May 10, 2005

Introductory report on recent and expanding mining activity in the Sierra Tarahumara.

I have recently returned from a two week trip to the Sierra Tarahumara (Copper Canyon) in the State of Chihuahua, Mexico. The original intention for my journey there was not political. Once there, I  stumbled upon so many unsolicited accounts of recent and intensified mining activity in nearly all the areas I was visiting, that I felt I had no choice but to start looking into what I was hearing. 

Not fully prepared for a full investigation, and not knowing what I was possibly getting into (around that time, two Guatemalan Mayan anti-mining activist had been shot), I simply began to carefully ask more concrete questions from apparently "friendly" sources, and attempt to compile from their answers the facts. My intention was to further evaluate and research the information I collected on site upon returning to the US.  I also wanted to cross reference my findings with any other documented data about this issue produced by the environmental, Indigenous, and/or worker right’s groups in the US and Mexico. 

To my surprise, I did not find much concrete activist generated information/investigation materials or organizing going on around mining activity in this area. In light of this, I contacted respected and trusted activist compañeros and offered to produce this brief report to inform them and you of my findings.

Brief Background:

The Sierra Tarahumara is the traditional home of  the Tarahumara people who continue to have a strong presence in the area while facing ongoing displacement, exploitation and persecution. What little territory they still control, remains unprotected and is occupied and exploited at will by lumber and mining interests as well as by mestizo settlers. Geographically, the Sierra is a rugged, isolated area. Ecologically, it is a complex canyon system of tropical lowlands and dessert highlands dependant for its intricate survival on the delicate balance of its water resources. Perhaps one of the last true wilderness in North America, it is in the eyes of many a presently untapped vast natural resources treasure chest ripe for exploitation by international capital.

Since the 1992 reforms of the Mexican constitution that allow 100% foreign ownership of mine concessions as well as the privatization of the lands known as “ejidos” (community held properties that prior to the reform could not be sold or mortgaged) new multi-million dollar concessions amounting to thousands of acres of Mexican territory have been acquired by Canadian and American mining companies and are geared for exploitation. Some have already become their most profitable operating mines for many of these companies. Not just in Copper Canyon, but throughout  the Western Sierra Madre belt, the aggressiveness and extent of the recent mining activities (gold in particular) is so intense that it has earned it the reputation in the mining industry as the site of the world’s new “gold rush”.

The biggest reported operation in the area where I was traveling is the Sauzal mine, 100% owned and operated by the Canadian mining company, Glamis. On April 12, 2005, Glamis announced a new quarterly production record of 93,700 ounces of gold. Their gold production for the first quarter of 2005 increased by 84 percent compared to the initial three months of the previous year. According to company literature, “the substantially improved quarterly results reflect excellent performance during the first full quarter of production from the Company's new El Sauzal mine in Mexico”…

El Sauzal mine is in close proximity to the Urique River which feeds into to a major river artery, the Río Fuerte, which in turn feeds into the region’s main fluvial and water source system composed of a series of larger lakes and reservoirs bordering with the neighboring state of Sinaloa (See Map).

During my visit to the region this April 2-10,  2005, I was able to establish willing sources of information among the local population. Due to the shortness of the visit though, I was unable to attain concrete technical answers to questions regarding the mine’s present environmental and worker conditions, water use quantities and sources, or specific chemical mining processes being utilized. Additionally, It was evident to me that Glamis has a set in motion a significant PR campaign since a number of local residents told me, in surprisingly similar language, that the mine was environmentally sound and using the latest “technology” to safeguard the ecological integrity of the area and health of the workers.  Reports about the company having bought very expensive Christmas presents for the children of some of the nearby villages also reached my ears. Reports of daily wages being withheld so as to guarantee that the “Indians” return to work the next day and not “go off” into the sierra were also made to me by some of the small merchants of a nearby village.
A new road has been recently completed between the mine and the city of Choix. This road appears to have already had an impact on the environmental and social conditions of the area since it opens access to a previously inaccessible lands.  This was reported to me by a contact I’ve recently made with an environmentally concerned back country horseback tour guide. 

