Scotia on Torex Final Long-Term Land Use Agreement in Hand
Event
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Torex announced it has signed the final long-term land use agreement
with Real del Limon Ejido in Guerrero, Mexico.
Implications
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The land use agreement with Real del Limon Ejido covers the
remaining common use land needed for the mining and development of
the Morelos gold deposit.
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The terms of the agreement are consistent with the previously signed
land use agreements. We conservatively estimate a 4% royalty on the
project.
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Except for agreements with a small number of individually owned land
parcels, which the company expects to have in hand shortly, the
company can initiate the permitting process.
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In our view, this is an important milestone which helps de-risk the
Morelos project as Torex prepares to update its resources by the end of
April and deliver a feasibility study by the end of July.
Recommendation
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We continue to believe Torex represents good value, given its resource
growth, and exploration upside "South of the River." We reiterate our
$3.50/share one-year target price