Create FREE account or log in

to receive MINING.COM digests

Strike forces Excellon Resources to halt Mexican silver mine

La Platosa mine in Durango, Mexico, is one of the world’s highest-grade silver mines. (Image courtesy of Excellon Resources.)

Precious metals miners Excellon Resources (TSX, NYSE: EXN)( FRA: E4X2) halted on Monday operations at La Platosa in Mexico, the company’s only producing mine, as unionized workers walked off the job after collective bargaining talks broke down. 

The Canadian miner said the national mining-metallurgy union had agreed in principle early last week to the terms of the 2022 collective arrangement following numerous concessions.

“Unfortunately, the agreement was reneged on and, despite our additional concessions, a labour action was ordered,” chief executive Brendan Cahill said in the statement.

According to local paper La Prensa, the strike was in response to Excellon’s refusal to increase workers’ salaries from 2021 levels.

Cahill said La Platosa workers have one of the “most generous compensation structures” in the Mexican mining industry and have benefited from higher metals prices and productivity.

“We hope they also understand the challenges we are facing this year at La Platosa,” Cahill noted.

The CEO was referring to a recently kicked off assessment of the mine’s economic viability beyond mid-2022. Excellon announced in January that the La Platosa silver, zinc and lead mine, in operations since 2005, was facing a series of issues, including a steepening deposit, de-watering problems, increased consumable prices and legislative changes.

Among Mexico’s highest grade mines

Relations between the company and the mine, its union and locals have soured at times, with Excellon having to declare force majeure in 2012 due to a sustained illegal blockade. The impact of the strike, triggered the exit of the company’s financial officer.

La Platosa, in the state of Durango, is one of Mexico’s highest grade silver mines. Mineralized material is processed at the 800-tonne-per-day Miguel Auza mill, 200 km to the south in Zacatecas.

Excellon believes there is significant potential for additional strata bound deposits in the area around La Platosa mine, which produced 2 million ounces of silver equivalent last year.

The company’s other asset in Mexico, the Evolution deposit in Zacatecas, which is adjacent to the Miguel Auza mill, ceased mining in 2008. The company is also examining this property for potential new mining targets.