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.
Newmont (NYSE: NEM, TSX: NGT) has entered an agreement to acquire a large greenfield exploration land package of approximately 55,000 hectares in Santa Cruz province, Argentina, from Toronto-based junior Magna Terra Minerals (TSXV: MTT).
The package — known as the Boleadora group of properties — encompasses 12 individual exploration licenses located about 17 km southeast of the Cerro Negro mine area.
Newmont will pay Magna Terra $1 million to acquire the Boleadora project, with $25,000 paid upon signing followed by six installments totalling $975,000 paid within six years from the date of the agreement.
Newmont also granted a 2% net smelter return royalty to Magna Terra on the Boleadora package. The royalty can be reduced to 1% by payment of $2.5 million by Newmont to Magna Terra at any time, and the gross royalty payable is capped at $20 million.
“While it is a very large and early stage exploration package, its proximity to the Cerro Negro mine site makes it of strategic interest to Newmont from an exploration perspective,” Magna Terra president and CEO Lew Lawrick stated.
“The bulk of the property package lies along trend of the NNW structural control that is an important geological feature at Cerro Negro. Including Boleadora into Newmont’s regional Cerro Negro exploration program, along with the application of their proven exploration technologies, will add significant value to the project,” he added.
