PART I, CARTOGRAPHY OF MINING PROJECTS

Servicios Universitarios y Redes de Conocimientos en Oaxaca (SURCO) presents the first part of the research carried out this year 2018, which analyzed 15 mining projects in Oaxaca. This work focuses on 7 projects of the U.S. mining company Gold Resource Corp (GRC), whose subsidiary in Mexico is Don David Gold Mexico S.A. de C.V., its area of influence includes municipalities of Central Valleys and the Sierra Sur in the state of Oaxaca.

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GOLD RESOURCE CORP or DON DAVID GOLD MEXICO MINING PROJECTS

Servicios Universitarios y Redes de Conocimientos en Oaxaca (SURCO), presents the first part of the research carried out on mining projects in Oaxaca. This research focuses on the U.S. mining company Gold Resource Corp (GRC), with Don David Gold México S.A. de C.V. as a subsidiary in Mexico. Its area of influence includes the municipalities of Valles Centrales and Sierra Sur in the state of Oaxaca.

About This Work

The concern originated after reviewing several tables of mining projects in the state of Oaxaca, most issued by requests for access to public information and others by the State Mining Panorama. These databases lack a breakdown of the concessions that make up each project. In addition, in many cases they only mention one municipality for each project, although the concessions cover more than one municipality; in other cases they mention municipalities that are not part of the concession area. In addition, there are various data related to mining projects in official sources that contradict each other.

This material is intended to be a tool to clearly locate mining projects in Oaxaca. The main product of this study is a map showing the projects with their respective concessions and concession titles. This visualizes the municipalities affected by the concessions, and therefore, by the mining projects. The map we present highlights in beige the concessions in the area that belong to other companies and are not part of the GRC projects.

Methodological process

At first, government and company sources were compared; weaving the information from the two to understand the extent of mining projects. Then the information available on the company’s websites, such as press releases, annual reports (2015 and 2017), were used to locate the concessions for each project. The documents from federal agencies were contrasted with the responses to the requests for public information (from 2014 file 0001000102914, from 2017 file 0001000165917 and from 2018 file 0001000026318) available in the transparency portal. The data of the Sistema Integral sobre Economía Minera SINEM, the Servicio Geólogico Mexicano SGM, the Sistema Integral de Administración Minera SIAM and the layer of concessions of Cartografía Minera were downloaded from the open data portal of the federal government.

Subsequently, the concessions involved were selected from the spatial layer of the Cartografía Minera, and overlayed with the layer of municipal boundaries of INEGI, in order to make the polygons of each project and identify the municipalities involved. All this analysis was done through the open source program QGIS.

It is worth mentioning that many of the documents published by the company are in English, mainly because they are listed on the New York Stock Exchange, as well as to announce their work plans and thus continue looking for investors. On these sites they expose how well they are doing by pointing out the tons of minerals they extract, the minimum they invest and the exponential profits in dollars.

Main findings

This research process confirmed that GRC has 69,889 hectares of Oaxacan land concessions, through 30 concession titles. The GRC owns 100% of 25 of the concession titles, and the other 5 they rent from other concessionaires. The concessions are distributed in the following projects: El Rey, El Chamizo, Cerro Colorado, Alta Gracia, Las Margaritas, El Águila and El Fuego.

GRC, on their website, mentions 6 mining projects in Oaxaca: El Águila, Alta Gracia, El Fuego, El Rey, Las Margaritas and El Chamizo. It does not mention Cerro Colorado as a project even though it is listed as such by the Secretaría de Economía SE (Respuesta a solicitud 2014, 2017 y 2018), in relation to the company and former subsidiary, Almaden Minerals.

On the other hand, the SE, by means of application 2014 with file 0001000102914, mentions the same 6 projects of this company: El Águila, Alta Gracia, El Rey, Las Margaritas, El Chamizo, but differs by adding Solaga and omitting Fuego and Cerro Colorado in the information it makes public.

Regarding Solaga, this investigation found that GRC terminated its contract with the concessionaires in 2013. On the same date, this company acquired El Fuego and Cerro Colorado, as stated in the company’s March 13, 2013 press release. Leaving their jobs in the Sierra Norte to focus on their “Oaxaca Mining Unit”.

