The Company is formally initiating studies to re-evaluate the Reforma, Naranjo, El Largo and El Rey deposits to assess the feasibility of building a second mine with a target [...]]]>

Based upon the rapid rise in gold prices, Farallon Mining said it is planning a second mine at its Campo Morado property in Guerrero Sate in Mexico

The Company is formally initiating studies to re-evaluate the Reforma, Naranjo, El Largo and El Rey deposits to assess the feasibility of building a second mine with a target start date of July 1, 2013.

Indicated resources for the Reforma, El Rey, Naranjo and El Largo deposits total 11.2 million tonnes of 4.7% zinc, 0.7% copper, 1.4% lead, 165 grams per tonne of silver and 2.7 grams per tonne of gold.. Contained gold totals 960,000 ounces and contained silver totals 60 million ounces.

The Company already operates a zinc mine, G-9 zinc mine at Campo Morado.  The second mine would piggy back on infrastructure already in place  at the current G-9 mine operation.

Located in the northern Guerrero Gold Belt to the west of and adjacent to Newstrike Capital Inc.’s Aurea Norte Project in Guerrero State, Mexico, the G-9 mine is a 1,500 tonnes per day, underground, zinc mine with important by-product credits of copper, gold, silver, and lead.

Source: Farallon Resources

The total purchase consideration of $500 million, consisted of $275 million in cash, $175 million of Mala Noche common shares valued at the offering price of Mala Noche’s proposed equity financing and a [...]]]>

Goldcorp Inc. recently announced that it had entered agreement to sell the San Dimas gold-silver mine in Mexico to Mala Noche Resources Corp.

The total purchase consideration of $500 million, consisted of $275 million in cash, $175 million of Mala Noche common shares valued at the offering price of Mala Noche’s proposed equity financing and a $50 million promissory note payable over five years which will bear interest at a rate of 6% per annum.  Goldcorp’s ownership interest in Mala Noche is expected to be approximately 30%.

This transaction follows on the heels of Goldcorp’s sale of the Escobal silver deposit in Guatemala to Tahoe Resources Inc., and the sale of its minority interest in Morelos Project to Torex Gold Resources (formerly Gleichen Resources Ltd.).

These transactions are consistent with Goldcorp’s ongoing strategy of creating value for shareholders by divesting smaller or noncore assets to focus on cornerstone operations that will continue to drive Goldcorp’s industry leading production growth and future cash flow

Recently Goldcorp and Newstrike Capital Inc. entered into a definitive agreement for Newstrike to acquire 100% of the “Ana Paula Project” from, a wholly-owned subsidiary of Goldcorp.

Ana Paula is an advanced exploration stage gold project, located in the north-central part of the State of Guerrero in southern Mexico. The Ana Paula Project consists of two contiguous and two discrete concessions covering 7,622 hectares that collectively comprise internal claims to Newstrike’s existing land position. Newstrike’s entire land position in the Guerrero Gold Belt (“GGB”) now covers just over 88,952 contiguous hectares.

As with the Mala Noche/San Dimas transaction, consideration for the Ana Paula transaction includes Goldcorp receiving shares of Newstrike.

In December 2009, Newstrike and Goldcorp announced they has entered into an agreement for Newstrike to acquire Goldcorp’s 21.2% position in the Morelos Project subject to a right of first refusal held by Gleichen Resources Ltd.; which Gleichen subsequently exercised.

Why else would Mexican President Felipe Calderon attend Goldcorp’s (GG) recent opening ceremony for a new mine in Penasquito?

The president lauded Goldcorp for its $1.7 billion investment and for creating thousands of jobs. Once fully operational, the mine in the north-central region will be [...]]]>

Canadian-based mining company Goldcorp is playing well south of the U.S. border.

Why else would Mexican President Felipe Calderon attend Goldcorp’s (GG) recent opening ceremony for a new mine in Penasquito?

The president lauded Goldcorp for its $1.7 billion investment and for creating thousands of jobs. Once fully operational, the mine in the north-central region will be Mexico’s largest. What’s good for Mexico is good for Goldcorp.

The Penasquito mine is expected to produce about 1 million gold equivalent ounces per year for Goldcorp. Commercial production is set to start in the third quarter and fully ramp up by early 2011 to 130,000 tons per day.

