Mexico is a mining-friendly country with stable political and financial systems, a long mining history, rational environmental policies, excellent infrastructure, and a firm government and bureaucratic commitment to the development of natural resources. It offers the exploration and mining industry a favorable investment and operating climate in a country enriched in mineral resources.
World-class mining districts and mines are present throughout Mexico. The country is a major producer of silver, gold, copper, lead, zinc and molybdenum. Numerous new mining operations have recently commenced or are currently in development, and the country has recently become a focus for exploration and mining companies of all sizes.
Caza Gold's projects are located in Chihuahua State in the well known Sierra Madre Occidental Gold-Silver Belt of northwestern Mexico. This historic trend has produced approximately 40 million ounces of gold and 2 billion ounces of silver over the past 400 years.
Numerous country-risk surveys place Mexico near the top of the “Most Favored” list when assessing and comparing the suitability and risk of investment. For example, Mexico was ranked 4th in the 2009 and 2010 assessments carried out by Behre Dolbear & Company Inc, out of 25 countries which host major exploration and mining operations. Only Canada, Australia, and Chile were ranked higher.
Mexico has a 500-year mining history, with mining forming an integral part of the national and local economies. Culturally, Mexicans look very favorably on mining at all levels. There is strong government support for exploration and mining activities, and this is enhanced by the various bureaucratic departments and organizations charged with administering and assisting the industry.
Politically, Mexico is one of the most stable countries in Latin America, with favorable tax structures and a strong government commitment to natural resource development. Mexico during 1990-1992 radically overhauled a nationalistic mining law for the express purpose of attracting foreign mining investment, which has been very successful. This overhaul was accompanied by privatization of virtually all of the Mexican governmental mining holdings and an active retreat from competition with the private sector in mining exploration and development. Mexico has demonstrated a strong commitment to increasing transparency in all aspects of government, and regulation of the mining industry is arguably the most successful of these. Despite this, Mexico remains under-explored. Major discoveries have been made over the last 20 years by application of modern geological and geophysical concepts and methods, with every expectation that exploration will continue to reveal important new deposits in the near future.
Mexico has strong environmental laws and regulations, and a commitment to uphold them. Mining companies that follow Mexican laws and internationally accepted environmental practices can expect their development projects to advance without undue interference or delay.
Mexico has been a party to the North American Free Trade Agreement (NAFTA) since 1994 and thus has a tax and trade regime comparable to the USA and Canada. It operates under western-style legal and accounting systems, with a contemporary taxation system and no mining royalties.
The Mexican mining community is well trained and educated, both for professional and technical personnel, and at the skilled labor level. Specialized and standard mining equipment and services are readily available with good technical support. The Mexican Geological Survey has excellent geological databases and other technical resources readily available at little or no cost.
Mineral exploration and mining in Mexico are regulated by the Mining Law of 1992 (amended in 2005), which establishes that all minerals found in Mexican territory are owned by the Mexican nation, and that private parties may exploit such minerals (except oil and nuclear fuel minerals) through mining licenses, or concessions, granted by the Federal Government.
A Mining Concession gives the holder both exploration and exploitation rights subject to the payment of relevant taxes. Mining Concessions have a term of 50 years from the date the exploration concession was registered. Concessions may be granted to (or acquired by, since they are freely transferable) Mexican individuals, local communities with collective ownership of the land known as “ejidos”, and companies incorporated in Mexico pursuant to Mexican law.
Put all of the above in the context of Mexico's stable political climate, a 500 year mining history, rational environmental policies, excellent infrastructure and a firm government commitment to natural resources development and it is clear that Mexico is a favorable climate in which to invest exploration and development capital.