a result of there’s some top-quality mining folks.
“The Nationwide College of San Juan runs a reasonably good course. We’ve partnered up with them, so we’ve received most of our senior geologists now come out of there, and we educated them once they had been college students.”
On February 27, Challenger introduced the appointment of Bira De Oliveira as common supervisor of operations at Hualilan; a transfer Mr Knauer mentioned would get the challenge on track.
“[Y]ou want expertise to handle a workforce like that,” he mentioned.
“He’s owner-operated, he’s contract mined, he’s run mines for among the greatest firms on the planet, together with AngloGold Ashanti and First Quantum Minerals.
“However he’s additionally run smaller owner-operated mines in Uruguay and a few different areas in South America, together with Brazil.
“He’s fluent in Spanish, which you should be, so Bira’s a key appointment. He’ll work with Sonia Delgado, who’s our government director primarily based in Argentina. Collectively they may do the whole lot we have to do to stand up, operating, and delivering ore on vehicles by [the] finish of the third quarter.”
Mr Knauer can also be in good firm at board stage.
EV Assets is displaying there’s much more to Mexico than cactus vegetation and cartel wars. Photograph: Andrés Sanz
Alongside non-executive chair Eduardo Elsztain, one among Argentina’s wealthiest folks, are government vice-chair Sergio Rotondo and Ms Delgado, who has a masters diploma in labour regulation.
Previous to its acquisition of Araxá in February, St George finalised a sequence of key appointments for its in-country workforce, with a lot of them possessing in depth expertise from time with Companhia Brasileira de Metalurgia e Mineração (CBMM).
Amongst these appointments was Ricardo Maximo Nardi, a former head of mineral processing at CBMM.
“Mr Nardi is one among, if not essentially the most, educated and skilled engineers on the planet in processing niobium ores,” Mr Prineas mentioned whereas saying the rent.
CBMM, positioned adjoining to Araxá, is the world’s largest producer of niobium.
In August final 12 months, St George additionally appointed Adolfo Sachsida, Brazil’s former minister of mines and power, as an adviser to its board.
Cash speak
Except for the challenges of elevating capital, Mr Callaghan mentioned there was usually one other vital hurdle to beat.
“Convincing buyers Latin America is low-risk, low-cost and an excellent place to work,” he mentioned.
“There’s an immense ignorance about it. And paired with this phrase I someway hold listening to that it’s too far-off; I’m unsure what meaning, it doesn’t make a lot sense to me.
“I see the largest easy problem is definitely elevating capital, to be sincere.
“Which is foolish, as a result of should you take a look at [the] orebodies of high quality which can be accessible, excessive grade and are capable of be developed, it’s a really marvellous setting.”
Mr Prineas mentioned St George had been capable of minimise a few of its challenges up to now in Brazil because of the pro-mining nature of Minas Gerais.
“In all places has received challenges to mining I suppose,” he mentioned.
“The realm we’re in is definitely a longtime mining area, so loads of the impediments to establishing a mining operation have already been handled by others.
“It’s not like we’re in the course of the Amazon or another pristine setting, so we actually received a head begin there.
“Nonetheless, like several jurisdiction, it’s a must to do your environmental research and whatnot, so they’re actually the largest hurdle we’ve got.
“It’s not a giant hurdle, however that’s actually the one factor that we have to cope with earlier than we are able to get our mining licences permitted.”
Late final 12 months, China introduced a sequence of restrictions on the US in relation to the export of essential minerals, together with antimony and tungsten, that are used within the manufacture of bullets and different army tools.
In February, it added molybdenum – which can be utilized to strengthen iron and metal – to this record.
With nations such because the US now searching for different sources of essential minerals exterior of China, EV seems to have a chance to satisfy the demand for molybdenum and antimony; each at Parag, positioned 350km north of Lima, and Los Lirios.
In Could 2023, EV filed paperwork to safe a 70 per cent stake in Parag, with Mr Callaghan appointed managing director just a few months later.
Its 70 per cent stake in Los Lirios was secured on January 28 this 12 months and comprises 4 mining licences throughout 1,652 hectares.
“Parag has unequivocally been our focus; it’s an impressive copper-molybdenum-silver-porphyry system,” Mr Callaghan.
“The drilling up to now has been fantastic. It’s exceeded our expectations and we expect it’s a much better challenge than we hoped for.
“The problem has been that market help for this type of exploration simply hasn’t been there over the past 12 months or so, which has been fairly distressing.
“Our second copper challenge – Don Enrique [260km east of Lima] – is drill prepared. We’re intrigued by it, as the whole lot seems to be proper. It simply wants drilling.”
The EV boss mentioned the corporate’s push into the antimony market additionally had upside.
“I do know Mexico effectively,” Mr Callaghan mentioned.
“I’ve constructed mines there previously. I do know the nation very effectively and I’ve lived there twice.
“The rationale why we took the antimony is as a result of we see a chance to get into manufacturing in a short time on antimony, which is clearly in a remarkably odd demand-supply conundrum in the intervening time.
“It’s genuinely uncommon and we are able to exploit that and get into manufacturing in a short time on a small-scale foundation, utilizing mines which can be an order of magnitude greater grade than something open in Australia.”
He mentioned the alternatives accessible to the corporate in Mexico had been too good to cross up.
“What actually caught my consideration in Mexico once we went again to our sources was the variety of alternatives and the standard of these alternatives,” Mr Callaghan mentioned
“For us, the antimony is unashamedly a approach to exploit a really uncommon market and in addition look to generate money circulation, which we are able to use to use to our copper portfolio in Peru.”
Challenger Gold is making strides in Argentina. Photograph: Nicolas Gutierrez-Cervetto
Challenger, which secured 100 per cent possession of Hualilan in 2021, is about to take its subsequent step in direction of manufacturing.
“We went via the dream exploration interval, the place we took a challenge from nothing to virtually three million ounces [of gold],” Mr Knauer instructed Enterprise Information.
“You then went via that basically difficult eighteen months to 2 years when no capital was accessible and there was little interest in juniors.
“In the course of that, we modified focus to go towards how we might go into manufacturing cheaply.
“And, fortunately sufficient, there was a toll-milling possibility. We’ve wrapped up a contract to toll mill at a plant which is about 170 kilometres down the street. We solely toll mill three per cent of our ore.
“That settlement was signed in January and we count on to be processing our ore within the fourth quarter of this 12 months.
“Proper now, the main target is on ensuring we are able to pop that high-grade ore into vehicles and get it as much as Casposo.”
In the meantime, over in Minas Gerais, Mr Prineas mentioned St George was getting proper right down to enterprise.
“It’s a sophisticated challenge with a deposit already there, so it’s fairly simple to start out planning your improvement research,” he mentioned.
“You’re not drilling away to attempt to discover issues. You’ve already received sufficient drilling to give you a drill useful resource.
“We’ll be pumping out later this month [March] after which it’s a matter of getting on the bottom, doing extra drilling to broaden the useful resource.
“Solely ten per cent of the challenge been intently spaced drilled, so there’s nice potential to extend the useful resource.”
Over the previous few months, St George has signed a number of offtake agreements for Araxá, together with a cope with main Chinese language steelmaker Liaoning Fangda Group in January.