While gold prices hover near a record-high $1,200 an ounce, some gold analysts predict prices will go even higher. They reason that investors will continue to turn to gold as a hedge against the falling euro and other global economic woes.

Biggest Mine
Penasquito’s production would put the mine on par with Goldcorp’s biggest gold mining asset, known as Red Lake, which is in northwestern Ontario. And that’s taking into account Red Lake’s expansion over the next couple of years. “It’s of huge importance to Mexico and the company,” said Scotia Capital analyst David Christie.

By market capitalization, Goldcorp is the second largest mining company in North America after Barrick Gold (ABX). Productionwise, it’s third after Barrick and Newmont Mining (NEM), both also based in Canada, a country with a long history of gold mining.

Goldcorp tends to trade at a premium to its large-cap peers due to its growth profile, analysts say. It expects to produce 2.6 million ounces of gold this year at a cost of $350 an ounce, up from 2.4 million ounces in 2009 at a cost of $295 an ounce.  Its five-year forecast calls for a 50% increase due in large part to new production at Penasquito, where costs are viewed as relatively low.

Other new projects are lined up, too, such as Pueblo Viejo in the Dominican Republic, which is expected to start gold production in 2011. Management says the Dominican mine will produce more than 400,000 ounces of gold a year in the first five years.

“Goldcorp has excellent assets, and they’re very long-lived assets,” said analyst Adam Graf of Dahlman Rose & Co. “They are high margin and leveraged to the underlying commodity, which is gold.” The higher the price of gold, the better for gold producers, especially if production costs remain relatively low.

Newstrike Capital Inc. has entered into a definitive agreement  to acquire 100% of the “Ana Paula Project” from a wholly-owned subsidiary company of Goldcorp.

Ana Paula is an advanced exploration stage gold project, located in the north-central part of the State of Guerrero in southern Mexico. The Ana Paula Project consists of two contiguous and two discrete concessions covering 7,622 hectares that collectively comprise internal claims to Newstrike’s existing land position. Newstrike’s entire land position in the Guerrero Gold Belt now covers just over 88,952 contiguous hectares.

Source: INVESTOR’S BUSINESS DAILY

Ana Paula is [...]]]>

Newstrike Capital Inc. (TSX VENTURE:NES) (“Newstrike” or the “Company”) – www.newstrikecapital.com – is pleased to announce it has entered into a definitive agreement dated May 11, 2010 to acquire 100% of the “Ana Paula Project” from Desarrollos Mineros San Luis, S.A. de C.V. (“DMSL”), a wholly-owned subsidiary company of Goldcorp Inc. (TSX:G, NYSE:GG).

Ana Paula is an advanced exploration stage gold project, located in the north-central part of the State of Guerrero in southern Mexico. The Ana Paula Project consists of two contiguous and two discrete concessions covering 7,622 hectares that collectively comprise internal claims to Newstrike’s existing land position. Newstrike’s entire land position in the Guerrero Gold Belt (“GGB”) now covers just over 88,952 contiguous hectares.

Beginning in 2004, Goldcorp conducted exploration programs on Ana Paula including geophysics, mapping and geochemistry, resulting in the discovery of a 1.0 kilometre by 2.0 kilometre wide area of gold mineralization at surface. A portion of this large mineralized area was drill tested in 2005 with a 3,689 meter, 11-hole diamond drill program that has confirmed the gold mineralization potential of the area.

Richard Whittall, President & CEO of Newstrike, commented: “Newstrike is pleased and excited by the acquisition of the Ana Paula Project, an advanced exploration project that we look forward to developing through aggressive exploration and drilling. Our management team has a long history formulating and developing the original GGB concept. Today, it is gratifying to see published NI43-101 compliant inventories of over 15 million ounces of gold in all categories, including from Goldcorp’s Los Filos gold mine and the El Limon deposit currently under development by Torex Gold Resources Inc. The GGB is now a firmly established gold camp where new discoveries are being actively pursued by Newstrike, Goldcorp, Torex and La Camera Mining Inc. Newstrike continues to hold a dominant strategic land position within the GGB that we will continue to advance towards discovery.”