My concerns and investigation regarding the Sauzal mine remain focused on lack of independent information about present chemicals in use, water use, worker rights and conditions, and specific geographic location information regarding the actual proximity of the mine’s proposed expansion to the Urique river (before expansion, it was reported to me that the present mine’s pit was located 1 km away from the river, but it is not clear which way the mine has expanded).  A report from a local resident who said he had worked on the mine, also raises the additional concern of possible uranium exploration activity going on at this location. In my research to date, I have not been able to confirm these claims, but I believe this is serious enough matter to warrant further research and investigation.

In addition to the El Sauzal mine, and stretching north across the state of Chihuahua onto the Sierra Madre Occidental there are bonanza gold and silver new mining operations in Dolores, Mulatos, Ocampo, Montes Verdes (Monterdes) and Piedras Verdes, among others. 

El Sauzal
Glamis

The El Sauzal mine is Glamis Gold’s newest and largest gold mine. Acquired through the Francisco Gold Corp. merger, construction began in mid 2003 and mill start-up occurred in October 2004, months ahead of the original schedule. More than 25,000 ounces of gold were produced in 2004, and the mine is on track to produce 170,000 ounces in 2005.

El Sauzal is an open pit conventional oxide-milling project. Mill capacity was optimized at 5,500 tonnes per day and annual production is projected to average 190,000 ounces of gold at an estimated total cash cost of $110 per ounce over a 10-year mine life. The project internal rate of return, based on a $300 per ounce gold price, exceeds 25 percent. The timely and successful development of the El Sauzal project was a top priority for Glamis, and a key step in achieving the Company’s production goal of 700,000 gold ounces per year at total cash cost below $150 per ounce.

To date, a proven and probable gold reserve of nearly two million ounces has been defined at the El Sauzal property. Initially, the opportunity to substantially increase reserves appeared limited. However, recent work indicates the potential to extend mineralization away from the existing pits and in the Trini, East Extension, and other target areas is increasing. Glamis is actively exploring around the deposits and on the rest of its concession area. Glamis controls a total of 12 concessions covering an area of more than 36,000 hectares surrounding the El Sauzal deposit.

Dolores
Minefinders Corporation ltd.

The Dolores project is an advanced stage gold-silver resource, containing a measured and indicated resource of 97.3 million tonnes at an average gold-equivalent grade of 1.54 grams per tonne: 2.75 million ounces of gold and 128 million ounces of silver. Additional inferred resources of 650,000 ounces of gold and 28 million ounces of silver have also been delineated.

Ocampo
Gammon Lake resources Inc.

In December of 2003 Gammon acquired all of Bolnisi Gold’s interest in the Ocampo Open-Pit Project area.  Previous to this, under a 60% earn-in agreement, Bolnisi had completed advanced feasibility and some additional deep exploration drilling.  Under it’s final feasibility program, Bolnisi completed in excess of 12,500-metres of drilling in more than 120 drill holes.  This drilling is in addition to a previous 30,000-metres and 200 drill holes completed by Gammon Lake.  Bolnisi also reported that the average gold and silver grades of the master metallurgical testwork composite samples and the Ocampo deposits at the Open-Pit area are approximately 2.6 g/t gold and 90 g/t silver.  The weighted average recoveries for gold and silver are reported as 96.6% and 95.4% respectively, for flotation/cyanide leaching.

Monterde
Kimber

The Carmen deposit on Kimber's Monterde property is emerging as one of the Sierra Madre's premier gold and silver deposits. The Company’s latest resource estimate shows approximately 1,000,000 gold-equivalent resource ounces, and recent drill results of nearby structures show promising grades and widths, which have not yet been incorporated into any resource estimate. Kimber's objective is to increase shareholder value by bringing the Carmen deposit to positive feasibility, and by adding economically attractive gold and silver resources.

Adrián Boutureira

 


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