"We've suspended new investment in Navidad until we have legislation in Chubut that will allow us to develop the project," said Pan American Silver Argentina's business director, Ricardo Zarandon.
Chubut's provincial governor sponsored legislation that will introduce a new 5-percent net smelter-return royalty on top of the current royalty of 3 percent, according to a report by The Wall Street Journal. Earlier this year, the company stated that it would suspend further investment in the project if the legislation came into law.
At the time, Pan American noted, “[t]he Company's initial review of the effects of the proposed legislation, when coupled with the current inflationary environment in Argentina, indicates that the increased provincial participation will render the Navidad project uneconomic at any reasonable estimate of long-term silver prices.”
No bill has been passed, but the uncertainty has clearly proven too much for the company. Pan American has spent over $82.5 million developing the project over the past two years, according to its website.Metals Channel reported that a study of analyst recommendations at major brokerages shows that Silver Wheaton (TSX:SLW) is the number one broker analyst pick on the Metals Channel Global Mining Titans Index. The index is comprised of the top 50 global leaders from the metals and mining sector, and the companies on it are continuously updated to reflect the changing market environment. Based upon Silver Wheaton's current agreements, its forecast attributable production in 2012 is approximately 28 million silver equivalent ounces. That amount is expected to rise to 48 million silver equivalent ounces by 2016. Junior company news Santacruz Silver Mining (TSXV:SCZ) announced the completion of an updated NI 43-101 mineral resource estimate on its Rosario project, located in Mexico's Charcas Mining District. It listed highlights including measured mineral resources of 270,000 tonnes grading 210 g/t silver, 0.94 g/t gold and 3.69 percent zinc. Indicated mineral resources were recorded at 711,000 tonnes grading 163 g/t silver, 0.88 g/t gold and 2.6 percent zinc. The company confirmed that both the Rosario I and II veins are open in all directions, with 2 kilometers of untested NE-SWE strike length. Limited drilling below the 200-meter level provides potential to further expand the resources.