Minco fishes for silver in Mexican lake

Metals exploration firm Minco has ambitious plans to become a world-class silver producer in under five years and will kick off by dredging a lake in central Mexico full of silver left over from the colonial era.
"By developing our own projects and through mergers and acquisitions activity, we could quite quickly turn Minco into a top 10-20 silver producer," the firm's Chief Executive Matthew Dorman said.
Minco has three silver project in Mexico -- the world's largest producer of the metal used to make jewellery and in a wide variety of industrial applications.
Its Laguna tailings project is the most advanced and aims to extract some 2.2 million ounces a year of silver and some gold from a man-made reservoir built in 1836 when the Mexican government dammed the area to create a water source to stimulate agriculture in the area.
Minco also intends to recover mercury , a contaminant left in the lake from colonial-era mining activities, and has signed a 100 percent offtake agreement with London-based minor metals dealer Lambert Metals.
"We have an agreement with Lambert Metals to take our production of around five to six thousand flasks of mercury per year," Dorman said, adding this amounted to around four to five percent of world mercury production.
Metallic mercury is stored in containers known as 76-lb (34.47 kg) flasks. It currently trades at $800 a flask, not far from record highs hit in March at $900.
Ironically, Mexico is a net importer of mercury -- used to make caustic soda, batteries and thermometers -- but Minco are legally obliged to export it as Mexico is signatory to a North American pact to reduce releases of the toxic product.
Dorman said the Laguna project had an eight-year life with operating costs of $2.28 per silver equivalent ounce and assumes a silver break-even price of $3.03 an ounce. Spot silver was trading at $7.28/31 by 1203 GMT (1:03 p.m. British time).