- President pledged support for $1 billion-plus Navidad project
- Company sees ‘hopeful signs’ of lifting open-pit restrictions
Pan American Silver Corp. has everything in place to start mining one of the world’s largest silver deposits. There’s only one problem: an Argentine province’s blanket ban on open pits.
Chairman Ross Beaty is hoping the country’s new President Mauricio Macri will help him convince authorities in Chubut province to lift the ban so his company can spend more than $1 billion on a mine that would start producing about 12 million ounces.
Macri -- who has repealed capital and currency controls and mineral export taxes since taking office in December to lure back investment -- pledged his support for the Navidad project at a meeting in Buenos Aires Tuesday, Beaty said. The new federal government is trying to convince provinces to follow suit by introducing more investor-friendly regulation.
The Vancouver-based miner is seeing “hopeful signs” that the ban will be lifted for a mid-sized mine that will generate thousands of jobs in a scarcely populated area of southern Argentina, Beaty said in an interview after meeting with Macri.
The company already has financing in place for Navidad’s $600 million first phase. Development would take 18 months to two years.
In neighboring Santa Cruz province, Pan American Silver was going to close an operating silver mine because of the controls introduced by Macri’s predecessors. The project got a reprieve with the change of federal government, Beaty said.
Now he’s is looking to boost production in the country with Navidad in a bid to tap a long-term silver bull run that he says will withstand monetary policy “noise.” The white metal is up 36 percent his year as low interest rates boost the appeal of investments that don’t pay dividends or coupons.