Can Governments Resist Plucking Mining's Golden Goose?
How governments are pricing in +$4,000 gold faster than miners can model it, with Mexico as the cautionary tale and Morocco as the counter-example.
There is a meme-stock version of the gold bull market, and there is a mining-executive version of the gold bull market, and the gap between the two appears to be widening. The meme analyst version is exuberant about spot prices, margin expansion, and free cash flow yield. The executive version, at least as it was laid out over three days in Zürich, is that a project’s host government is usually the highest-conviction bull in the room, and it is not waiting for the next all-in-sustaining-cost update to express that view.
Royalties, production taxes, windfall levies, and “wealth sharing” arrangements are moving faster than the offtake models on most sell-side desks, and with +$4,000/oz gold, the arithmetic has stopped being marginal. When a fiscal regime changes from 3 percent to 5 percent, or from a flat production royalty to a sliding scale indexed to the metal price, the NPV of a long-life asset can move far more than a decent intercept report from a drill bit. That was the subtext of a surprising number of presentations this year, and if you listened for it across the full sixty-plus-company slate, it definitely coalesced into a theme worth investor attention.
You could reasonably call it a royalty ratchet, and the cleanest way to see it is to line up three producers, two continents apart, and read off the numbers they put on their own slides.
The math on one slide: IAMGOLD at Essakan
IAMGOLD [$11.21B, $19.25, USD] is a useful anchor because Maarten Theunissen, the CFO, walked through the royalty math on his own cost waterfall and did not try to hide it. The Canadian cash cow is Coté in Ontario; the growth project is Nelligan in Québec; but the free cash flow engine right now is Essakan in Burkina Faso, and Essakan’s cost structure includes a line item that did not exist in any meaningful form a decade ago.
“[Essakan’s] cost structure also includes a royalty that’s $400 an ounce. So if you look at the cost structure, although it is on the higher end of the scale, it does include that royalty.” — Maarten Theunissen, CFO, IAMGOLD
At $400 an ounce, it ceases to be a straightforward tax rate. For context, Theunissen noted in the same deck that Coté in Ontario also carries an embedded royalty, roughly $300 per ounce, which shows the Burkina regime is already 30-plus percent richer per ounce than the Ontario one, on a mine with approximately the same production size and higher overall risks.
Nevertheless, the reason that math works for IAMGOLD at all is that its cash leaves the country cleanly. By mid-February 2026, the company had already repatriated $170 million from Burkina to Canada for the year, and the share buyback program is being funded almost one-for-one out of that repatriated Burkina cash. Through the end of March, the company had purchased $260 million of shares since January. That is as clear a demonstration as you will get that a producer’s sovereign exposure is not necessarily a binary risk flag, but a working capital decision. It also means the company has built its entire 2026 capital return program on the assumption that the $400-per-ounce royalty does not move again.
Papua New Guinea’s “first of three” installment
The K92 Mining [$4.86B, $20.18 CAD] presentation contained one of the most quietly extraordinary sentences of the week. John Lewins, the CEO, was walking through the Kainantu operation in PNG, with seven million ounces of resources at nine grams per ton, stage three expansion commissioned on time, when he paused to address the government relationship.
“Earlier this year, in fact, just a couple of weeks back, we paid our first tax installment for 2026 to the government, which was 287 million kina… around about $70 million of US dollars, and that was our first of three installments for the year.” — John Lewins, CEO, K92 Mining
That’s $210 million of corporate tax for a single calendar year from a mine that is still ramping toward 300,000 ounces, from a company whose market capitalization is under $5 billion. Lewins also disclosed that across 2024 and 2025 combined, K92 had already paid “in excess of $100 million US dollars in corporate tax to the government” while spending $350 million on capex. The PNG prime minister, Lewins noted, personally issued a press release thanking the company for the size of the installment. He described the exchange this way:
“Which went some way to overcoming the sadness of giving away $70 million.” — Lewins
That line got a laugh in the room, but it is the most important number in the PNG investment case. A stage-three producer in a jurisdiction where one in every two dollars of gold exploration spending comes from a single company is no longer a low-tax story. It is a very-high-absolute-dollar tax story in which the take is tied directly to the gold price, and the ratcheting mechanism is not a new mining code, it is simply that at $4,000 gold, the pre-existing code prints a bigger number for the treasury.
“Out of control”: the West Africa diagnosis
If IAMGOLD and K92 give you the specific numbers, Aya Gold & Silver [$2.6B, $18.16 CAD] gave the clearest articulation of the pattern. Aya is a Moroccan story, but President and CEO Benoit La Salle started by telling the audience where he had come from, and the framing was the most direct piece of sovereign-risk commentary on the forum floor.
