Issue link: http://resourceworld.uberflip.com/i/355430
16 www.resourceworld.com A U G U S T / S E P T E M B E R 2 0 1 4 f For many years now, Mexico has been a country of choice for mineral explorers; however, it's not without its challenges. Exploration companies everywhere are finding it harder to raise funds for explo- ration programs and that has resulted in a slowdown in exploration in general. In an interview, Peter Smith, P.Eng., President of Smith Foster & Associates Inc., a company which consults on mining projects in Mexico, told Resource World that there are still many areas that have not been fully explored. Smith pointed out that a new tax regime was implemented in Mexico at the end of last year. "The higher taxes and increased royalties are significantly higher and there are new taxes as well," said Smith. "Some might argue that this levels the playing field in Mexico compared to other coun- tries but there is a negative impact on the bottom line." There are also higher costs for explor- ers such as increased fees for holding concessions. As far as the occasional reported violence in Mexico due to the activity of drug car- tels, Smith notes that it depends in which part of Mexico you are operating. "From what I understand, there are more problems closer to the US border in the north," said Smith. "I would say that the security and safety issues we have experienced are no worse than other countries we have worked in. We take sensible precautions and stay away from trouble areas. I don't feel uncom- fortable in the areas where I go." Smith remarked that the challenges facing explorers in Mexico are typical for mining companies wherever they operate such as finding good suppliers and reliable partners to work with. "There is a good pool of skilled labour in Mexico, so that's not a problem, although that depends on what part of the country you are in. Most of the workers we hire are Mexican nation- als. Obtaining sufficient water can be an issue in some areas." Below are summaries of the activities of a selection of explorers and producers. Agnico-Eagle Mines Ltd. [AEM-TSX, NYSE] owns and operates the Pinos Altos underground and open-pit gold mine in Chihuahua with secondary silver, and mill and heap-leach operations. The satellite Creston Mascota gold pit and heap-leach operations have been in production since 2011. Exploration is focusing on Creston Mascota, Sinter, Cubiro, Cerro Colorado and Reyna de Plata satellite zones to expand mining operations. Alamos Gold Inc. [AGI-TSX, NYSE] is a mid-tier, low cost, gold producer that owns and operates the Mulatos Mine in Sonora, a conventional open-pit, heap-leach operation with gold recovered through a carbon-in-column circuit. The mine oper- ates at a throughput rate of 17,500 tpd (including 500 tpd from the gravity mill). For Q1 2014, Alamos sold 32,161 ounces of gold at an average realized price of US Mexico still a favoured exploration destination by Ellsworth Dickson The decline (sloping tunnel) is well underway at the advanced-stage Juanicipio silver project in the Fresnillo District, Zacatecas, Mexico, a joint venture between MAG Silver, 44%, and Fresnillo plc, 56%. Photo courtesy MAG Silver Corp.