- Political, financial and legal stability.
- Mining friendly jurisdiction.
- Considerable resource potential.
Tara Minerals is currently focused on acquiring and developing properties in the natural resource belt of the Sierra Madre Occidental and other prolific areas in the states of Chihuahua, Sonora, and Sinaloa, Mexico. Mexico, a country with a mining history which straddles almost 500 years and still weighs amongst the world’s largest metal producers. It represents a major mineral exploration ground. Although best known for its production of silver - over 10 billion ounces have been produced to date - the country also mines significant quantities of copper, gold, lead and zinc.
Mexico consists of a large and elevated plateau flanked by two volcanic mountain ranges, the Sierra Madre Occidental and Oriental, which meet in the south forming the Sierra Madre del Sur. Volcanic activity is responsible for the emplacement in numerous locations of a large number of precious and base metal mineral deposits that riddle the map of the Sierras Madre.
Mexico has benefited from considerable foreign investment into its mining industry. Some of the world’s largest mining companies have operations there. There are also almost 200 foreign publicly traded companies involved in exploration and mining activities in Mexico, the majority of which are North American based. Modern exploration techniques have recently been applied to Mexico by foreign explorers. A hefty pipeline of precious and base metal projects is now being unlocked. With copper, molybdenum, silver, zinc and oil prices at all-time highs, the stage is set for a major push in exploration, development and production.
Mexico is the fifth largest producer of lead and zinc. Political and financial stability, legal security for investors and its location next to one of the world’s top importers of resources are all positive factors impacting Mexico's mining industry today. Mexico is a very mining friendly jurisdiction and gives legal guarantees to foreign investors. Tara Minerals will continue to focus on Mexico.
In Mexico, Article 27 of the Mexican Constitution grants the ownership of essentially all minerals to the Mexican nation. The right to exploit those minerals is given to private parties through concessions issued by the Mexican government. The current Mining Law of Mexico was enacted in 1992. Concessions are granted on mining lots, the sides of which measure 100 meters, or a multiple of 100, except when adjoining lots (granted when there were no size requirements) require a smaller size. An exploration concession is granted to the first applicant that meets the requirements of the Mining Law, the most important of which is that the claimed area is deemed to be “free land”. Under the Mining Law, areas that are already covered by mining concessions or applications for mining concessions are not free, as well as reserved areas such as the coast and the seabed.
Exploration mining concession applications are filed at government offices. Exploration concessions are valid for six years and give their holders the right to carry out exploration work. While the concessionaire may keep the minerals obtained in the course of the exploration work, the mine may not be put into production. If the concessionaire wishes to continue exploration work beyond six years, or wishes to go into production, the concessionaire may, at any time before the expiration of the six year term, request an exploitation concession, which is valid for 50 years and renewable once for a similar term.
Mining concessions do not grant the holder right to enter or use the surface land of the mining lots. It is therefore necessary to obtain the permission of the surface owner for that purpose. Typically, a verbal authorization with no consideration is granted for prospecting and sample gathering. A simple letter agreement or contract is normally used for drilling, trenching, or basic road building. For more advanced exploration activities, a small monetary consideration is normally required. In some cases the concessionaire is also required to make minor improvements which benefit the local community such as fixing a road or fence or building an earthen dam. Building and operating a mine requires a more formal agreement. If an agreement cannot be reached with the surface owner, the Mining Law gives the concessionaire the right to request a temporary occupation of the land or an expropriation (or an easement for the construction of roads, power lines, water pipes, etc.). Compensation is set through an appraisal made by the federal government.
A concessionaire’s most important obligation is the performance of assessment work on the mining lots. A minimum amount of assessment work measured in monetary terms must be performed each year, depending on the size of the mining lot and, for an exploration mining concession, the number of years elapsed since its issue, pursuant to minimum investment tables established by the Mexican government. Assessment work may be done either through expenditures or the sale of minerals. A report must be filed in May of every year regarding the work for the previous calendar year. Lack of performance of the minimum work will result in the cancellation of the concession; payment to the government in lieu of required assessment of work is not allowed.
Concessionaires must comply with federal environmental regulations which generally require that mining activities be subject to an environmental impact statement authorization. Normally an environmental impact statement authorization can be obtained in six to twelve months from the date of its filing. However, mining operations which do not exceed levels established by the Mexican government are not required to file an environmental impact statement.
The Mining Law forbids concessionaires from removing mine timbering and supports and requires compliance with all safety rules promulgated by the Mexican government.
Mexican and foreign individuals, as well as Mexican corporations, are allowed to hold mining concessions. Although foreign corporations may not hold mining concessions, foreign corporations may, however, own Mexican corporations.