As consideration for the acquisition of the Ana Paula Project, Newstrike will pay to DMSL $1.5 million in cash and a number of common shares in Newstrike having a value of $600,000, such shares to be issued at a price that is based on the higher of the volume weighted average trading price of the shares of Newstrike on the TSX Venture Exchange for the 20 consecutive trading days ending on the trading date prior closing or the closing price of Newstrike’s common shares on the date the transaction was approved. The TSX Venture Exchange approved the transaction on April 28, 2010 and closing of the transaction is expected on or before June 30, 2010.

About Newstrike (TSX VENTURE:NES)

Newstrike Capital Inc. is a gold-silver focused explorer, targeting known and historic mining districts in Mexico. Current management and directors co-discovered Goldcorp’s and Teck’s significant discoveries in Guerrero Gold Belt in Guerrero State, currently in production, development and advanced stages of exploration.

Newstrike holds a 100% interest in certain exploration properties in Mexico located within two established mining districts; the gold bearing oxidized iron skarn-porphyry camp of the Guerrero Gold Belt, and the polymetallic Ag-Au-Cu rich epithermal camp of the mining districts of Oaxaca State.

SOURCE:
Marketwire: “Newstrike Signs Definitive Agreement to Acquire Ana Paula Project from Goldcorp”

Spot gold in London surged to above $1,230 a troy ounce, surpassing the previous record set in December last year.

Gold prices in euro terms also hit a fresh all-time [...]]]>

Gold prices hit an all-time high as demand surged to the highest level since the collapse of Lehman Brothers in 2008 amid volatile financial markets in Europe.

Spot gold in London surged to above $1,230 a troy ounce, surpassing the previous record set in December last year.

Gold prices in euro terms also hit a fresh all-time high of €969 an ounce in late trading in London on Tuesday, up almost 26 per cent since the beginning of the year.

Traders and coin dealers said buying was exceptionally strong from German and Swiss investors. In Frankfurt, gold sellers said that demand late last week was three to four times normal levels. The spike appears to reflect concerns in Germany about the potential inflationary impact of the European Central Bank’s decision to buy up eurozone government bonds in the wake of the Greek debt crisis.

Michael Kramer, president of Manfra, Tordella & Brookes, a large New York-based coin dealership, said: “The demand has been huge overseas. Most of it is ending up in Germany.” Edel Tully, precious metals strategist at UBS in London, added: “Coin demand is so intense that supply is struggling to match”.

UBS, one of the largest bullion banks, said its gold sales desks in Geneva and Zurich had experienced the greatest demand for coins and small bars since 2008 last Thursday, when markets were shaken by contagion fears in the eurozone.The Austrian Mint has sold 108,000 ounces of Vienna Philharmonic coins in the past two weeks, more than the 89,100 ounces it sold during the first three months of the year.

Kerry Tattersall, marketing director at the Austrian Mint, which sells the popular Vienna Philharmonic bullion coin, said the mint was producing “as fast as we can”.

“It’s quite a spectacular increase in demand.” “We’ve put on a third production shift so we’re producing around the clock,” said Kerry Tattersall, the mint’s marketing director.

Jonathan Spall, a director of commodities at Barclays Capital in London, said gold was likely to hit a “fresh all-time high before the end of the week”. Outside the eurozone, dealers said that demand was also strong in North America.

Holdings in physically backed gold exchange traded funds are at record highs after some ETFs last week experienced their biggest inflows in over a year.

Global investors have been increasingly turning to gold since 2008. Gold traditionally performs well during times of financial distress or in times of US dollar weakness.

Global investors, led by the US, last year bought a record 228.5 tonnes of gold in the form of bullion coins, up from 77.4 tonnes in 2000, according to GFMS, the London-based precious metals consultancy.

Source:  Financial Times

Lode deposits are the targets for the “hardrock” prospector seeking gold [...]]]>

Gold is relatively scarce in the earth, but it occurs in many different kinds of rocks and in many different geological environments. Though scarce, gold is concentrated by geologic processes to form commercial deposits of two principal types: lode (primary) deposits and placer (secondary) deposits.

Lode deposits are the targets for the “hardrock” prospector seeking gold at the site of its deposition from mineralizing solutions. Geologists have proposed various hypotheses to explain the source of solutions from which mineral constituents are precipitated in lode deposits.