“I’ve lived through 1990, 2000, when gold went up and up and up and up. We were in Burkina, Guinea, Mali, you name it. We were everywhere, and you know what happened? Everywhere taxes went up, royalties went up, indirect costs went up, and demands went up. It was out of control. Right now, if you look at West Africa, it’s out of control. Its royalties are up to 12 percent, so jurisdiction in a fast-moving commodity price has got to be your number one criterion for looking at a project.” — Aya Gold & Silver presentation
“Jurisdiction in a fast-moving commodity price has got to be your number one criterion” is not a throwaway line from someone who has never operated in Africa. La Salle’s career was built on building mines in Burkina Faso, and he is explicitly telling an investment audience that what broke the last cycle for West African producers was not the gold price; it was the fiscal regime catching up to the gold price. Twelve percent royalties are three times what most Western majors build into a life-of-mine model, and the quiet implication is that the number may not be done moving.
Aya is making the bull case for a specific jurisdiction by making the bear case for an entire continent.
The real-time exhibit for La Salle's diagnosis landed while the Forum was still in progress. West African Resources, an ASX-listed producer that was not on the Mining Forum Europe roster but is a member of the Denver Gold Group operating next door to Aya's former stomping grounds, confirmed that the Burkina Faso government has moved to take a 40 percent stake in its flagship Kiaka gold mine, up from the 15 percent free-carried interest already embedded in the existing mining convention. A producer already running at the current West African fiscal terms is being asked, mid-ramp, to hand over another quarter of the equity. The ratchet is not a modeling abstraction, but reality, and is the kind of single-line event that can move an asset's NPV by more than any reasonable range of drill results.
Mexico: a cautionary tale
The most expensive lesson in how quickly the political/social license line can move is still being learned in real time at Los Filos, and Equinox Gold [$12.32B, $15.63 CAD] entered the Zürich session with its fireside chat essentially organized around it. Ryan King, EVP Capital Markets, was asked how Los Filos fits into the growth pipeline; his answer:
“Los Filos is currently on suspended operations. We’ve had it suspended for about 15 months now. What we’re doing is we’re working through land access agreements. We have land access agreements with two Ejido communities. We’re working on the third community.” — Ryan King, EVP Capital Markets, Equinox Gold
Los Filos is the fourth-largest gold deposit in the Americas with over sixteen million ounces across all categories. The original technical study was designed around $1,300 gold; the asset has been stranded without production for fifteen months at a gold price more than three times higher. The bottleneck is not permits in the conventional sense, and it is not the mineral reserves and resources. It is a community-by-community land access negotiation that effectively constitutes a parallel fiscal regime, priced by the Ejido rather than by a ministry, and the number on which an updated technical report lands will depend on how each of those negotiations breaks.
A few slots later in the schedule, Agnico Eagle [$110.27B, $220.10 USD] was asked to describe its own Mexico strategy. Dominic Girard, EVP Nunavut and Europe, answered without defensiveness:
“Mexico, we, we have one mine still in operation, Pinos Altos. There’s 2-3 years in front of us. The team is looking with the current gold price, could we expand it because again we have the thing built and we have the team. We’ll see if there’s something. But the thinking is, is to use the workforce and the knowledge, to help and to develop, Saint Nicolas.” — Dominic Girard, EVP Nunavut and Europe, Agnico Eagle
Pinos Altos winding down to a two-to-three-year tail while the same workforce pivots to Saint Nicolas (a Mexican zinc development project still in permitting) is not a rejection of the country, but it is not an endorsement either. The more telling line in the Agnico presentation was structural rather than country-specific: Girard said Agnico’s two gating criteria for any new region are geological potential and “political and social stability,” and drove the point home with this:
“Even though we could build many mines in Africa, we won’t, in Africa, we won’t go there.” — Girard
A firm with 85 percent of its production in Canada, making explicit that it will not chase grade into West Africa at almost $4,000 gold, is a critical data point. It is also a re-rating mechanism: the premium that accrues to Agnico’s Canadian ounces is being paid for by the discount that accrues to someone else’s Africa ounces, and the wider the royalty ratchet goes, the wider that spread gets.
Guatemala: the stranded twenty-million-ounce asset
Pan American Silver [$24.89B, $59.06 USD] has an even starker version of the same problem. Escobal in Guatemala produced 21 million ounces of silver when it was last operating and has been suspended for years, awaiting a government-led indigenous consultation process. Michael Steinmann, the CEO, has been asked about it at every forum I can remember, and his 2026 answer was the most forward I have heard him give:
“We are obviously very open to discuss any kind of participation on that project. Together with the indigenous group and the government… The mine is ready to go. We would need about $80 to $100 million working capital to start it up, about 6 months to bring it back into production.” — Michael Steinmann, CEO, Pan American Silver
The asset is fully built, could be in production in six months, and the capital requirement to restart is a rounding error against a company with over $2 billion of liquidity. The only missing piece is the fiscal and equity-sharing structure that gets agreed between the indigenous group and the Guatemalan government. When Steinmann uses the phrase “sharing wealth from that project” alongside “the government of Guatemala,” he signals that whatever emerges is unlikely to be a conventional royalty.
The useful question is not whether that deal eventually gets done. It probably does, because at these metal prices, everyone on every side of the negotiation gets paid enough to sign. The useful question is what cost structure the restarted mine carries when it does.
Morocco: the counter-example, in three numbers
Every story like this needs a control case, and Aya Gold & Silver is the single clearest example at the forum. The Morocco pitch, given the backdrop of the West Africa commentary above, was almost aggressively straightforward.