With respect to El Fuego and Cerro Colorado, as the company GRC points out 5 years ago, it bought these projects from Almaden Minerals, information that is not reflected in the publications of the corresponding instance, since the SE, in the response to the public request of April 2018 for file 0001000026318, points out both as part of Almaden Minerals Company and its subsidiary. In addition, the company only classifies one as an El Fuego project and Cerro Colorado as part of the El Chamizo project. For that reason the company lists only 6 mining projects on its website.

In the SE’s portfolio of mining projects, in the SIAM, these same outdated data follow because to date, the document available online is from 2012.

Detailed information by project

A) The El Rey project is in the exploration stage and consists of 4 mining concessions according to the 2017 GRC report. Cartografía Minera (2018) contains the titles of each concession: El Rey (Title: 225373), El Virrey (Title: 226269), La Reyna (Title: 225401) and El Marquéz (Title: 234213). When making a spatial crossing between the layers it was found that the concessions cover the territory of the municipalities of Santiago Matatlán and San Baltazar Chichicápam. The contradictory data from the SE in the 2018 application response with file 0001000026318 points 1.- to Golden Trump Resources, S.A. de C.V. as a subsidiary and 2.- as a municipality to San Pedro Quiatoni when in reality the concessions do not cover this municipality.

B) The El Chamizo project is in the Exploration stage. In its annual report (2017) GRC points out that this project includes a concession of the same name covering 26,386 hectares. It also notes that, because of the proximity between Alta Gracia and El Chamizo, El Chamizo’s exploration activities began in 2011. The GRC also includes the Cerro Colorado project, purchased from Almaden Minerals LTD, as part of the El Chamizo project. The SE registers Cerro Colorado as a separate project, as we will detail.

In the Cartografía Minera of the SE (2018) was found the concession: “EL CHAMIZO” (Title: 238374). When overlaying the concessions layers with the municipalities it was found that the concession covers territory within the municipalities: San Dionisio Ocotepec, Santiago Matatlán, San Pedro Totolápam, San Lucas Quiaviní and San Baltazar Chichicápam.

The contradictory data from the SE in the 2018 response indicates 1.- The project is as a subsidiary of Golden Trump Resources, S.A. de C.V. and 2.- The municipality of San Pedro Quiatoni is mentioned, though their territory is not affected by the concession.

C) Cerro Colorado Project is in the exploration stage. According to its annual report (2017), GRC purchased this project from Almaden Minerals LTD in 2013, which consists of the San Pedro Fracc. 2 concession, which cover approximately 1,860 hectares. The company has since managed Cerro Colorado as part of the El Chamizo project.

In the Cartografía Minera of the SE (2018) the concession was found: San Pedro Fracción 2 (Title: 233693). When making the spatial crossing with the layers of concessions and municipalities it was found that the concession encompasses territory within the municipalities of San Dionisio Ocotepec and San Pedro Totolápam.

There are four contradictions in the data provided by the SE in the 2018 response 1.- they continued to cite Almaden Minerals Ltd., the current company owner, as the previous company owner 2.- They mention the previous subsidiary Almaden de México, S.A. de C.V., 3.- They mention as country of origin as Canada and 4.- They mention Santa Catarina Lachatao, a municipality that is not affected in their territory because of its location in the Sierra Norte.

D) The Alta Gracia project is in the production stage. This project includes 3 concessions, totalling 5,175 hectares (report 2017). It has been in operation since receiving the necessary permits in 2016. The mine is called El Mirador and all the extracted material is moved 32 kilometers to be processed by the mills of the El Águila project.

The Cartografía Minera of the SE (2018) indicates the titles of the concessions mentioned in the company’s report: David Fraction I” (Title: 232851), David Fraction (Title: 232852) and La Herradura (Title: 231129). When making the spatial crossing it was identified that the concessions include territory within the municipalities of San Dionisio Ocotepec, San Pedro Totolápam and Tlacolula de Matamoros.

There are three contradictions in the data from the SE in the 2018 response, indicating the project 1.- as a subsidiary to Golden Trump Resources, S.A. de C.V., which has already changed, 2.- in the municipality of San Pedro Quiatoni, which for the second time, is indicated without being affected in its territory and 3.- in exploration stage when this project is already in production.

