Noranda, Placer Dome open Mexican offices

North America’s top mining companies are moving in to take advantage of the Mexican government’s attempt to attract investment by allowing foreigners to purchase full control of local concerns.

Noranda (TSE) and Placer Dome (TSE), based in Toronto and Vancouver respectively, are in the process of opening exploration offices in Hermosillo, the capital of the northwestern state of Sonora.

New York-based Amax (TSE) will conduct future exploration activities from an exploration office in Mexico City, where it is also attempting to register a local Mexican affiliate.

While all three have maintained a presence in Mexico through minority interests in local companies, they are preparing to take a new look at exploration possibilities that mining consultants say have barely been scratched.

“The key to the renewed interest in Mexico is the government’s decision to allow pyramiding, a process by which foreign investors can control mining assets by purchasing a stake in both a project and its owner,” says Bill Mercer, manager of Latin American exploration at Noranda.

International mining executives also like the fact that outsiders can now purchase 100% of Mexican companies for up to 12 years from the first sale of mineral products by that company. Under the old rules, foreigners could only purchase a maximum of 49% in local companies.

While Placer Dome and Amax are still drawing up exploration programs, Noranda and 40% owned Minera Las Cuevas will spend about $2 million this year in Mexico where skilled labor can be hired for US$4 a day.

The plan is for Noranda to have Cuevas as a joint venture partner on gold and silver projects and look for porphyry copper on its own, Mercer told The Northern Miner recently.

A list of around 30 companies that are either active or preparing to become active in Mexico includes American Barrick Resources (TSE), Campbell Resources (TSE), Corona (TSE), Cominco Resources International (TSE) and Chutine Resources (TSE).