Agnico Eagle Mines Ltd. (AEM) purchased a 50% interest in Minas de San Nicolás, S.A.P.I. de C.V. (MSN), a Teck Resources subsidiary that owns the San Nicolás copper-zinc development project located in Zacatecas, Mexico. The $580 million transaction will make Teck and AEM 50:50 joint venture partners at San Nicolás.
“Located in a leading mining jurisdiction, San Nicolás is a high-quality project with high grades, extremely competitive capital intensity, and first quartile costs,” said Don Lindsay, president and CEO of Teck. “The opportunity to add the operating and development experience of AEM should generate substantial benefits for the project including for all stakeholders throughout the project life cycle.”
San Nicolás is the largest undeveloped volcanic-hosted massive sulphide deposit (VHMS) deposit in Mexico and is one of the largest undeveloped VHMS deposits globally. Teck estimated San Nicolás to contain 105.2 million metric tons (mt) of proven and probable mineral reserves at average grades of 1.12% copper, 1.48% zinc, 0.4 g/mt gold and 22 g/mt silver, or more than 2% on a copper equivalent basis.
“This is a unique opportunity to create a long-term partnership between two high quality mining companies working together to de-risk and optimize a world class VMS deposit in a premier mining jurisdiction,” added Ammar Al-Joundi, president and CEO of Agnico Eagle. “Agnico Eagle’s project development, permitting and construction experience in Mexico, combined with Teck’s base metals expertise, operating excellence and marketing leadership, are complementary skillsets and will contribute to the timely and successful development and operation of San Nicolás.”
A prefeasibility study completed by Teck in March 2021 contemplates a truck-and-shovel open pit mine and processing operations that include flotation. First production is expected in 2026, with an estimated mine life of 15 years and meaningful potential for mine life extension and regional exploration upside. It’s expected to produce 63,000 mt/y of copper and 147,000 mt/y of zinc in concentrate over its first five years of production.
Teck and Agnico Eagle anticipate that development capital costs could be in the range of $1-$1.1 billion, based on current cost environment and estimate accuracy. A detailed plan to complete a feasibility study, permitting, and community engagement has been developed, with initial work underway since January 2022. The feasibility study is expected to be completed early in 2024 with project sanction thereafter subject to receipt of permits.