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« David Morgan Interview - Silver Summit Oct 2013 - Spokane | Main | Historic End Game - “A Collapse To End All Collapses” »
Thursday
Oct312013

Neutral on Mining Shares? Sell Mexico, Buy Canada

President Enrique Pena Nieto's fiscal reform bill is striking fear in the hearts and minds of mining executives operating in Mexico. Attached to the 2014 budget, the bill could be signed by as early as mid-November. Within it, the Mexican government has proposed a 7.5% mining royalty as a percentage of EBITDA. Once considered one of the most mining-friendly destinations, this proposal has industry executives singing a different tune.

Brad Cooke, CEO of Endeavour Silver (NYSE: EXK  ) has stated the combination of this tax increase and essential reinvestment into the mines would cost his company about 90% of their current profits . Granted, if silver prices continue higher some of the perceived pain may subside, but what if they don't? This tax could squeeze the life out of mid-tier mining firms, such as Endeavour, that have gone all-in on Mexico.

To read this interview in full please click here

In September 2011 the Gold Bugs index, the HUI stood at 630 as gold prices peaked, since then both have trended lower with the HUI losing about 65% of its value. The bottom has been called a number of times and after such a dramatic decline its difficult not to think that we are there now. However, as we all know the timing of any investment is crucial to its success and that is exactly what we are trying to do here, trying to pick advantageous entry and exit points. If you would like to know which stocks we are buying and selling please join us atStock Trader our premium investment service.

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