MEXICAN MINING INDUSTRY RECENT DEVELOPMENT. Toronto, Canada March, 2016

Transcription

1 MEXICAN MINING INDUSTRY RECENT DEVELOPMENT Toronto, Canada March, 2016

2 1. Mexican Mining Industry Mineral Market Outlook 3. Mexican Mining Advantages 4. Mexican Mining Competitiveness 2

3 MEXICAN MININGMETALLURGICAL PRODUCTION 20,000 18,000 16,000 14,000 12,000 Million dollars 11,412 17,178 17,832 15,628 14,738 13,048 10,000 8,000 6,000 8,261 8,376 6,976 4,000 2, Source: INEGI. 3

4 INVESTMENT IN MEXICAN MINING SECTOR Million dollars 9,000 8,000 7,000 8,043 6,000 5,000 4,000 5,612 6,576 4,948 5,203 3,000 2,000 1,000 2,156 3,656 2,858 3, Source: CAMIMEX. 4

5 INVESTMENT IN MEXICAN MINING SECTOR Expansion Projects Million dollars New Projects , , , , , * * Machinery and Equipment Exploration Source: CAMIMEX * * 5

6 FOREIGN INVESTMENT IN MEXICAN MINING Projects Companies Source: DGDM, SE. 6

7 Equity Capital Raised 2015 TSXTSXV Mexico (US billion dollars) Mexico and Latin American Countries Mexico 30% Latin America 70% Number of TSX/TSXV Mining Companies by Latin American Country Source: TSX. 7

8 1. Mexican Mining Industry Mineral Market Outlook 3. Mexican Mining Advantages 4. Mexican Mining Competitiveness 8

9 WORLD ECONOMICOUTLOOK World GDP (% change) World Trade Volume (% change) Source: IMF. Emerging Markets GDP (% change) Commodity Price Index2005=100 includesboth Fuel and NonFuel Price Indices

10 COMMODITIES PRICES Commodity Price Index 2005=100 Change 2015/2010 (%) Total Crude Oil Coal Cereals Agr.Raw Mat. 2.1 Metals Total Coal Agricultural Raw Materials Crude OIl Cereals Metals Source: IMF. 10

11 METAL PRICES Real Annual Indices (2010=100) Base Metals Precious Metals Source: World Bank. 11

12 , , , , , GOLD SILVER 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9, COPPER ZINC Annual Real Prices (2010 US dollars) Source: World Bank. dl/oz dl/oz dl/t dl/t 12

13 GDP CHINA VS METAL PRICE INDICES Base Metals Price Indice Precious Metals Price Indice GDP China (% Change) Source: World Bank. Real price indices 2010=

14 CONSUMPTION OF SELECTED METAL BY COUNTRY th. m.t. Copper th. m.t. Lead ,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Europe China USA Europe China USA th. m.t. Nickel th. m.t. Zinc 1, , , , , , , , EUROPA CHINA USA EUROPA CHINA USA Source: World Bureau of Metal Statistics. 14

15 METAL PRICES INTERNATIONAL PRICES OF SELECTED METALS % Change Price FORECAST PRODUCT /2014 March GOLD (London Final, Dlls./oz.) 1, , , , , , ,121.0 SILVER (London Fix, US, Dlls./oz.) LEAD (LME Settle, Ctvs Dlls./lb.) COPPER (LME Settle, Ctvs Dlls./lb.) ZINC (LME Settle, Ctvs Dlls./lb.) IRON ORE (World Bank, Dlls./Ton.) Source: Metals Week, CPM, Wolrd Bank. % change 2015/2014 Gold Silver Copper Lead Zinc Iron ore Source: Metal Weeks. 15

