In the past five months, Mexico’s second-largest silver mine was shut down, reopened and the recently shut down once again. Due to a new blockade at Newmont-Goldcorp’s Penasquito Mine, stemming from issues with a local trucking contractor, the company has temporarily ceased operations.

Unfortunately for Newmont-Goldcorp, 2019 was supposed to be a banner year for gold and silver production at the Penasquito Mine. Newmont which recently merged with Goldcorp, is now the owner of the Penasquito Mine, one of the largest gold-silver polymetallic mines in North America.

(courtesy of Goldcorp 2018 Tailings & Mine Waste Conference PDF Report)

Currently, the Penasquito Mine Tailings Dam is 280 feet tall (approximately 28 stories) and will grow another 180 feet over the next ten years to a total of 460 feet tall. This is the curse when producing gold and silver at very low ore grades… you have to put the millions of tons of the waste somewhere.

Now, besides the issues with the local trucking contractor, the locals have also been protesting about the massive water consumption that is needed to process millions of tons of ore per annually at the gigantic low-grade open-pit mine. Regardless, Penasquito continues to be plagued by these issues as it tries to access the higher-grade gold and silver ores in the undeveloped areas in the mine.

Here is the estimated “payable” amount of silver to be produced each year from the Penasquito Mine over the next decade:

If everything had gone to plan, the Penasquito Mine would have produced nearly 40 million ounces in 2019. This would have made the Penasquito Mine the largest silver producer in Mexico, even surpassing Fresnillo’s Saucito Mine, ranked number one in 2018.

So, it has been extremely frustrating for Newmont-Goldcorp this year as it can’t produce the amount of gold and silver at Penasquito, especially with the much higher prices these past few months.

Here is the chronology of the events at the Penasquito Mine:

Newmont Goldcorp Provides Update on Operations at Peñasquito Mine in Mexico [shut down]
04/29/2019

DENVER–(BUSINESS WIRE)– Newmont Goldcorp Corporation (NYSE: NEM, TSX: NGT) (Newmont Goldcorp or the Company) announced that later today the Company intends to temporarily suspend operations at the Peñasquito mine in Mexico pending resolution of an illegal blockade by a trucking contractor and some members of the Cedros community that began on March 27, 2019.

Newmont Goldcorp Safely Ramping Up Operations at Peñasquito Mine in Mexico [reopen]
06/17/2019

DENVER–(BUSINESS WIRE)– Newmont Goldcorp Corporation (NYSE: NEM, TSX: NGT) (Newmont Goldcorp or the Company) is safely ramping up operations at the Peñasquito mine in Mexico following the lifting of an illegal blockade and the establishment of a dialogue process sponsored by the national government.

Concentrate shipments from the mine, as well as the delivery of supplies to the site, have resumed and workers are going through orientation sessions to ensure production begins in a safe and orderly manner. During the temporary suspension of operations, which began on April 29, the mine used the downtime to bring forward maintenance on a variety of systems and equipment.

Newmont Goldcorp Provides Update on Peñasquito Mine in Mexico [shut down]
09/15/2019

DENVER–(BUSINESS WIRE)– Newmont Goldcorp Corporation (NYSE: NEM, TSX: NGT) (Newmont Goldcorp or the Company) announced that the dialogue sponsored by the government of Mexico to resolve issues with a trucking contractor and the San Juan de Cedros community (one of Peñasquito’s 25 neighboring communities) has been suspended and that an illegal blockade has resumed.

While many western investors believe these mine shutdowns are due to the “illegal” or “trivial” issues being protested by the locals, the real reason has more to do with the MASSIVE FOOTPRINT and IMPACT these newer mines have on the local population and environment. As I mentioned in my previous article on the Penasquito Mine Tailings Dam, it will nearly reach the height of the infamous Great Pyramid of Giza:

The only difference between these two structures is that the Egyptians built their pyramids for the glory of their rulers and their gods, while the workers and engineers at Penasquito built their massive tailings dam structure for waste disposal. Can you imagine in say 200 years after our civilization collapsed and the humans that come across this massive tailings dam might believe it was some high-tech landing field for Extraterrestrials or Aliens???

Regardless, the volatility in the shutting down, opening, and shutting down once again of the Penasquito Mine seems to fit right into the insanity taking place in the markets today. For example, the oil price shot higher by $8+ due to the attack on the Saudi Abqaig Oil Processing Facility and then fell nearly in half the next day when the Saudi Energy Minister says “Everything’s Fine… we will be back online in a few weeks (my words).”

I don’t believe we know the full story and the implications of damage yet. Furthermore, what if there are more attacks in the future? It seems as if we have entered into a totally new world where HIGH-TECH weapons can take down a great deal of complex vulnerable HIGH-TECH infrastructure with very little cost.

I will be writing some articles on the ongoing insanity in the markets and why it’s related to what’s taking place in the oil market. Here is one tidbit. From 1960-1970, do you know how volatile the U.S. WTIC was during the Vietnam War decade??

U.S. WTIC Oil Price A Barrel

• 1960 = $1.80
• 1961 = $1.80
• 1962 = $1.80
• 1963 = $1.80
• 1964 = $1.80
• 1965 = $1.80
• 1966 = $1.80
• 1967 = $1.80
• 1968 = $1.80
• 1969 = $1.80
• 1970 = $1.80

If you are looking at the figures and can see that there is NO VOLATILITY whatsoever in the oil price for a decade, then your mind is working correctly, which means you are not suffering from brain damage. However, the tremendous amount of volatility today taking place in the oil price, as well as other assets prices, means there is something very wrong and different today with the economic and financial system as we head closer to the OIL SENECA CLIFF.