One widely accepted hypothesis proposes that many gold deposits, especially those found in volcanic and sedimentary rocks, formed from circulating ground waters driven by heat from bodies of magma (molten rock) intruded into the Earth’s crust within about 2 to 5 miles of the surface. Active geothermal systems, which are exploited in parts of the United States for natural hot water and steam, provide a modern analog for these gold-depositing systems. Most of the water in geothermal systems originates as rainfall, which moves downward through fractures and permeable beds in cooler parts of the crust and is drawn laterally into areas heated by magma, where it is driven upward through fractures. As the water is heated, it dissolves metals from the surrounding rocks. When the heated waters reach cooler rocks at shallower depths, metallic minerals precipitate to form veins or blanket-like ore bodies.

Another hypothesis suggests that gold-bearing solutions may be expelled from magma as it cools, precipitating ore materials as they move into cooler surrounding rocks. This hypothesis is applied particularly to gold deposits located in or near masses of granitic rock, which represent solidified magma.

A third hypothesis is applied mainly to gold-bearing veins in metamorphic rocks that occur in mountain belts at continental margins. In the mountain-building process, sedimentary and volcanic rocks may be deeply buried or thrust under the edge of the continent, where they are subjected to high temperatures and pressures resulting in chemical reactions that change the rocks to new mineral assemblages (metamorphism). This hypothesis suggests that water is expelled from the rocks and migrates upwards, precipitating ore materials as pressures and temperatures decrease. The ore metals are thought to originate from the rocks undergoing active metamorphism.

SOURCE:
USGS: “Gold”

The world’s largest gold producer, Barrick Gold Corp. and other large miners are pursuing copper-gold projects and gold-silver projects, as pure gold plays become scarce, said Barrick [...]]]>

With bullion process hovering around near record levels, senior global gold miners are on prowl, competing amongst each other for established and emerging projects containing gold, copper and silver.

The world’s largest gold producer, Barrick Gold Corp. and other large miners are pursuing copper-gold projects and gold-silver projects, as pure gold plays become scarce, said Barrick spokesman Vincent Borg. “The reality is the world is pretty much explored in terms of pure gold deposits, so what people are looking for today are called gold- copper porphyries, where the copper comes with the gold, or multi- mineral deposits,” he said.

Last week, Goldcorp Inc. entered into the midst of Barrick’s deal to buy mining giant Xstrata PLC’s 70 per cent share of the El Morro Chilean copper-gold project. Goldcorp made an arrangement with New Gold, which owns the other 30 per cent of the project, with US$463 million to exercise their first, right of refusal and buy out Xstrata’s stake in the project, then sell Goldcorp a 70 per cent interest. Barrick may still return to the fray by making another bid for the El Morro project. Goldcorp’s actions follow on the heels of a successful bidding war with Minera Penmont for control of Canplats Resources Corp.’s Camino Rojo gold and silver discovery in Mexico.

Andre Hidi, head of global mergers and acquisitions at BMO Capital Markets, predicted an acceleration of M&A activity in the mining sector throughout 2010. Scotiabank vice-president and commodities specialist Patricia Mohr commented that because the potential for new gold projects is limited, large companies are keen to acquire projects from junior miners, which is often the most cost-effective way of doing business for both players. Though seniors are seeking large gold deposits, there are also seeking them to be located jurisdictions such as Chile and Mexico, which are perceived to be friendly towards mining.

To help position themselves to aggressively pursue acquisitions, senior producers are also rationalizing their portfolios, both to focus on larger projects and in the case of Teck Resources Limited, to reduce debt obligations. This allows opportunities for junior companies to pick up attractive assets.

Newstrike Capital Inc. announced it has entered into an agreement to acquire 21.2% of the Morelos Project from of Goldcorp. Earlier, Gleichen Resources had acquired the acquisition of 78.8% of the Morelos Project from Teck. The Morelos Project is located in the Guerrero Gold Belt (“GBB”) in the State of Guerrero, Mexico, north of Acapulco City. The GGB today has an inventory of over 12 million ounces of gold. Newstrike’s management team was instrumental in the discovery of over eight million of those gold ounces. This inventory continues to increase with ongoing exploration and mine development by all participants currently active in the area. In addition to the  proposed acquisition from Goldcorp, Newstrike control the largest land position in the GGB, a 100% interest in 81,330.04 contiguous hectares.

Source: Winnipeg Free Press