Gold looks to be making a turn again as it has added more than $10 back to its totals so far this week; breaking back north of $1,370 U.S. per ounce. While some people remain focused on the short-term aspects of gold prices, the majority of investors in the precious metal or mining companies are still focused on the long-term picture which has most people expecting the prices to continue upward in coming years.
Other metals such as silver and copper continue to be in high demand and are not anticipated to see any significant decline in price in the near term and certainly not in the future with analysts, once again, calling for increases prices for the valuable metals.
Mining companies continue to search worldwide to find locations where gold is prolific, with contrasting opinions in many cases. Africa has historically been a global leader as a producer of gold, but data shows that it has been sliding over the years as many mines are reaching the end of their lifespan and miners are working towards production in new mines in the years to come.
The United States and Mexico, which weighed in at producing only around 4% of the world’s gold back in the 1970s have experienced a turn over the last couple decades with production now in the neighborhood of 10% each year of the world’s gold.
Recent news about tapping into the potential of Mexican gold and metals has seen some press by several major miners including industry giant, Goldcorp, Inc. (TSX:G, NYSE:GG). Goldcorp, who put itself together a banner gold production last year as it recently released that gold production for the company increased to a record 2.52 million ounces in 2010.
Goldcorp also announced that it forecasts 2011 gold production to grow to 2.7 million ounces and places its five-year gold production projection estimate to increase by 60% (70% on a gold equivalent basis). A large portion of the forecasted gold production for 2011 is coming from its Mexican properties. In fact, Goldcorp estimates that 780,000 ounces of the 2.7 million ounces are expected to come from its Mexican operations.
A portion of the anticipated growth is going to be derived from Mexico as it has now completed construction on its Penasquito mine. In addition to this new mine, Goldcorp apparently sees a great deal of value in Mexican properties as it also has other operations in Mexico including El Sauzal, Noche Buena, Camino Rojo and Los Filos; representing 25% of its operations being in Mexico. Because of its properties and developments, Goldcorp is being looked at as an undervalued company as it is trading in the area of $40 per share with analysts believing that significant increases in gold production will be following over the next couple years; coupled with estimates that gold prices will continue on to new highs as well.
Another gold mining company that is producing gold and other metals in Mexico is Toronto-based Primero Mining Corporation (TSX:P). The precious metal producer is primarily focused on Mexican ground and its wholly-owned San Dimas gold/silver mine in Mexico’s San Dimas district. Primero owns the Ventanas property in the Ventanas Mining District or southern part of the San Dimas District along the western flank of the Sierra Madre Occidental mountain range in Durango State, Mexico.
The Sierra Madre Occidental is one of the largest volcanic belts in the world and most prospective in terms of gold and silver, and polymetallic deposits. Primero, recently announced its production totals from its 2010 mining operations at San Dimas which produced over 100,000 ounces of gold equivalent.
The San Dimas gold-silver deposit is one of the most significant precious metal deposits in Mexico in a very large, 225-square-kilometre mining district. Historical production from the San Dimas district is estimated at 11 million ounces of gold and 582 million ounces of silver, affirming it as a world class epithermal mining province. Primero intends to continue both exploration and mining activities in this prolific area for many years to come.
While these larger mining corporations offer valid investment opportunities, mining investors are always on the search for junior miners that are properly positioned to capitalize on in regions where larger miners are already producing. Vancouver-based Westminster Resources, Inc. (TSX-Venture:WMR) has strategically acquired multiple properties to add to its portfolio with the purchase of "EL COBRE" and "NAVOJOA" properties.
The properties are located in areas with long histories of proven reserves in areas of Mexico that are located in close proximity to operated and producing mines. These projects are surrounded by the properties mentioned above that are currently being mined by Goldcorp and Primero.
"EL COBRE" covers an area of 24,156 hectares and is located in Sonora state, Mexico. Within the EL COBRE property, the Los Amigos, El Guayacan, Los Alamos, (all former mines) and the famous Anita Copper Mine are all examples of near surface, vein-type prospects having elevated grades of gold-copper and silver. Within the project area, these high grade gold-copper-silver veins, breccias, and diatremes have been identified by the Company as being associated with porphyry deposit-style mineralized systems.
The fact that these projects are in close proximity to producing mines is promising on its own, but these properties have been historically worked and produced significant gold, silver and copper reserves as well. Westminster intends to elaborate on the historic data by conducting modern methodologies and drill testing, which has never been performed.
The Anita Copper Mine portion of the EL COBRE property has a long history of production and even had a much larger-scale development underway by the Douglas Copper Mining Company before being interrupted by the Mexican Revolution in 1910. Obviously, more than a hundred years ago, a dollar went much further than today. Douglas had invested over $12 million in the project at the time of cessation.
While the mine was operational and producing, its full potential was never realized.
Although the information is historic and not 43-101 compliant, it is encouraging as shown in a report detailing two separate areas of mineralization were blocked out within the mine that graded in one area, 42,000 tons at 5.815 gms/ton gold, 62.20 gms/ton silver and 4% copper, as well as a second area, also with 42,000 tons, at values of 8.0 gms/ton gold, 124.4 gms/ton silver and 6% copper.
Additional research conducted by Westminster has traced the surface expression of the Anita Copper Mine for 600 meters and at the Los Amigos Mine located 3 km to the South for 400 meters on surface. Additional testing by CSAMT surfical geophysical surveying and 3500 meters of NQ sized diamond core drilling program commenced in November 2010 on the projects.
Financing has been arranged recently for Westminster through the closing of placements which have provided the Company with more than $3 million in working capital to continue exploration and drilling programs. Westminster is led by a top-notch executive team with decades of experience and history of success in bringing developmental mining companies to production.
Technically speaking, the WMR stock price has seen a nice climb over the last five months and after touching a high of $0.73, has formed a solid support level in the area of $0.55, which is where the share price is currently resting. With less than 45 million shares outstanding the room for a share price increase certainly is possible with significant findings from the drilling programs.
The value of having some larger, slower moving safe plays in a portfolio cannot be challenged as a wise investment strategy. But those that are committed to investing in mining companies also tend to carry junior miners in their portfolio as well due to the possibility of strong gains with the announcement of any significant discoveries and potential when positioned in prime locations.
Due diligence is mandatory for an investment as well as consult with a financial advisor, but what we at AllPennyStocks.com have found so far on Westminster Resources is very encouraging, to say the least.
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