Sebastian Perez-Ferreiro
Mining Practice Co-Director
AMI
John Price
Managing Director
AMI
Gold and silver prices have been on a historic tear. Gold has repeatedly hit record highs through 2024 and 2025, topping around US$4,500/oz late in 2025 and continued its ascent into early 2026, with spot prices surpassing US$4,800/oz amid ongoing safe-haven demand and geopolitical uncertainty. Silver has followed a similar, gravity-defying arc, pushing past US$35/oz in 2025 to multi-year highs.
In Latin America — which dominates global silver supply and remains central to gold — rising prices do two things at once. They draw capital toward the ground, accelerating exploration, project development, and dealmaking. And they sharpen the distributional fight over who gets paid as governments, illegal miners, criminal groups, unions, communities and businesses all demand a bigger share.
What follows is not a theory; it is visible in boardroom transactions, fiscal battles, the surge in illegal mining, and the security crisis unfolding along gold corridors from Mexico through the Andes to the Amazon.
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The Boardroom Reflex: Buy Ounces, Extend Mine Life, Fund the Next Deposit
High prices widen margins, lift asset valuations and make reserves more valuable. In Latin America that has translated into a fresh cycle of acquisitions and financing — especially in Mexico, the world’s silver heavyweight, where gold often rides as a by-product.
Mexico: A New Wave of Silver-Gold Dealmaking
- In September 2024, First Majestic agreed to buy Gatos Silver for about US$970 million, consolidating exposure to the Cerro Los Gatos underground mine in Chihuahua, a deal framed in the context of rising silver prices.
- In October 2024, in another high-profile bet on Mexican silver and precious-metals cash flow, Coeur Mining struck a deal to buy SilverCrest Metals and its Las Chispas mine in Sonora.
- In 2025, Pan American Silver moved to acquire MAG Silver, which owns a major stake in Mexico’s Juanicipio mine, one of the world’s more watched silver assets.
These aren’t just portfolio reshuffles but rather the corporate expression of a price cycle: lock in quality ounces while the market rewards them.
Ecuador: Gold-Linked Finance Stays Alive in Higher-Risk Jurisdictions
Ecuador is not Mexico: the geology can be world-class, but the political, security and social-license risks are real. Still, when gold rallies, money finds a way in. In 2024, SolGold secured a major financing package involving Franco-Nevada and Osisko Gold Royalties around its flagship Cascabel copper-gold project, a sign that precious-metals-linked capital remains available when the price narrative is strong enough.
Argentina and Colombia: Bigger Bets on Long-Life Gold
In both Argentina and Colombia, higher prices are reviving appetite for long-life gold assets. Reuters reported in August 2025 that Barrick and Shandong Gold were pursuing a US$400 million expansion of Argentina’s Veladero mine, adding 1.6 million ounces through 2028 under the RIGI incentive regime. In Colombia, B2Gold moved the Gramalote project closer to a construction decision. The pattern is familiar: when prices and expectations rise, patience shortens and deferred capital comes off the shelf.
Put simply, rising prices compress corporate timelines: marginal projects become financeable; good projects become urgent, and operating mines become acquisition targets.
But every additional dollar on the metal price also broadcasts a second signal, one that governments and non-corporate actors receive just as clearly.
When prices rise, bad assumptions get expensive
AMI measures above-ground risk — fiscal, political, security and social — so investors understand what they are really buying before capital is committed.
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The Sovereign Reflex: “You’re Making More, So We’ll Take More”
When prices rise, host states revisit the terms of extraction. Sometimes it’s opportunistic. Sometimes it’s framed as fairness. Often, it’s both.
Mexico is the clearest recent case in Latin America of explicit moves to capture a larger share from mining, including gold and silver.
- In December 2024, Mexico’s Newmont was in talks with the government about a proposed mining royalty hike, with officials and industry explicitly tying the push to the sector benefiting from higher metal prices.
