Newstrike Blog » Mining In Mexico

Mexican Gold Mine Holds Promise For A Beleaguered Country

ckeddy — Tue, 25 May 2010 01:50:05 +0000

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

Newstrike Capital Receives $2 Million Termination Fee

Michaela Davies — Tue, 16 Mar 2010 23:49:08 +0000

Vancouver, B.C., March 16th, 2010 – Newstrike Capital Inc. (“Newstrike” or the “Company”) – www.newstrikecapital.com – announced today that it had received the $2 million termination fee that was due to it under the terms of its share purchase agreement with Desarrollos Mineros San Luis, S.A. de C.V. (“DMSL”). a wholly –owned subsidiary of Goldcorp Inc.

Under the share purchase agreement with DMSL, Newstrike agreed to acquire DMSL’s 21.2% interest in the Morelos Project in Mexico. DMSL agreed that it would pay a $2 million termination fee if the transaction did not complete because of the exercise, by Gleichen Resources Ltd., of its right of first refusal to acquire DMSL’s interest. On January 21, 2010 Gleichen announced that it had decided to exercise its right of first refusal. The Gleichen / DMSL transaction closed on February 24, 2010.

Newstrike Capital Announces Strategic Advisors

ckeddy — Mon, 09 Nov 2009 19:23:31 +0000

Vancouver, B.C., November 9, 2009 – Newstrike Capital Inc. (the “Company”) – www.newstrikecapital.com – announces today the appointment of John Morganti and George Brack as advisors to the Company. Messrs. Morganti and Brack will be actively assisting the Company’s Board of Directors in connection with a strategic review of the Company’s significant mineral properties in the State of Guerrero, Mexico.

Mr. Richard Whittall, Newstrike’s CEO noted “We are fortunate to be working once again with John Morganti and George Brack, both of whom possess formidable mining credentials and truly understand the exploration potential of our Company’s properties. The Guerrero Gold Belt is an exciting place to be and we look forward to their advice in charting a course of action.”

John Morganti

John Morganti (P. Geo., Ph.D.) is currently President of Morganti Advisers Inc., a company specializing in advising mining and exploration companies on strategy, evaluation, investor relations, exploration and financing issues, which are critical to rational growth and maximizing shareholder value of those companies.

Over the past 35 years, Dr. Morganti has worked at Teck, Placer Dome, Silver King Mines, David Lowell Consultants and with consulting firms working in Alaska. In addition, he has been a director of Canadian and Latin American public companies.

At Teck Corporation and its successor companies, Dr. Morganti has held office as Vice-President, Gold, Vice-President, Evaluations, Director, Precious Metals, Director, Project Development. Before his retirement from Teck in 2009 Dr. Morganti was Director, Market Analysis and reviewed new commodities-based industries and strategic issues for Teck.

Previous to joining Teck, Dr. Morganti worked with Placer Development and its successor Placer Dome. At Placer he held office as Manager, Project Development, Evaluation Engineer in the Project Development Department and Manager, Exploration Eastern Canada. With the opening up of the world to mineral development in the 1990s, he was Vice- President, Europe, Africa, Middle East and South East Asia, and was based in Miami and London, England.

Dr. Morganti has participated in a number of teams which discovered new mineralization from grassroots programs, which moved projects from initial discovery to feasibility stage, which developed mines in North America and Australia and which managed acquisitions of projects, mines and companies. At Placer Dome, he was instrumental in initiating the concept of MinEx/CampEx at eastern Canadian mines. This concept led to new finds at the Dome Mine, Detour Lake and Campbell Red Lake mines and was used to find new gold deposits at mines in Nevada and Australia.

George Brack

Mr. Brack’s 25-year career in the mining industry has focused on investment banking and corporate development, specifically identifying, evaluating, and executing strategic mergers and acquisitions, and the provision of equity financing. Most recently Mr. Brack acted as the Managing Director and Industry Head, Mining Group, of Scotia Capital. Prior to joining Scotia Capital in 2006, Mr. Brack spent seven years as President of Macquarie North America Ltd., an investment banking firm specializing in merger and acquisition advice. Previous to that, Mr. Brack was Vice-President, Corporate Development at Placer Dome Inc., was Vice-President of the investment banking group at CIBC Wood Gundy, and worked in Rio Algom’s Corporate Development department. Mr. Brack currently serves as a director of Alexco Resource Corp., Capstone Mining Corp., Geologix Exploration Inc. and Red Back Mining Inc.

Mr. Brack holds a BA. Sc. in Geological Engineering from the University of Toronto, an MBA from York University, and the CFA designation.

About Newstrike (NES.H – TSXV)

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 & Teck’s significant discoveries in Guerrero Gold Belt in Guerrero State, currently in advanced stages of exploration and production.

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.

For further information contact:

Richard O’C. Whittall

Chief Executive Officer

Phone: 604.604.4654

website: www.newstrikecapital.com

blogsite: http://newstrikecapital.com/blog