16 /9/2010 7/9/ /9/2010 1/9/2011 4/9/2011 7/9/ /9/2011 1/9/2012 4/9/2012 7/9/ /9/2012 1/9/2013 4/9/2013 7/9/ /9/2013 1/9/2014 4/9/2014 7/9/ /9/2014 1/9/2015 4/9/2015 7/9/ /9/2015 1/9/2016 GOLDCORP /12/2010 4/12/2010 7/12/ /12/2010 1/12/2011 4/12/2011 7/12/ /12/2011 1/12/2012 4/12/2012 7/12/ /12/2012 1/12/2013 4/12/2013 7/12/ /12/2013 1/12/2014 4/12/2014 7/12/ /12/2014 1/12/2015 4/12/2015 7/12/ /12/2015 1/12/2016 BARRICK GOLD MINING COMPANIES PRICE QUOTES ,000 2,000 3,000 4,000 5,000 6,000 7/22/ /22/2010 1/22/2011 4/22/2011 7/22/ /22/2011 1/22/2012 4/22/2012 7/22/ /22/2012 1/22/2013 4/22/2013 7/22/ /22/2013 1/22/2014 4/22/2014 7/22/ /22/2014 1/22/2015 4/22/2015 7/22/ /22/2015 1/22/2016 BHP BILLITON Source: TSX and LSE ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 1/4/2010 4/4/2010 7/4/ /4/2010 1/4/2011 4/4/2011 7/4/ /4/2011 1/4/2012 4/4/2012 7/4/ /4/2012 1/4/2013 4/4/2013 7/4/ /4/2013 1/4/2014 4/4/2014 7/4/ /4/2014 1/4/2015 4/4/2015 7/4/ /4/2015 1/4/2016 RIO TINTO plc CAD CAD GBp GBp 16

17 GOLD Monthly Prices * (dl/oz) Supply * (Million ounces) 1, , , , , , , , , Mine Production Secondary Supply Other Demand * (Million ounces) Electronics Stock 8% demand 22% Medical 1% Other 1% Industrial demand Jewelry Stock demand Source: CPM Group. * Estimated data for Jewelry 68% 17

18 SILVER Monthly Prices * (dl/oz) Supply * (Million ounces) Mine Production Secondary Supply Demand * (Million ounces) Electronic Jewelry Other Net Surplus * (Million ounces) Source: CPM Group. Estimated data for

19 Monthly Prices * (dl/lb) COPPER 30,000 Supply * (Thou. Metric Tonnes) ,000 22,572 23, , ,000 10,000 5,000 23,400 23,200 23,000 22,800 Demand * (Thou. Metric Tonnes) 23, Balance * (Thou. Metric Tonnes) 22,600 22,400 22,200 22, ,000 21,800 21, Source: CPM Group. *Estimated data for

20 LEAD Monthly Prices * (dl/lb) ,000 12,000 10,000 8,000 6,000 Supply * (Thou. Metric Tonnes) 10,852 11, , ,000 14,000 Demand * (Thou. Metric Tonnes) ,000 10,000 8,000 10,836 11,117 Balance * (Thou. Metric Tonnes) ,000 4, , Source: CPM Group. *Estimated data for

21 ZINC Monthly Prices * (dl/lb) 18,000 Supply * (Thou. Metric Tonnes) ,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 14,008 14,036 16,000 14,000 Demand * (Thou. Metric Tonnes) 13,882 14, Balance * (Thou. Metric Tonnes) 12,000 10, ,000 6, ,000 2, Source: CPM Group. *Estimated data for

22 1. Mexican Mining Industry Mineral Market Outlook 3. Mexican Mining Advantages 4. Mexican Mining Competitiveness 22

23 México: Macroeconmic Indicators GDP (%) Inflation (%) Advanced Economies Latin America Mexico Advanced economies Latin America Mexico Source: IMF. 23

24 México: Macroeconmic Indicators Exchange Rate 2015 (January=100) Government Gross Debt (% GDP) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 42.0 Chile Mexico Brazil China Colombia Russia South Africa Mexico Latin America Source: IMF. 24

25 Mexican Mining Resources Mexico s Share in World Mine Production 1 Silver 2 Bismuth Fluorite 3 Celestite Wollastonite 4 Cadmium 5 Molibdenum Lead 6 Zinc 7 Salt Diatomite 8 Barite Graphite Gold Gypsum 10 Copper Source: USGS. 25

26 Geological Potential The Mexican territory shows well defined metallogenetic belts of Cu, Au; Cu, Mo, Au; Au, Ag, Cu; Ag, Au, Pb, Zn; Zn, Ag, Pb; F, Sr; C; Fe, Ti; Cu, Zn, Pb, Ag, Au; Fe; Au, Ag. Metallogenetic belts Ag, Au, Pb, Zn C Cu, Mo, Au Zn, Ag, Pb Cu, Zn, Pb, Ag, Au Massive Sulfides MVS (Au, Ag, Zn, Cu, Pb) Iron and titanium (Fe, Ti) Coal (C) Strontium (Sr) Fluor (F) Manganese (Mn) Phosphates (P) Au, Ag (Mesothermal) Au, Cu, Pb, Ag, Zn (Porphyry) Source: Mexican Geological Survey. MVS Au, Cu Ag Ti Fe Source: SGM 26