“They just came up with their new mining code. You’ll love that. Royalty 0. Free carried interest, 0. Taxation 32 percent. Permitting takes 2 weeks to 3 months on a PA. Once you’re permitted, you’re permitted for life. So you can’t beat that.” — Aya Gold & Silver presentation, President & CEO Benoit La Salle.
Zero royalty. Zero state free-carry. Thirty-two percent corporate tax. Permit turnaround is measured in weeks. That is the fiscal regime most West African countries had in 1995, and the comparison is not accidental; La Salle named Burkina Faso, Guinea, and Mali explicitly and said the Moroccan regime today is what those regimes were at the start of the last bull market. The counter-example goes further. For very large projects, he said, the corporate tax rate is negotiated below 32 percent: “That size of a project will have its own tax agreement, and we’re not gonna be at the 32 percent tax rate.” Aya is building the Boumadine project (a 37-million-ounce-silver-equivalent-a-year asset) for $446 million of capex, roughly one-third of what the same mine would cost in North America, and the government has offered, unprompted, to build the railway and power line to connect the mine to the port because the concentrate tonnage justifies it.
None of this is a prediction that Morocco will stay this way forever; the whole point of the observations is that fiscal regimes seem to be mean-reverting, and mean-reversion runs in one direction during bull markets. But for now, Morocco is the best-defined counterexample in the gold-silver space, and the spread between the Morocco fiscal curve and the Burkina Faso fiscal curve should arguably be the single largest input into the relative value of Aya versus any of the West African mid-cap producers. The market does not yet appear to discount it that way.
Lines to watch
If the fiscal regime ratchet really is a cycle feature rather than a headline, there are three specific places where the next leg of it will show up first, and I came out of the forum with a watchlist:
1. Price-indexed royalties
The IAMGOLD Essakan number is not primarily the result of a rule change, it is a sliding scale doing what sliding scales do at +$4,000 gold. Watch for other jurisdictions to migrate from flat NSR regimes to explicitly price-indexed scales, and for existing indexed scales to get their upper brackets rewritten the next time a mining code is reopened. Burkina Faso, Guinea, and Mali already have these structures; West Africa as a whole is where the 12 percent top-bracket figure comes from.
2. Wealth-sharing arrangements
Guatemala’s Escobal consultation is the sharpest example, but the pattern is visible in Equinox’s Ejido-by-Ejido land-access work at Los Filos and in the quieter provincial-participation discussions that arose in multiple presentations. These arrangements sit outside the formal fiscal code but function economically as one, and because they are negotiated project-by-project, they are the hardest line items for sell-side models to standardize. Expect pressure to raise the number each time a restart is requested.
3. Permitting speed as a de facto royalty
Paramount Gold Nevada [$150.03M, $1.79 USD] is a useful illustration of the time-as-tax version of this. Rachel Goldman, the CEO, put it this way at Grassy Mountain in Oregon:
“Oregon has never rejected a mine before. They’ve simply never had a project which tested their permitting regime.” — Rachel Goldman, CEO, Paramount Gold Nevada
A jurisdiction that does not say no but also does not say yes collects an implicit royalty in the form of time, and at these cost-of-capital levels the NPV drag is real. Morocco’s weeks-to-months permit turnaround is the flip side of the same coin. Watch which jurisdictions are structurally willing to move quickly. That list is shorter than it was two cycles ago.
Where this leaves investors
None of the above amounts to a forecast. Fiscal regimes move bespoke by jurisdiction, and the single word that most reliably predicts the next move is “election” or “coup” or “invasion”. What the Mining Forum Europe floor did offer, though, is a useful reframing: treat the fiscal regime line of a mine model the way one ought to treat the gold price itself: as a live variable, not a country flag in the footer.
For sell-side models, the implication is narrow and concrete. A West African producer run at a flat NSR, a PNG producer at a blended effective tax rate, or a Mexican asset at the terms embedded in a 2022 feasibility study is being modeled on inputs that were accurate once and have a non-trivial probability of being wrong now. At gold prices that trade with a 4-handle and occasionally flirt with a 5-handle, that probability compounds quickly.
For equity investors, the implication is broader. The trading premium the Canadian intermediates have accumulated over the last two years, the one that anchors the ASX-TSX valuation gap of $22,000-versus-$12,000-per-production-ounce headline, is arguably the market’s best first-order attempt at pricing this in. It is not, strictly speaking, a Canada-versus-rest trade, even though that is how it looks on the surface. It is a fiscal-resilience trade. The producers whose host governments cannot re-price them faster than the commodity is re-pricing itself are the ones carrying the premium. The producers whose host governments can are the ones carrying the discount. That spread is unlikely to narrow in a bull market because it is the bull market.
Sources: company presentations and associated Q&A from Mining Forum Europe 2026. Company links point to presentation recordings. Market capitalization and share price figures in square brackets reflect the April 17, 2026, close in the currency of primary listing (USD unless otherwise noted). Numbers cited in the body reflect what management stated on stage and on panels; please do your own work before sizing a position. It’s a large volume of presentations in a short time frame — mistakes can be made!