E) The Las Margaritas mining project is in the exploration stage. It consists of the La Tehuana concession, which covers 925 hectares (report 2017). Its website indicates that in 2012 and 2013 different mineral tests were done and in its annual report it reveals that the company has planned a series of exploratory tests.

In the Carteografía Minera (2018) the concession La Tehuana (Title: 210029) was found. A spatial overlay identified that the concession covers territory within the municipality of San Pedro Totolápam.

There are two contradictions in the data from the SE in the 2018 response, which indicate; 1.- to Golden Trump Resources, S.A. de C.V. as a subsidiary and 2.- the affected municipality of San Pedro Quiatoni, again a municipality that is not affected. In reality the concession affects another municipality.

F) The El Águila project is in the Production stage. It consists of 19 mining concessions (report 2017) which total 30,215 hectares. They have worked in two mines: El Águila, in the open air, and Arista, an underground mine in which they are currently working. In their annual report (2015) they listed 17 concessions covering a total of 30,074 hectares.

In the Cartografía Minera (2018) 17 concessions and their corresponding titles were located: El Aguila (Title: 222844), Mina del Aire (Title: 158272), El Chacal (Title: 232628), El Pilón (Title: 232629), El Pitayo Fracción 1 (Title: 231124), El Pitayo Fracción 2 (Title: 231125), El Pitayo Fracción 3 (Title: 231126), El Pitayo Fracción 4 (Title: El Pitayo Fracción 4): 231127), El Talaje (Title: 231128), San Luis (Title: 233124), El Zorrito (Title: 235332), El Coyote (Title: 235802), La Curva (Title: 235803), Zopi (Title: 238875), San Miguel Fracc 1 (Title: 241817), San Miguel Fracc 2 (Title: 241818) and Águila III (Title: 242686).

In the same area, there are two other concessions from the owner Don David Gold Mexico, S.A. de C.V.: Correcaminos (Title: 244389) and Tlacuache (Title: 245147). The areas of these two plus the 17 mentioned above add up to a total of 30,215 hectares, an amount that corresponds to the area indicated by the company in its last annual report (2017).

When making the spatially overlayed, it was identified that territories of the municipalities: San Pedro Quiatoni, San Dionisio Ocotepec, San Carlos Yautepec, Nejapa de Madero, San Pedro Totolápam and Tlacolula de Matamoros would be effected.

Two contradictions in the data from the SE in the 2018 response indicates the project 1.- as a subsidiary of Golden Trump Resources S.A. de C.V. / Hochschild de México S.A. de C.V., and 2.- San Pedro Quiatoni as the only affected municpality even though there are 5 other municipalities affected in their territory.

G) The El Fuego project is in the exploration stage. It was acquired from Almaden Minerals LTD in 2013. Since then it has classified El Fuego as part of its “Oaxaca Mining Unit”. It also mentions that the project consists of the “San Pedro Fracc. 1” concession. It points out that in 2018 it will only do the “minimum work” to maintain the concession and that it has no plans for “extensive exploration work” (report 2017).

In the Cartografía Minera of the SE (2018) the concession “San Pedro Fracción 1” (Title: 233694) was found, covering 2,554 hectares. The spatial overlay identified that the concession covers territory within the municipalities of San Carlos Yautepec and San Pedro Totolápam.

There are contradictions in data from the SE 2018 response, which indicate 1.- Almaden Minerals Ltd. as the company, which maintains the previous company, 2.- the previous subsidiary Almaden de México, S.A. de C.V., 3.- Canada as the company’s country of origin and 4.- San Pedro Totolapan (sic) as the only effected muncipality, although it also includes San Carlos Yautepec. We recall that this and Cerro Colorado were acquired in 2013 by GRC.

In Conclusion

This process of geographic data analysis research leaves us more questions than answers. Each time a new document was obtained it brought with it some more uncertainty, sometimes it answered some questions but opened up others. The inconsistencies found with GRC are not isolated cases. In terms of official information, we ask ourselves, why are the publications of the institutions in charge of providing information to the citizens of this country so out of date? What is the role of institutions dedicated to transparency? What are the legal implications or social motivations of indicating a different municipality from the one that has granted its territory? Who benefits from this disinformation? These are the concerns we share with our readers.

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