Sunday, July 9, 2017

Mexico owes Goldcorp and other Canadian miners more than US$360 million

Mexico’s tax agency is holding over US$360 million in tax rebates owed to six Canadian miners, including US$230 million to Goldcorp Inc. Goldcorp declined to comment on its outstanding refund, which represents 142 per cent of its 2016 net profit and 6 per cent of its full-year revenue.

Torex Gold Resources which began commercial production at its Mexico mine last year is waiting on a refund of US$66.5 million. Endeavor Silver Corp is owed $15.6 million. Alamos Gold is owed about $26 million and Agnico Eagle Mines nearly $18 million. Mexico’s Tax Administration Service acknowledged the problem. "... we are carrying out more in-depth assessments.”
Mining companies’ appetite for investing in Mexico has soured in the face of the withheld rebates as well as ongoing security threats and high royalties. Toronto-based McEwen Mining, which saw its Mexican mine robbed at gunpoint of 7,000 ounces of gold in 2015, said it had a $6.2 million refund outstanding.
The value of Canadian mining assets in Mexico totaled US$14.4 billion in 2015, second only to U.S. assets worth an estimated $24.8 billion. Unlike sales tax, which only applies to a final purchase, Mexico’s 16-per cent VAT is levied every time value is added during the production of goods or when they are sold.