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.
Originally set at 300 000 oz, Gold One has reduced its guidance for 2012 down to 250 000 oz.
The reasoning behind the retraction? An illegal strike at Gold One’s flagship Modder East mine.
As reported by Mining Weekly,
The illegal Professional Transport and Allied Workers Union strike at Modder East had knocked its forecast for the mine, in the East Rand goldfield, to16 000 oz for the September quarter. This is substantially lower than the 31 128 oz produced in the March quarter, and the 26 493 oz delivered in the June quarter.
However, to curb losses, the company cleverly introduced a number of changes to ensure that the Modder property continues to operate profitably. Such contingencies include utilizing underground accumulations and low-grade stockpiles to cover lost mining tonnages.
While negotiations are stated to be under way Gold One has taken to hiring new crews. In speaking to Mining Weekly Neal Froneman, Gold One’s CEO, said “with the controlled phasing in of contract labour, management expects production to return to pre-strike rates by the end of September 2012.”
Despite the loss in production at the Modder East mine, Gold One’s stock has climbed $0.05 since Friday. This may be in part to the company’s recent expansion, and claimed success, at the new projects purchased from Rand Uranium.
