So here’s the situation in relation to the budget deal that has TAHO up in arms. The current agreement with the government is a voluntarily agreed 5% royalty (THO and GG made a big fuss about signing this deal) which would not be added to the new proposal, but replace it (something a LOT of Canadian anal ysts have got wrong this morning…checking the fine print is your job, dumbasses). It’s one of the most profitable silver mines in the world on a pure costs basis, salaries are rock bottom compared to just about anywhere outside of deep Africa, the tax regime is benign, it gets corp tax breaks that are currently slipping its mind and what’s more, THO wants to stop paying for its community program and get the government to pay from the extra 5% it wants to charge. Because that’s all we’re talking about here, an extra 5% royalty.
There’s also plenty of doubt that these changes go through, as the 11th hour budget deal that includes these new mining royalty laws has come in for a lot of criticism inside Guatemala for both its substance and the nefarious style in which it was suddenly sprung upon parliament and quickly passed. President Otto Pérez Molina has a veto and if he sticks up for his mining pals the way he’s done before, he’ll use it.
So, bottom line: THO is moaning because even if the law passes, it will have to start giving a reasonable percentage of its profits to its host country instead of the very cheap bonanza deal it’s been enjoying up to now. And it can go fuck itself.
PS: And yes, to answer the mails, that above does mean that I think the selling in TAHO today is overcooked and that it’ll bounce back very quickly. Didn’t they teach you freakin’ reading comprehension at your school, dumbass?