Land deal paves the 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 land holders at its Morelos Gold Project in Mexico that paves the way for mine construction.

The company said a long-term lease agreement has been negotiated with the Real del Limon Ejido that covers 222 hectares of ground needed to dig out the El Limon open pit.

To fulfill the projects mining potential, however, Torex had to come to agreements with two communities on the property, as both will have to be moved if the project is to push ahead. In all it says 104 households need to be re-located.

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

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

With the land agreements largely in place the company will now focus on beginning the permitting process and tidying the remaining small number of individually owned land parcels that are still outstanding. It says those remaining land deals should be completed shortly.

The outstanding land is made up of 22 individually owned parcels at both the Rio Balsas Ejido and the Real del Limon Ejido. Torex says it is in the process of resolving administrative issue, such as succession rights and absentee ownership.

The Morelos project sits in the Morelos Gold Belt of Mexico’s Guerrero State roughly 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. of gold.

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

Provided the current permitting process is successful and a bankable feasibility study gets completed by the end of July, as anticipated, the project will go into construction in 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 finalize project financing as the company currently has over $90 million in the treasury and is fully funded for its exploration program and through feasibility.

In Toronto on March 21 the company’s shares were up 3% or 7¢ to $2.08 on 6.57 million shares traded.