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With the Olympic Games in London just a couple of months away, all competing nations will soon be focusing on gold – winning as much of it as they can. Until then, one unexpected Latin nation is focusing on gold too, but much closer to home.
Matthew Piggot, a mining analyst with Thomson Reuters GFMS, is projecting that Mexico – which only this past year made Bloomberg’s Top 10 list of gold producing countries— may be the next source of “mega” gold deposits.
Accounting for this are expected yields at two projects owned by Canadian companies based in Vancouver: the Ana Paula mine owned by Newstrike Capital Inc., in the Guerrero gold belt; and the Charay gold property in western Mexico owned by Westridge Resources Inc.
The Ana Paula project has the potential to yield more than three-million ounces of gold, with significant upside as exploratory drilling is only about halfway complete, according to Mining Weekly.
Located about four hours from Mexico City, the Guerrero gold belt is a newly established gold district, also hosting Goldcorp’s Los Filos complex – the largest gold mine in Mexico with proven and probable resources of 7.7-million ounces – and Torex Gold Resources’ Morelos project.
The same report quotes Westridge CEO Peter Schulhof as saying that when his company acquired the Charay gold property, the Padre-gold vein was thought to be only about 250 m in length. Subsequent drilling had expanded the gold/silver resource to multiple veins over a 4 km area, with gold grades of between 2 g/t and 20 g/t.
Westridge has, to date, explored about 1% of the 105 km2 tenement, with Schulhof unofficially expecting the resource to hold about five- to six-million ounces of gold.
And, according to Piggot, this may just be the tip of the proverbial iceberg.
“With a number of projects ramping up to full production and many more projects being evaluated, we expect production to increase to about 100 t over the next five years,” he was quoted as saying.
Mexico is already the world’s main silver producer and if analysts are right, the country will become a key player in the gold market in the next five years.
In addition to its gold deposits, Mexico is a very attractive mining destination because it is one of the lowest-cost mining jurisdictions in the world. For example, in Mexico it costs an average of $325 to produce an ounce of gold, whereas in the rest of the world, the average is $649 per ounce.
(Image: Mexican fifty centavos gold coin)
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With the contribution of Suzanne Soto, owner of Si! Corporate Communications, a Greater Toronto Area company providing public relations services in both English and Spanish.
7 Comments
Jasper
Another great article Suzanne! I agree Mexico has serious issues with the drug related gang violence but at least an increase in mining jobs will provide a safer alternative to earn a livelihood for many. Btw, Mexico is not the only place where drug related violence is a common occurrence, think BC.
Ed233
My argument is that this article fails to provide substance and suggests that Mexico could become the next gold superpower. I can safely conjecture that this country will not in my time be noted as a top producer of gold by a long shot. They are not noted for gold but rather silver, gold for the most part is a by product. Secondly, they have a serious problem with security as it relates to operating mines. The lack of security has affected mining explorers and in particular at least one mining company mentioned in this article has suffered adversity. Low cost labor is not the only factor affecting these mines in their effort to become successful. This article lacks meaningful information without considering the counter arguments. The introductory statement is backed by no substance. Sorry! LOL
MINING.com Editors
With all due respect and acknowledging your important points, I think that there is really nothing humorous in this article nor in the situation. So, in my opinion, your LOL is quite out of place.
http://en.wikipedia.org/wiki/LOL
Dav2012
Don’t kid yourself my friend, “DRUGS” are still Mexico’s bigest and most profitable comidity. Iust ask “Wane Valdeze’s ” donkey. That is not coffie in those sattlebags My friend!Like the mining industry in Mexico the drug cartells have very few saftey laws that they inforce. Good luck Mexico………….
Román Robledo
As long as Mexico has the largest drug market on the planet as its neighbour, it will need more than good luck. USA does have a health problem that don´t want to acknowledge, but in very short time will take a serious toll on american society.
MINING.com Editors
Safety is undoubtedly an issue in Mexico. Just for Canada, the stats are significant: according to the Department of Foreign Affairs, 32 Canadians tourist were homicide victims in Mexico between 2000 and 2011. So far this year, three Canadians have been killed.
Despite the numbers, Mexico’s Tourism Board estimates1.6 million Canadians visited the country in 2011, making it the second most popular destination for Canadians after the United States.
In northern Mexico and all cities bordering the United States, organized crime and urban violence affect security. There has been a substantial rise in armed confrontations between organized criminal groups and between these criminal groups and Mexican authorities. This has led to an increase in illegal roadblocks, robberies, kidnappings and carjackings in the larger northern cities.
In some parts of the country, military and federal police forces have been deployed in efforts to combat organized crime and improve security conditions. They maintain a visible presence patrolling the streets, setting up roadblocks, and conducting random vehicle checks.
So far, it seems mining companies are the sole responsible for ensuring workers safety.
Ed233
This article certainly paints a good picture for the country of Mexico as a mining district containing a lot of potential. And as this article points out it is a low cost environment unlike many other foreign jurisdictions. But this article fails to point out certain down sides that have to be considered especially for the investor. The main issue in my opinion is the security of the persons working in this area. Gang warfare is completely out of control in this country. Many miners have had problems including at least one of the companies mentioned in this article. I like to read articles that present both sides of the picture not just the upside. A little more research would have revealed in more depth some of the real issues facing these miners in Mexico, issues if not addressed properly could easily derail promising developments. LOL