FiNETIK – Asia and Latin America – Market News Network

Mexico is moving rapidly to become a gold producer power by boosting its production during the last decade, reported Stockhouse, a Canadian financial advisory firm.

Since 1998, the Mexican production Gold doubled last year, reaching a total of 45,075 kilograms, a figure that no other producer of this metal had shown.

Last year, world production of gold showed a deficit of almost 20% equivalent to 567,000 kilograms, which clearly demonstrates that, the trio of gold producers South Africa, USA and Australia are losing their luster.

The firm notes that among all nations, only Mexico gold production continue to experience an impressive growth. Production estimates predict that 2009 will be an exceptional year with another significant increase in the production of up to 54% compared to 2008 figures.

Gold in 2008 represented 16% of the total value of the country”s mining-metallurgical, breaking the one of silver which represented 15%.

This boom is due to the opening of foreign investment laws, a modern mining law, and NAFTA. These changes allow now that more than 250 foreign companies, mostly Canadian, are in Mexico working on at least 600 projects.

The Canadian company Agnico Eagle Mines opened this month a mine with a processing capacity of 4,000 tons per day of gold and silver, in which the company invested $240 million dollars.

The mine site, called Pinos Altos”, is located in the municipality of Ocampo in the northern state of Chihuahua, and is one of the most important and modern mining operations of the country.

The mine, which will be have underground and surface operations will generate about 500 direct jobs and 1, 500 indirect and has reserves of 41.8 million tons of gold and silver content.

Another project that is already succeeding is the Palmarejo, of the Canadian company Coeur d”Alene in the state of Chihuahua, which since March of this year invested $225 million dollars and generated 500 direct jobs for the production of 9 million ounces of silver and 110,000 ounces of gold.

Major domestic and foreign mining companies investing in Mexico in gold production include Grupo Mexico, Fresnillo Plc, Gold Corp Mexico, Empresas Frisco, Gammon Gold, Alamos Gold, and Silver Panamerican.

This increase in production coincided with the rise in prices gold in the last decade, a fact which helped for the first time last year the value of gold production in Mexico exceeded that of silver.

According to the Mining Chamber of Mexico (Canimex), last year gold accounted for 16% of the total value of mining and metallurgical of the country, surpassing that of silver, which represented a 15%. It also notes that the projected gold production in Mexico will grow in coming years and could place the country among the top 5 global producers of precious metal.

Stockhouse recognizes that growth of production in Mexico is enormous, since only 15% of the territory is geologically fertile.

Currently 71% of gold production at the national level is concentrated in only three states: Sonora 29% Chihuahua 26%, Durango 16%.

Source:E-mid, 26.11.2009