Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Quebec-focused Monarch Gold (TSX: MQR) is taking a 14.2% stake in Unigold (TSXV: UGD), whose Nieta project in the Dominican Republic has an open-pit inferred resource of 39.49 million tonnes grading 1.59 grams gold per tonne for 2.01 million ounces of gold. Unigold’s stock soared over 45% on the news.
Monarch has acquired from an investor a block of 6.5 million Unigold shares at a price of $0.115 per share for a total of $747,500, payable by the issuance of 3.25 million common shares of Monarch at a price of $0.23 per share. Monarch’s shares will be held in escrow for a 24-month period.
The Nieta project, situated on a 22,616 hectare concession, is 200 linear km northwest of the capital city of Santo Domingo, and the Dominican Republic’s second-largest city, Santiago de los Caballeros, is 100 km northeast of the project. The project is situated on a 22,616 hectare concession.
Over the last five years, Unigold has spent more than $20 million on exploration at Nieta, including more than 50,000 metres of drilling.
Monarch’s president and CEO, Jean-Marc Lacoste, described the investment as “an incredible opportunity” that management “could not pass up.”
“Monarch has always been interested in acquiring undervalued assets with a view to developing their full value,” Lacoste said in a statement. “With Unigold, we are acquiring a block of shares of a company with a resource of more than 2 million ounces of gold, at a fraction of the market price for such an asset, and with a strong shareholder base.”
Monarch has a portfolio of assets in Quebec’s Abitibi mining camp. Its flagship Wasamac deposit, 15 km west of Rouyn-Noranda, has a measured and indicated resource of 2.6 million ounces of gold contained within 29.86 million tonnes grading 2.70 grams gold and inferred resources of 293,900 ounces of gold contained within 4.16 million tonnes of 2.20 grams gold.
(This article first appeared in The Northern Miner)
Comments
manuel L Rodriguez
Rich or poor ts good to have gold.