Compania Minera San Ignacio de Morococha S.A.

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What it is

SIMSA’s core business is the prospection, exploration, exploitation, concentration, and marketing of zinc and lead mineral concentrates. All mining is done at the San Vicente Mining Unit in the province of Chanchamayo, department of Junín — a high-altitude underground mine in Peru’s central jungle, roughly 300 km east of Lima.

SIMSA is recognised internationally for the purity of its zinc concentrate, which runs at 60% zinc — an unusually high grade that commands premium prices from smelters in Asia and Europe. The company also generates electricity, running a small hydroelectric plant at Monobamba that partly powers mine operations.

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Who owns it

The Arias Vargas family controls SIMSA overwhelmingly, holding their stakes directly and through a network of offshore vehicles. The five largest shareholders — Talingo Corporation (27.23%), Clarion Holding Ltd (26.34%), Orange Bay Commercial Inc (16.82%), Victoria Isabel Arias Vargas (14.67%), and Evangelina Arias Vargas de Sologuren (13.60%) — together hold almost all the company’s shares, with fewer than 1.4% in public hands.

That near-total concentration means the family alone decides the company’s fate through the insolvency process. Evangelina Arias Vargas de Sologuren, a board director at SIMSA, is simultaneously President of the board of Compañía Minera Poderosa — a separate, larger gold miner the family also controls, giving the clan significant reach across Peru’s mining sector.

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Who runs it

The day-to-day chief executive is Víctor Alonso Arenas Vera, who serves as Gerente General (CEO); his declaration of responsibility in the 2024 annual report is dated 3 March 2025. The board is chaired by Victoria Isabel Arias Vargas, the family’s principal named shareholder, who signed the annual letter to shareholders as Presidenta del Directorio.

José Luis Vargas Huallpa serves as Contador General (chief accountant), a role he has held since 2014, leading financial reporting under international accounting standards (NIIF/IFRS) and tax compliance. The company does not publicly designate a separate CFO title in its governance disclosures.

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The money, in plain words

There is almost nothing to count. The auditors’ report confirms that for the year to 31 December 2024, the company recorded a net loss of S/ 141,555 thousand (US$42 mn) (approximately US$41.6 million); in 2023 the net loss was S/ 32,621 thousand (US$10 mn) — a fourfold worsening as the mine sat idle.

The company generated zero revenue in 2024; shareholders and lenders funded all operating costs.

The one figure that tells the long story is the long-lived assets: the mine’s physical assets — plant, equipment, and intangibles — stood at S/ 344,650 thousand (about US$101.4 million) at year-end, and every year of zero production risks triggering a write-down of that entire book value. At a share price of S/ 0.70, (US$0.21)the market values the whole company at only about a third of those physical assets — a deep discount that reflects investor scepticism about whether the mine reopens.

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What it is doing now

On 5 August 2024, a creditor triggered a formal insolvency proceeding (Procedimiento Concursal Ordinario) against SIMSA under Peru’s INDECOPI regulatory system, after the mine’s shutdown wiped out its ability to repay debts. The 2024 Memoria Anual explains the chain of events: two serious accidents at the San Vicente mine in mid-2023 forced a voluntary suspension; the regulator OSINERGMIN then required a full geomechanical study before restart; SIMSA received authorisation to resume operations on 9 July 2024 but by then a creditor had already moved to open the insolvency file.

Despite zero production in 2024, the company continued geological work: exploration work estimated a mineral potential of 9,200,000 tonnes at grades of 15.60% zinc and 3.76% lead — strong ore-body fundamentals that management cites as the basis for attracting investors or partners. The 2024 annual report states management is actively seeking investment-bank financing and evaluating strategic partners to recapitalise.

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What to watch

• INDECOPI insolvency outcome: the creditor-recognition phase must complete before any restructuring plan can be agreed. Failure to reach a plan risks court-ordered liquidation of the mine assets.
• Strategic partner: management explicitly flagged it is evaluating bringing in a new mining partner. Any deal would need to satisfy creditors and likely dilute the Arias Vargas family significantly.
• Revenue restart: the 2025 Memoria Anual (filed March 2026) shows operational work continued into 2025 — including pump-system improvements that cut energy use by 20%. Whether concentrated zinc sales resume in 2025 or early 2026 is the single most important number to watch.
• Asset impairment: with S/ 344.7 million (US$101 mn) in long-lived assets and zero operating cash flow, auditors have already flagged going-concern doubt. A further year without sales could force a write-down that extinguishes book equity entirely.
• Zinc price: SIMSA’s concentrates are sold under long-term contracts with Korea Zinc and Trafigura. A sustained zinc price recovery above US$3,000/tonne would materially improve the restructuring case.

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This is news, not investment advice.