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.
Torex Gold (TSX: TXG) can begin operations at its flagship Media Luna gold project in Mexico, part of the company’s Morelos property, after securing a key and final environmental permit from the country’s Secretariat of Environment and Natural Resources (SEMARNAT).
The Canadian miner, which is spending $19 million this year to add further resources to Media Luna, said the MIA Integral permit represented another key milestone in de-risking the project.
“With the MIA Integral in hand, the company now has all the environmental approvals required to develop and operate Media Luna,” chief executive Jody Kuzenko said in the statement.
Torex has also received approval to increase the power draw at site to 45 megawatts and said that discussions with the utility authorities to further increase the power draw to 65 MW, required to sustainably deliver full production at Media Luna, are ongoing.
The Toronto-based company is also in talks with local authorities regarding future in-pit tailings deposition and expanding the exploration boundaries.
Don Demarco, mining analyst at National Bank of Canada, said receiving the government’s endorsement well in advance of first pour at the project, in 2024, represented an “incremental development de-risking.”
Media Luna, Demarco noted, is now fully permitted with environmental requirements on both sides of the Balsas River consolidated under a single authorization.
Torex is looking at both a conventional mine design for Media Luna as well as at a mine plan that would use the company’s proprietary Muckahi mining system.
The conceptual design in the preliminary economic assessment (PEA) for the asset envisions an underground operation with expected average annual gold equivalent production of about 350,000 ounces over a 10-year mine life.
Torex’s main asset is the Morelos Complex, located in Mexico’s western state of Guerrero. It includes the El Limón Guajes Mine Complex (ELG), the Media Luna project, a processing plant and related infrastructure.
