1.
Mining in Mexico PDAC Toronto; March 2012 E. LunaMexico Mining Seminar at PDAC 2012 3/7/12 1

2.
Mining in Mexico Access to land • “Ownership” not really the issue • Three types of ownership • Private property • It can, and should be, bought • Ejidos • Only individual parcels can be bought • Temporary Occupation agreements are widely used • Agrarian Communities • Hardest to negotiate • Get a local (firm or person) to negotiate • Language barrier • Different culture • Lack of knowledge of legal provisions • Cost of gaining access has increased • Be prepared to pay top pesoMexico Mining Seminar at PDAC 2012 3/7/12 2

3.
Mining in Mexico Royalties-1 The Economist, Leaders, February 11, 2012Mexico Mining Seminar at PDAC 2012 3/7/12 3

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Mining in Mexico Royalties-2 • It has happened in other countries • Caused by high prices and economic crises • Can not be a special tax (unconstitutional) • In principle, we are opposed to it • Thinking creatively • Design it as an additional levy on concessions • Use it as a credit to VAT and/or other taxes • Triggered by a minimum price • Apply proceedings directly to Municipalities • Has to have built-in accountability • Work with Congressmen is being doneMexico Mining Seminar at PDAC 2012 3/7/12 4

5.
Mining in Mexico Unions • Having a union is not unavoidable but it is difficult to escape from it • Three different national Unions • National leadership weak in every case • One located in Fresnillo • One located in Monterrey • One located in Mexico City-Vancouver • Relations with Locals should be close and respectful • They should decide • Due to current prices, great expectations about salaries and bonuses • Tug-of-war between local and corporate management • Agree on a collective contract that is: • Simple • Understandable • With very few different jobsMexico Mining Seminar at PDAC 2012 3/7/12 5

6.
Mining in Mexico Health and Safety • Hindrances • Machismo • Low formal education • Lack of training • Health related • Drug abuse • Physical conditions • Assistances • Use of families • Should be written within the Collective Contract • Training • Start with staff: Word convinces but example dragsMexico Mining Seminar at PDAC 2012 3/7/12 6

7.
Mining in Mexico Community Relations • Strongly intertwined with Access to Land • Patronizing and Paternalism shouldn’t be applied • Make communities part of the project • Mess halls • Garbage collection • Some freights • General housekeeping • Shops • Sewing -coveralls, vests, etc. • Poultry farms • Bakeries • Set up a team of NATIONALS to handle this matter • Foster education, formal and informal • Promote the incorporation of a Community Development Committee. • Town people • Company • Local governmentsMexico Mining Seminar at PDAC 2012 3/7/12 7

8.
Mining in Mexico Operations • It is best to develop or choose a local team of operators • The only long term solution • Convenient to support Mexican Earth Sciences Schools • Students • Teachers • Using market oriented provisions • Reinforce training and developmentMexico Mining Seminar at PDAC 2012 3/7/12 8

9.
Mining in Mexico Mining and environmental regulations • Participation in the writing of regulations is necessary • Mexican Chamber of Mines • State and Federal Congressmen • State Governors • Support for adequate application and interpretation • Mexican Chamber of Mines • Mining Task Force of Can Cham • Have lawyers and advisors with the right RolodexMexico Mining Seminar at PDAC 2012 3/7/12 9

10.
Mining in Mexico Mexico Economic Outlook • Mexican-and Canadian-economy tangled with US economy • Outlook is fair • Government (and citizens!) has to bring about several changes • Privileges have to diminish • Unions • Government monopolies • Big business • States have to be financially independent • With accountability • As the economy improves, there’ll be better: • Security • Labor pool • Canadian miners in Mexico have helped in curtailing duopolyMexico Mining Seminar at PDAC 2012 3/7/12 10