Cerro San Pedro - Mexico
| Royalty: | 1.95% GR |
|---|---|
| 2009 Revenue: | $2.245 M |
| Operator: | New Gold Inc. |
Franco-Nevada has a 1.95% GR royalty on precious metals recovered from the Cerro San Pedro project located in central Mexico near San Luis Potosi. The open pit mine with run-of-mine heap leaching is owned and operated by New Gold Inc. (“New Gold”).
In September 2009, a Mexican Federal Court ruling nullified the Environmental Impact Statement for the Cerro San Pedro Mine. New Gold filed an appeal to overturn the Federal Fiscal Administration Court’s ruling to cancel the project’s Environmental Impact Statement. New Gold was then notified that they must suspend mining operations at Cerro San Pedro. In December 2009, New Gold announced that they were granted an injunction related to the suspension of operations at Cerro San Pedro. The court ruling temporarily overturns the Mexican environmental enforcement agency’s order to suspend mining which would allow the mine to continue operating while the appeal goes to trial and the court hears the arguments.
In March 2010, the restrictions to the Cerro San Pedro mine's explosives permits were removed which allows full operations to resume. The restrictions were lifted following a ruling by a Federal District Court that overturns an earlier court order prohibiting the use of explosives at the mine.
On January 25, 2010, New Gold reported that in 2009 production increased at Cerro San Pedro due to higher tonnes placed on the leach pad, partially offset by lower gold grade. In 2010, Cerro San Pedro is expected to produce between 95,000 and 105,000 ounces of gold and between 1.4 and 1.6 million ounces of silver at a total cash cost between $390 and $410 per ounce sold, net of by-product sales.
