Industry News – Wed 11 Dec, 2013

Arturo Prestamo, President of Santa Cruz Silver Mining, discusses the taxation of mines in Mexico

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Arturo Prestamo Elizondo
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Comments:
  1. On December 11, 2013 at 2:18 pm,
    BUD says:

    Greed and power drive governments, and if the government of Mexico decides that they want more revenue from mines they will get it. If you want to invest in mining in any foreign country, be prepared to lose your holdings. Governments in the end always kill the goose that lays the golden egg. Always!!!

    • On December 11, 2013 at 9:28 pm,
      Big Al says:

      I know a bit about this part of the world.

      Of course you are correct in principle, but in reality I don’t see it happening soon. The off shore mining companies are just too important to Mexico at this time.

    • On February 3, 2014 at 10:25 am,
      Bayu says:

      steve-no, i get it.my point is just that we are operating in such a bizrrae environment right now full of weird if not flat out unprecedented monetary influences that the whole thing is a black swan.normal indicators, especially single factor ones, just don’t work.i agree that a drop in V CAN indicate a slowdown (and i believe the economy stalled utterly in h2 2011) but my point was that is does not ALWAYS indicate one.i’m just leery of it as a single factor predictor. it can mean a number of things.witht he kind of m2 growth we are seeing in conjuntion with pretty much zero real growth, one would expect V to drop.might it be dropping more because of a slowdown? yes. but separating that from the drop based on M growth and finding an accurate way to assess price is no easy task.i’m just pointing out that as a single factor, its predictive value is low right now.bond spreads often mean somehting as well, but they are worthless right now as a predictive indicator and have, in turn, made things like the LEI worthless as well.this is the kind of market where you have to tear everyhting down to first principles and do all the math.the traditional 1 factor indicators are badly tainted if not useless. real gdp and cpi are a mess. u3 is an even bigger joke than usual. LEI etc are all being driven more than 100% by bond spreads and equity prices, which, in turn, are being driven by the fed.this is the kind of situation you (hopefully) see once in a lifetime. it would be complex enough if the federal agencies tasked with reporting data were not so determined to distort the facts and lie to us.the census guys seem to be the only ones trying to paint an honest picture.compare their inflation data (on trade) with the BLS or BEA and it’s pretty shocking.the BLS is over 70% lower and the BEA is more like 90% (and just flat out farce).we are in a market where no one knows what to believe or when the tide of easy money might start going back out.it’s going to be pretty sporty for a while.

  2. On December 11, 2013 at 5:01 pm,
    Chris says:

    I am sure Mr Arturo is a fine man, but he is just talking his “book”. Not that I blame him, I would in his position. This is very “scary” IMHO. It is a very big deal & 8% will effect profits seriously! Sure the Mexican government loves the mining industry, building schools, providing water, bringing energy, etc. Now they want the profits. Sure mining company’s, please stay in Mexico “we love you” you are important! We even might let you make a few profits, but the “cream” of the profit–8%–goes to us. But pleeease stay in business for us to rape you, OK?

    Bud has it right……….

  3. On December 11, 2013 at 9:33 pm,
    Big Al says:

    First of all, Santa Cruz is a Mexican company for all practical purposes.

    Secondly where did 8% become a killer tax. What do literally millions of Californians and Oregonians pay to their state governments? One neck of a lot more than the “killer” 8%

  4. On December 12, 2013 at 10:26 am,
    Chris says:

    Well, it depends on what the margins are in the mining industry in Mexico. TWT if you or I are right……..I hope you are! I know the Casey group and others are very leery of Mexico right now. Perhaps other company’s don’t have the large margins that Santa Cruz must have.
    I will try and figure out for me the difference between a personal income tax and a royalty tax on a mining company.