27 Mexican Geological Survey GEOLOGICAL AND GEOCHEMICAL MAPPING 1:250,000, No SURFACE km² ,716 1:50,000, YEAR MAP S SURFACE km² ,194 Source: Mexican Geological Survey. 27

28 Cash Cost Cash Cost Selected Mines 2015 (dl/ gold oz) 1,600 1,504 1,400 1,275 1,200 1, Source: Quarter Reports of Mining Companies (JanuarySeptember 2015). 28

29 Competitive Costs NationalProducer Price Index Mining Average prices of electricity Pesos kilowatt/hour / / / / / / / / / / / / / Source: INEGI. 29

30 1. Mexican Mining Industry Mineral Market Outlook 3. Mexican Mining Advantages 4. Mexican Mining Competitiveness 30

31 MEXICAN MINING, A COMPETITIVE INDUSTRY Where to invest in Mining2015. Behre Dolbear. Rank Country 1 Canada 2 Australia 3 USA 4 Chile 5 Mexico 6 Peru 7 Namibia 8 Botswana 9 Colombia 10 Ghana Source: Behre Dolbear,

32 FRASER INSTITUTE: INVESTMENT ATTRACTIVENESS INDEX Score (maximum 100) Mexico Rank Latin America Chile Peru Mexico Colombia Brasil Ecuador Bolivia Source: Fraser Institute, Uruguay

33 FRASER INSTITUTE: POLICY PERCEPTION INDEX Mexico Score (maximum 100) Rank Latin America Chile 83.5 Mexico Peru Uruguay Brasil Colombia Ecuador Bolivia 36.4 Source: Fraser Institute,

34 FRASER INSTITUTE: BEST PRACTICES MINERAL POTENTIAL INDEX Mexico Score (maximum 100) 78.0 Rank Latin America Chile Peru Colombia Mexico 68.0 Brasil Bolivia 50.0 Ecuador 47.0 Source: Fraser Institute, Uruguay

35 LIST OF FACTORS THAT ENCOURAGE OR AFFECT INVESTMENT Rank 1109 México Brazil Chile Colombia Peru Uruguay Ecuador Bolivia Uncertainty concerning the administration, interpretation, and enforcement of existing regulations Environmental regulations Regulatory duplication and Inconsistencies Legal System Taxation Regime Uncertainty Concerning Disputed Land Claims UncertaintyConcerning ProtectedAreas Quality of Infrastructure Socioeconomic Agreements/Community Development Conditions Trade Barriers Political Stability Labor Regulations Geological database Security Availability of Labor Source: Fraser Institute Annual Survey of Mining Companies

36 COMPARISON OF DIFFERENT TOPICS ENCOURAGE INVESTMENT (RANK) Uncertainty concerning the administration, interpretation, and enforcement of existing regulations Regulatory duplication and Inconsistencies Chile 19 Chile 12 Uruguay 22 México 30 México 27 Peru 54 Peru 39 Uruguay 68 Colombia 69 Colombia 69 Brazil Ecuador Bolivia Brazil Bolivia Ecuador Geological Database Environmental regulations Chile 26 México 12 Peru 38 Chile 25 México 42 Peru 52 Colombia 59 Uruguay 54 Brazil Ecuador Uruguay Bolivia Bolivia Brazil Colombia Ecuador Source: Fraser Institute,

37 COMPARISON OF DIFFERENT TOPICS ENCOURAGE INVESTMENT Taxation Regime Security Chile Peru México Colombia Brazil Uruguay Bolivia Ecuador Chile Uruguay Ecuador Brazil Peru Bolivia México Colombia Uncertainty Concerning Disputed Land Claims Quality of Infrastructure Chile Uruguay México Peru Colombia Brazil Ecuador Bolivia México Chile Uruguay Peru Ecuador Colombia Brazil Bolivia Source: Fraser Institute,

38 MINING ALLOTMENTS WITH ADVANCED EXPLORATION 38

39 THANKS