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Silver Bull Resources Inc T.SVB

Alternate Symbol(s):  SVBL

Silver Bull Resources, Inc. is a Canada-based exploration-stage company. The Company owns a number of property concessions in Mexico within a mining district known as the Sierra Mojada District, located in the west-central part of the state of Coahuila, Mexico, near the Coahuila-Chihuahua state border approximately 200 kilometers south of the Big Bend of the Rio Grande River. The Sierra Mojada Project site is situated to the south of the village of Esmeralda, on the northern side of a major escarpment that forms the northern margin of the Sierra Mojada range. The principal mining area extends for approximately five kilometers in an east-west direction along the base of the precipitous, 1,000-meter-high Sierra Mojada Range. The Sierra Mojada Project comprises over 20 concessions consisting of approximately 6,496 hectares (about 16,052 acres). The Sierra Mojada concessions contain a mineral system which can be separated into two distinct zones: a silver-rich zone and a zinc-rich zone.


TSX:SVB - Post by User

Post by tamarion Feb 01, 2023 10:47am
245 Views
Post# 35259406

AMLO/Mexico article, interesting point on court case

AMLO/Mexico article, interesting point on court caseIs Mexico’s Mining Sector Too Risky For Foreign Investors?
Nathaniel Parish Flannery
Contributor
Latin America-focused political analyst                             Jan 26, 2023, 07:24am EST
Mexico has a long history of mining activity. Mexico is the world’s top producer of silver. Mexico is also the 2nd most important gold producer in Latin America. In recent years, however, Mexico’s mining sector has become increasingly affected by risks from local protesters, organized crime groups, and legal uncertainty. In 2015, one Canadian mining executive sparked controversy by publicly bragging that his company had a “good relationship” with cartels operating in Sinaloa, Mexico. In 2022, six mine employees were kidnapped by armed civilian gunmen in the state of Guanajuato, Mexico. In 2022, thieves stole 20 shipping containers filled with silver and gold at a port facility in the state of Colima. In early 2023 protesters in Michoacan blockaded the entrance to a mine owned by Ternium after two local environmental activists disappeared. Each state in Mexico presents a different risk profile for mining sector companies. Sonora, Mexico’s mining epicenter, presents a very different set of risks than states with less well-established mining histories such as Puebla and Veracruz. Foreign executives doing due diligence on potential mining investment projects in Mexico need to fully understand the range of risks affecting particular mines. To discuss what’s happening in Mexico’s mining sector, I reached out to Douglas Coleman, CEO of the Mexican Mining Center.

Nathaniel Parish Flannery: What three words would you use to describe Mexico’s President Lopez Obrador’s attitude towards the mining sector?

Douglas Coleman: I’d describe AMLO’s attitude towards Mexico’s mining sector as distrustful, antagonistic, and uninformed. I believe foreign ownership of mining concessions goes against AMLO’s nationalistic ideology and he views the industry as a necessary evil. He often makes statements accusing Canadian companies of profiting from Mexico’s mineral resources while leaving more harm than benefit to the communities where they operate. When he declared a moratorium on new mining concessions, one of his reasons was that most of the concessions were being used for speculation in the stock markets and were not being developed. He also stated that mining concessions cover over 40% of Mexico’s territory, whereas the Mexican Chamber of Mines reports that mining concessions cover 8.6% of Mexico’s territory and only 0.10% is affected by mining operations. AMLO’s public stance scares away potential investment, however, mining has been an essential part of Mexico’s culture and economy for over 500 years, and with Mexico’s rich endowment of mineral resources, the economic forces are prevailing over the political resistance. While worldwide investment in mining exploration has dropped to about half of what it was 10 years ago, Latin America continues to be the top region for mining exploration, receiving approximately 24% of worldwide investment during 2021, with about a quarter of that investment going to Mexico, making it the most attractive country for mining exploration in the region.

Parish Flannery: Overall, what grade would you give AMLO for his mining policies?

Coleman: I would give AMLO a C-. His policy of no new mining concessions has crippled mining exploration in Mexico and has caused the greatest negative impact on the industry since the effects of this decision will be felt for years to come. He has been openly hostile by saying “No to the mine” in reference to the Concordia Gold Project of Invecture Group near La Paz, Baja California Sur and by cancelling the environmental permits for expansion at the El Boleo Mine in Santa Rosala, Baja California Sur. He has appointed anti-mining people to key positions in the regulatory agencies that oversee the industry such as the appointment of Maria Luisa Albores Gonzlez, Director of SEMARNAT, Mexico’s environmental agency, who stated this year that she would not issue any permits for open-pit mines, and Raquel Buenrostro, Secretary of Economy who created an outcry among mining professionals when she falsely declared that mining companies only pay 0.002% taxes on their income when in reality the mining industry is one of the highest taxed industries in Mexico. CAMIMEX, the Mexican Chamber of Mines, reports that the tax burden on the mining industry in Mexico is among the highest in the Americas with Mexico at 52.68% of taxable income vs the next highest being Peru at 39.93%. AMLO declared only essential industries would be allowed to function during the COVID pandemic and did not include mining in that list. AMLO announced his decision to nationalize lithium in 2022, effectively putting a halt to the potential development of lithium in Mexico. AMLO did however reverse his decision three months into the pandemic and included mining as an essential industry, and also quietly allowed the mine expansion in Santa Rosala after a public referendum showed overwhelming support for the mine, so I give him a C- as opposed to a failing grade.

Parish Flannery: What is the number one risk that foreign mining companies need to understand when considering buying assets in Mexico?
Coleman: I believe the number one risk in Mexico for mining companies is the question over the legality of their mining concessions with respect to indigenous consultation. As in most of the world, good community relations are essential for a successful mining operation in Mexico. In the northern part of Mexico, where mining is most dominant, there is a lot of support for the industry at the local and state level, and public opinion is in favor of responsible mining. Many mining companies strive to be model citizens in the communities where they operate, and corporate social responsibility (CSR) is considered a priority. The southern part of Mexico however is mostly populated by indigenous communities that view mining with distrust and are easily swayed by outside groups to oppose all mining activities, including exploration. One case in point is Almaden Mineral’s Ixtaca project located in the southern Mexican state of Puebla which is opposed by a coalition of NGOs in spite of the company’s transparency and excellent community outreach. The case is currently in the Mexican Supreme Court where the validity of Almaden’s mining concessions is being challenged since the company did not have approval from the local community upon staking the concessions. This case is being used to set precedents as to whether the Mexican Mining Law is constitutional. Under the current law, indigenous consultation is not required for staking mining concessions and is only required as part of the environmental permitting process prior to going into production. What the supreme court decides could possibly put at risk the validity of mining concessions across the country, so investors and mining professionals are carefully following this case.

https://www.forbes.com/sites/nathanielparishflannery/2023/01/26/is-mexicos-mining-sector-too-risky-for-foreign-investors/?sh=8225f2042af2

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