- Mexico’s 2025 budget-related proposals and legislative actions included raising the special mining duty (Fondo Minero) to 8.5% from 7.5% and increasing an extraordinary mining duty on certain precious metals, including gold and silver, to 1.0% from 0.5%.
- Industry warnings were blunt: mining groups argued that higher royalties could deter billions in planned investment, reviving the classic standoff between “resource rent” politics and capital’s threat of exit.
This fiscal reflex matters because it changes the risk calculus for every board considering a Latin American ounce. Even where laws don’t change, the political expectation shifts: when prices soar, governments feel they have public permission to renegotiate the “fair share.” But that’s only the formal state channel.
Informal rush: Higher Prices Make Illegal Mining Scale Faster, Spread Wider
Rising prices also raise the security bill
AMI’s on-the-ground intelligence maps illegal mining, criminal networks and community pressure points before they threaten people, infrastructure and production.
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High prices don’t just draw miners. They draw predators.
Gold is uniquely suited to illegality: dense in value, often near the surface, easy to transport, easy to launder, and globally fungible. When the price rises, illegal mining becomes more profitable per gram, which expands the number of actors willing to take the risk and the violence that often accompanies it.
In several Latin American jurisdictions, the problem has shifted from “illegal mining exists” to “organized crime treats mining districts as revenue platforms.”
Peru: The “Gold Curse” in Real Time
Peru has become a global case study in how a precious-metals boom can collide with weak enforcement and contested territorial control. The country exported US$15.5 billion in gold in 2024, up from US$11 billion the prior year, with around 40% of it likely came from illegal sources, according to Peru’s financial regulator. That illicit economy isn’t abstract — it’s linked to murder, extortion and territorial warfare, especially in northern regions such as Pataz.
In May 2025, 13 workers were found dead at the bottom of a gold mine in Pataz, prompting the government to suspend mining operations for a month. The victims were security guards and their murders were linked to the growth of illegal mining, which has often attached the workers and infrastructure of formal miners.
The Poderosa gold mine has seen illegal miners use dynamite to attack its high-voltage towers supplying energy to the operation. In late 2023, parqueros (criminal gangs preying on the mining sector) killed nine Poderosa workers while trying to steal gold from the company.
Brazil: The Amazonian Pull of Record Prices
Record-high gold prices have intensified pressure on the Amazon basin, accelerating illegal mining and deepening incursions into Indigenous territories. As the value of gold rises, remote reserves that were once marginal become economically viable, drawing informal miners deeper into protected lands and stretching the capacity of environmental and security authorities to respond.
On January 22, police and prosecutors from Brazil, French Guiana, Guyana and Suriname arrested nearly 200 people in their first-ever joint cross-border operation targeting illegal gold mining in the Amazon region.
Venezuela: Illegal Mining Entrenched as Prices Climb
Venezuela’s illegal mining sector is deeply intertwined with armed actors, corruption and territorial governance gaps. Colombian guerrilla groups such as ELN, along with dissidents of the FARC, have established themselves in the Orinoco Mining Arc and the southern states of Bolívar and Amazonas, extracting revenue through direct involvement in the mines, extortion taxes on miners and transport corridors, and alliances with corrupt security forces. The ELN’s control over parts of the illicit gold economy has made them de facto territorial governors in remote mining zones.
Ecuador: Gangs Diversify into Illegal Gold
Ecuador’s criminal landscape has evolved into a multi-market system: drugs, extortion, kidnapping and, increasingly, illegal mining. Mongabay reported on Los Lobos muscling in on illegal gold mining and described extortion imposed on miners. The Global Initiative Against Transnational Organized Crime noted how criminal groups profit from multiple illicit markets including extortion and illegal mining.
Colombia: Armed Groups, Illegal Mining and Protection Rackets
Colombia’s illegal gold economy has long been linked to armed groups and criminal governance in remote areas, including extortion and control of supply chains. The U.S. Congressional Research Service has described how illicit mining, including gold, finances armed actors in Colombia and intersects with territorial control and criminal economies.
