With news emerging this week that Chile is considering revising its mining code to make exploration easier, we interviewed John-Mark Satude, President and CEO of Mexico-focused exploration company Riverside Resources, to get his take on exploration attractiveness in Mexico and how it can compete with other Latin American jurisdictions.
The public and private sectors do not always see eye to eye, and that could not be truer than in mining. Since the federal royalty taxes were introduced in 2013, many operators have been upset with the government as operations that were sustainable have now become subeconomic and John-Mark Staude, President and CEO of Mexico-focused exploration company Riverside Resources, warns this could jeopardize the future of the Mexican mining sector. “The industry is sustained by mining operations, rather than exploration,” he says. “Exploration will follow and can flourish where there is active mining and if operators are not given the conditions to be successful, there will not be sustained exploration and investment will dry up.”
The upcoming elections in mid-2018, Staude adds, will be an opportunity for the new administration to prove its commitment to the mining industry. “We are a public company and we need to go where the investors want us to and where what we find can be reasonably developed. We are really trying to keep our operations focused on Mexico and we are hopeful about the elections and their ability to bring fresh opportunities and shine a spotlight on the sector’s potential.”
Although he does not expect much change in the immediate short term, Staude indicates that 2020-22 would be enough time for a new government to make an impact. Long permitting processes, delays in issuing mineral titles, lack of liberation of cancelled concession, lack of action in canceling non-paid concessions and problems with the Mexican Tax Authority (SAT) are all factors he references that contribute to a negative image of Mexico. “One of our limitations is the inability of mining companies to obtain mineral titles and we would really like to see this rectified by a new government,” he says.
Staude explains that mining operations depend on a company’s ability to obtain the land for the concession and slow processes are forcing Riverside to take a new route. “We have five different amparos filed against the government in relation to mining titles,” he says. “Our partners do not understand why we need to take this route, and it is expensive, but ultimately this is the best legal way we can secure mineral titles it appears at this time.” He notes that Riverside spent US$6 million on R&D in 2017, but says if the company cannot move forward and obtain more concessions, this year the investment in Mexico will be significantly lower.
This is an exclusive preview of the 2019 edition of Mexico Mining Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy of Mexico Mining Review or check out the digital version.