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

Gold production rose to 4,591 kilograms in February, the institute, known as Inegi, said, from 1,444 kilograms a year earlier.

Silver output rose to 225,516 kilograms from 81,114 kilograms, [...]]]>

Mexico’s February mining output showed big gains in gold, silver and lead, with overall production 33% higher than in the year-ago month, the National Statistics Institute said Friday.

Gold production rose to 4,591 kilograms in February, the institute, known as Inegi, said, from 1,444 kilograms a year earlier.

Silver output rose to 225,516 kilograms from 81,114 kilograms, and lead increased to 8,884 metric tons from 2,650 tons.

The big increases in silver, gold, and lead production reflected a 66-day strike last year by the National Mine and Metal Workers Union, which shut in production at the refinery in Torreon run by Industrias Penoles. Penoles is the parent company of London-listed Fresnillo PLC, which is the world’s largest primary silver producer.

Inegi said that February mining production was 2% higher compared with a month earlier.

Other year-on-year production gains in February included iron output, which rose to 604,978 tons from 454,895 tons, and zinc, which rose to 31,776 tons from 29,781 tons.

Copper production fell to 18,197 tons from 18,923 tons, and coal fell to 700, 458 tons from 885,024 tons.

By Laurence Iliff for Dow Jones Newswires. May 3, 2010.

SOURCE: Nasdaq:

A Brief History

The bedrock deposits of the great silver-gold vein system of the Veta Madre at Guanajuato [...]]]>

Mexico has a fairly long history of mining which dates back almost 500 years. Today, it continues to stand as one of the world’s largest producers of metal and it is known as a major destination for mineral exploration.

A Brief History

The bedrock deposits of the great silver-gold vein system of the Veta Madre at Guanajuato were discovered in the year 1550 and unearthed almost immediately. El Oro, one of the leading gold districts but presently without any significant gold deposits, was discovered in 1521, developed to a great extent by 1530, and mined regularly with some interruptions for about 400 years in the following period generating an output in excess of 5 million oz. of gold.

In the late sixteenth century, the mining industry in Mexico began expanding. Mexican President José de la Cruz Porfirio Díaz brought about modernization of the mining sector during his presidential career, which lasted for thirty-four years (except for 1880 to 84). In 1884, mining code was reformed and subsoil ownership was given to landowners.

The miners in Sonoran Mexico adopted a method for pulverizing gold ore that required no water in the primary stages of gold processing. Termed as the arrastre, this system comprised of an upright axle with large spokes that used horses or mules dragging a heavy rock in a circular motion, which would pulverize the ore. After the rock was pulverized, the miners then made use of gold pans for the final processing.

“A New Gold Rush”

Mining is now returning to Mexico in a big way as the prices of metals – particularly precious metals – have increased. Rich mineral deposits and fair mining regulations in Mexico have also been contributing factors to an increased mining community and mines that were shut down in the first part of the twentieth century are being restarted and are turning profits once again.

A new gold rush fuelled by increased foreign investment in gold exploration and development activities brought Mexico’s mining output to a record high in the year 2007.

Speaking at the Prospectors and Developers’ Association of Canada convention, Mexico’s economy minister Eduardo Sojo Garza-Aldape said Mexico’s gold mining is currently experiencing the “best period” in its history.

Investment by foreign companies in Mexico has taken a huge leap to about $700 million in 2007 from a meager $750,000 in the year 2000. Many locals are also reaping the benefits, with 300,000 people employed in the mining industry, as of 2007.

One of the companies in the region is Newstrike Capital. Though they are strictly an exploration company, members of their team have been instrumental in discovering major gold deposits in the Guerrero Gold Belt – a mineral rich area in the southwest of Mexico.

With strategic landholdings in both Guerrero and Oaxaca, Newstrike is poised to find even more gold in an area that has – to date – yielded over three million gold ounces in every discovery and is still proving itself to be a historically mineral rich mining district.

SOURCE:
History of Mining in Mexico

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