Primero Mining shares soar on Mexican tax ruling

TORONTO Fri Oct 5, 2012 9:47am EDT

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TORONTO (Reuters) - Shares of Primero Mining Corp (P.TO) rose more than 41 percent shortly after the market open on Friday after the junior gold miner said it had received a positive ruling from Mexican tax authorities on how it reports silver revenues.

The ruling confirms that Primero can record silver revenue and taxes from its San Dimas gold mine in Durango state at the realized silver price rather than the spot price.

It is an important distinction, as Primero has a stream deal whereby it sells silver by-product produced at the mine to Silver Wheaton Corp (SLW.TO) for just over $4 per ounce. That is well below the current spot price of $34.89 per ounce.

Shares of the Toronto-based miner rose 41.7 percent $7.51 on Friday morning on the Toronto Stock Exchange.

(Reporting by Julie Gordon; Editing by Peter Galloway)

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