Mexico To Levy New Tax on Gold and Silver Miners

Mexican Mining Tax

Buy Gold Online

Check out the Smaulgld Gold Buying Guide

JM Bullion

Check out the Smaulgld Silver Buying Guide

Live Silver Prices
Live Gold Prices

Will Mexican Mining Tax Curb Silver Supply?

Late last month, the upper house of the Mexican Congress approved a new mining royalty tax. The Mexican mining tax would provide for a royalty of up to 7.5% on mining profits, plus a 0.5% tax on mining revenue.

Mexico, the largest silver producer in the world, is home to such mining companies as First Majestic (AG), Endeavor Silver (EXK), Alexco Resources (AXU), Auricana (AUNFF), Great Panther (GPL), Pan American Silver Corp (PAAS) and Silver Standard Resources (SSRI).

Mexico is also one of the largest gold producing countries in the world with GoldCorp (GG) having a large gold mine in the country. Junior gold miners Newstrike Capital (NES.V) and Westridge Resources (WST.V) also have presences in Mexico.

Shop Amazon – Countdown to Black Friday Deals Week

Reduction in Production

Will the new law, described as “mining reform” lead to a reduction in the world’s production of silver and gold?

Keith Neumeyer, First Majestic’s CEO said “If the law is passed as the government is presently proposing, it will majorly impact investment in Mexico.”

Bradford Cooke, Endeavor Silver’s CEO said recently regarding the new mining tax “If it goes through as is, our fourth mine will not be in Mexico.”

Sixteen mining company CEOs, including Endeavor’s Mr. Cooke placed ads in four major Mexican newspapers, requesting that Mexican President Enrique Peña Nieto not sign the mining tax legislation.

Great Panther seems to be moving ahead with plans to develop another mine in Mexico.

Many mining companies, however, have properties outside of Mexico and may decide to forego development of their Mexican mines if the new tax legislation is signed into law by the Mexican President.

Chuck Jeannes, Goldcorp’s CEO said that new tax will not cause Goldcorp to close its existing Mexican operations but it would make them hesitant to develop new mines in Mexico.

“My concern is that this will impede new investment in the country as opposed to cause us to shut anything down today.” Jeannes said.

Demand For Physical Gold and Silver Is Increasing

We have noted on this blog the tremendous demand seen recently in the east and west for physical gold and silver.

Demand for physical gold and silver is clearly on the rise and may be out stripping supply soon. The United States produced 32 million ounces of silver in 2012 and has sold over 39 million ounces of its 2013 silver eagles already this year.

Investment demand is higher in India and China as these charts show and industrial demand is projected to reach record levels in 2013.

Driving precious metals prices down via via naked paper short selling, spurs physical demand.

With demand for gold and silver remaining strong and production almost certainly to be reduced if the Mexican mining tax is signed into law, we ask again: Is a Gold and Silver Supply and Demand Price Adjustment Coming?

Get Free Updates From

Subscribe to and get the free In Case You Missed Itweekly email as well as updates and analysis on gold, silver, real estate and the economy.

Also get the free report “Twelve Key Differences Between Gold and Silver” when you subscribe.

Further Reading:

Silver Buying Guide

Gold and Silver Price Manipulation – Suspected

The Silver to Gold Sales Ratio – October 2013

The Silver to Gold Sales Ratio – September 2013

The Gold Silver Ratio vs. The Silver to Gold Sales Ratio

The West Sells Paper Gold While the East Buys Physical Gold

The Price of Silver & Real Estate

Buying Physical Gold and Silver

Twelve Ways Silver is Different Than Gold

Is a Gold and Silver Supply and Demand Price Adjustment Coming?

JM Bullion

Please visit the Smaulgld Store for a larger selection of recommended Kindles, books, music, movies and other items.

Or you can support by making all your Amazon purchases through the search widget below and by ordering your gold and silver by clicking on the JM bullion ads on the site:

Buy Gold and Silver

DISCLOSURE: Smaulgld provides the content on this site free of charge. If you purchase items though the links on this site, Smaulgld LLC. will be paid a commission. The prices charged are the same as they would be if you were to visit the sites directly. Please do your own research regarding the suitability of making purchases from the merchants featured on this site.

The content provided here is for informational purposes only. Making investment decisions based on information published by Smaulgld (SG), or any Internet site, is not a good idea. Accordingly, users agree to hold SG, its owner and affiliates, harmless for all information presented on the site. SG presents no warranties. SG is not responsible for any loss of data, financial loss, interruption in services, claims of libel, damages or loss from the use or inability to access SG, any linked content, or the reliance on any information on the site.

The information contained herein does not constitute investment advice and may be subject to correction, completion and amendment without notice. SG assumes no duty to make any such corrections or updates. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. SG disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result.

Post Navigation