The operational reality is stark: mines are fixed assets that cannot be moved when gangs muscle in. And when the price rises, the “take” available to criminals rises as well through stolen concentrate, forced payments, control of transportation routes or “security” fees.
Stakeholder squeeze: Unions, Communities and “Legal Informal” Miners Demand More
Even when a mine is fully legal and well secured, high prices trigger a broader negotiation across stakeholders — the politics of visible profits.
Unions: Profit-sharing and Wage Demands Intensify When Prices Are High
Mexico offers a textbook example. At Newmont’s Peñasquito gold-silver mine, the union called a strike in 2023 seeking to lift the collective bargaining agreement’s profit-sharing benefit to 20% from 10%. The stoppage was eventually resolved, but it underscored a broader dynamic: when metal prices rise, labor pressure on margins intensifies as workers question why their share should lag the cycle.
Communities: Land-access and “Social Cooperation” Become Higher-Stakes Bargaining
In the Mexican state of Guerrero, Equinox Gold’s Los Filos mine offered a clear illustration of community leverage. In April 2025, Equinox announced the indefinite suspension of operations after its land access agreement with the community of Carrizalillo expired.
Civil society and investigative reporting around Los Filos framed the dispute as a conflict over the terms of land use, compensation, and environmental remediation, precisely the kind of negotiation that sharpens when gold prices are high and all sides believe there is more value to divide.
Informal Miners as a Political Stakeholder: Protests for Legal Cover
In Peru, informal miners are not only a workforce category — they are a political force to be reckoned with. Sustained lobbying and street protests have helped persuade lawmakers to extend temporary operating permits for informal miners under the REINFO framework.
Whether REINFO is viewed as a pathway to formalization or as a loophole exploited by illegal operators, the price environment raises the stakes. When gold is expensive, the fight to keep operating — legally or quasi-legally — becomes fiercer.
Why This Boom Cycle Is So Hard to Manage
Piece this together and a defining paradox of Latin America’s precious-metals boom emerges: higher prices can improve project economics, revive exploration, and unlock deals that keep mines operating longer. But those same prices also intensify distributional conflict — pushing governments to raise mining royalties, unions to seek greater profit-sharing, communities to renegotiate compensation, and informal miners to demand legal space.
And, critically, higher prices can supercharge the illegal economy, attracting informal miners and criminal groups that attack the industry’s workers and infrastructure.
For companies, the implication is uncomfortable but clear: rising gold and silver prices are not just a simple tailwind in Latin America. It is a multiplier of opportunity, political scrutiny and security risk.
For governments, the challenge is even sharper: capturing more rent from a boom may be fiscally rational, but if policy uncertainty rises too far, formal investment can slow down, with illegal miners and criminal groups all too eager to fill the vacuum.
And for communities and workers, the boom raises expectations that the local “take” should rise with the global price, especially in regions where investments in mine infrastructure contrast with persistent poverty.
In the end, the gold and silver rally exposes the real structure of power around the orebody. In Latin America today, that power is not confined to corporations and states: it also flows through informal networks, criminal economies and hard-edged politics.
Enhanced Due Diligence Reduces Investor Risk and Lowers Asset Purchase Prices
AMI conducts on-the-ground enhanced due diligence to help companies avoid costly risks, mitigate manageable risks and lower the sales price of mining assets by uncovering the true nature and scale of above-ground risks associated with assets.
Before committing capital to acquisitions or exploration, investors need clear visibility on the risks their capex may face — including those a seller may not fully understand or choose to disclose. AMI’s enhanced due-diligence framework assesses up to seven categories of above-ground risk.
Contact us to learn how AMI can help reduce the risks and costs of your next mining asset acquisition or exploration project.
Managing Mining Risk in Latin America
This whitepaper identifies seven critical above-ground risks facing mining projects in Latin America — and explains how leading operators and investors manage them using real-world case studies.
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