Land deal paves way for Torex

Torex Gold Resources’ (TXG-T) work on the community relations side of the mining business is bearing fruit.

The Toronto-based company reached a deal with landholders at its Morelos gold project in Mexico that paves the way for mine construction.

The company says a long-term lease agreement has been negotiated with the Real del Limon Ejido that covers 2.2 sq. km of ground needed to dig out the El Limon open pit.

To fulfill the project’s mining potential, however, Torex had to come to agreements with two communities on the property, because both will be moved if the project pushes ahead. It says 104 households need to be relocated.

The second Balsas Ejido community lies southeast of El Limon, where Torex plans to build a processing facility and mine a second open pit at the Los Guajes deposit.

Torex had previously come to terms with the Balsas Ejido to obtain necessary land.

With the land agreements largely in place the company is focusing on permitting and tidying the small number of outstanding, individually owned land parcels. It says the remaining land deals should be completed shortly.

The outstanding land comprises 22 individually owned parcels at Rio Balsas Ejido and Real del Limon Ejido. Torex says it is resolving administrative issues, such as succession rights and absentee ownership.

The Morelos project sits in Guerrero State’s Morelos gold belt, 180 km southwest of Mexico City.

The El Limon deposit has measured and indicated resources of 18.2 million tonnes grading 3.31 grams gold for 1.95 million oz., while Los Guajes has measured and indicated resources of 28.8 million tonnes grading 3.2 grams gold for 2.97 million oz. gold.

Combined, the two deposits have inferred resources of 8.7 million tonnes grading 3.2 grams for 890,000 oz. gold.

If the permitting process succeeds and a bankable feasibility study wraps up by the end of July, the project will enter construction by early 2013.

Before that time investors can expect an updated resource estimate that should be out by the end of April. 

Torex also needs to wrap up project financing. The company has over $90 million in the treasury and is fully funded for its exploration program and feasibility.

When the news released on March 21, the company’s shares were up 3%, or 7¢, to $2.08 on 6.57 million shares traded.