This article was originally published on Gold Investing News on August 31, 2014.
When it comes to mining, Mexico has long been associated predominantly with silver. However, gold has been mined in Mexico for at least 500 years, and the country has a history of both commercial and artisanal production.
Despite that very long history of precious metals production, there are still untouched deposits in Mexico, many of which have become accessible due to recent improvements in mining technology. Gold exploration and development activity in the state of Zacatecas has increased recently for precisely that reason.
Mexico’s political climate is friendly to mining activity, and there is a ready supply of workers of various skill levels. Costs also tend to be favorable in comparison to other North American countries. All of those factors make Mexico a natural choice for resource exploration companies.
Here are four such companies working in the country on gold exploration, development and production:
GoGold Resources (TSX:GGD)
GoGold Resources has several gold and silver properties in Mexico. Its Parral tailings project has 35 million ounces of silver equivalent, and the first bar has been poured. Commercial production is expected to begin in the fourth quarter of this year. The Parral Tailings project is in Hidalgo del Parral, Chihuahua, Mexico.
Its Santa Gertrudis mine, which has produced gold in the past, is in Hermosillo, Sonora, Mexico. The company acquired Santa Gertrudis in April 2014 as part of its purchase of Animas Resources. Originally, the mine at Santa Gertrudis operated between 1991 and 2000, and produced 564,000 ounces of gold at an average grade of 2.13 grams per ton. It was closed as gold prices dropped. Remaining resources were until recently estimated at 557,000 ounces of gold. On July 31, however, the company announced it had drilled 21 meters of 2.22 grams per ton told in new zones at the site. This adds significant new resources adjacent to where it is already known there is available gold. GoGold continues to explore and expects the resources known at Santa Gertrudis to continue to increase.
Sierra Metals (TSX:SMT)
Sierra Metals is one of the largest mineral property holders in Mexico. The company focuses on base and precious metals alike, with several projects in various stages of exploration and development. It has a large land package of exploration properties in the Cusi silver mining district, with its property in that area totaling over 230,000 hectares.
Sierra’s Maguarichic property is unique in that it is an epithermal hot spring property prospective for gold. In November 2010, Fresnillo and Sierra reached an agreement where Fresnillo gave up its 30 percent interest in the project in exchange for other land. Work at this site is currently on hold while Sierra concentrates on other projects that are closer to production.
Other gold exploration properties include the Arechuyvo property, a skarn-hosted copper-gold site, and the Batopilas property’s La Verde prospect, a sulphidation gold area.
The property closest to production that is prospective for gold is the Moris property, which Sierra is currently preparing for small-scale production. The area is a low-sulphidation epithermal gold and silver prospect that has been mined historically.
Argonaut Gold (TSX:AR)
Argonaut Gold recently announced its second quarter revenue in 2014 was $40.9 million, with a net income of $2 million and $13.5 million in cash flow from operations. This success is largely in part on portfolio of projects the company currently holds.
Argonaut’s projects in Mexico include El Castillo, an open-pit producing gold mine in the state of Durango, Mexico. The mine has been operating since 2007, with commercial production beginning in 2008. Production has risen consistently since that time, partially due to infrastructure investments from Argonaut when it acquired the property. Resources at El Castillo total more than 3 million ounces of gold. The project should produce up to 100,000 ounces of gold this year.
The company’s other producing project is the La Colorada gold mine in Hermosillo, Sonora, Mexico. In 2014, the company expects production to total between 45,000 and 50,000 ounces of gold.
The San Antonio gold project in California Baja Sur, Mexico, is also in exploration. It is located in a historic mining district and has measured and indicated resources of 1.7 million ounces of gold.
Timmins Gold (TSX:TMM)
Timmins Gold is another company with gold mines in commercial production in Mexico. Its San Francisco mine, in Sonora, Mexico, has two open-pit mining sites, of which one is currently in production. In 2012, this pit produced 94,444 ounces of gold. The project is largely a gold and silver occurrence with trace amounts of other metals.
Timmins Gold also owns the mineral rights for other claims in northern Sonora. Many of these claims at one time hosted artisanal gold mining activity, Timmins discovered. Active exploration and development is in progress for two of these projects, while the rest are currently on standby.
The company is also exploring property in Zacatecas, Mexico, which has recently become one of the most active mining exploration areas in Latin America.
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