Building a Gold District
September 8th, 2008 | by mantrionline |Animas Resources (TSX.V:ANI) has held and even increased in value through the last year’s financial turmoil. While other companies on the Venture Exchange have seen their market caps plunge, in many cases, as much as 90% from their 52 week highs, Animas’ chart demonstrates a shareholder base clearly committed to the company’s future.
The reason for the commitment is embodied in the Santa Teresa Gold District in Sonora, Mexico. Animas, whose management team is led by Phelps Dodge alumni Greg McKelvey Phelps Dodge discovered the Santa Gertrudis gold deposit in 1986 and began producing gold from an open-pit, heap-leach operation in 1991.
Under first Phelps Doge and then Campbell Resources, who purchased the project in 1995 for $10 million, the deposit yielded 564,000 ounces at an average grade of 2.13 grams per tonne.
Animas acquired the property in 2004 and with additional staking now controls a land package of 34,000 hectares, or 214 square miles. The company completed a geochem and geophysics survey in June to identify potential drill targets. Animas commenced drilling on selected targets in June and a steady stream of results are expected imminently.
Remaining historic resources for the SG Property as recorded by Campbell when production ceased in 2000 are non-NI 43-101 compliant and include 8.1 million tonnes averaging 0.94 g gold per tonne on the Lopez-Limon concessions, and 5.9 million tonnes averaging 1.71 g gold per tonne on Sonora Gold Corporation’s concessions.
A 1997 report by respected geological consulting firm Behre Dolbear & Company concluded:
“that the property contains potential for a deep, Carlin-type target from an examination of the property and the presently available data for the project. The geology, structure, geochemistry, geophysics and mineralization are indicative of this type of system and the similarities to the Post-Betze deposit are very striking. Santa Gertrudis is at the same position the Carlin Trend was at the point in time Barrick bought the Gold Strike property from Western States Minerals and started their deep exploration program.” and “The deep exploration potential at SG is very positive and the chance for deep mineralization is very good. The surface potential, as you know, is without question”. There is excellent potential for additional shallow gold deposits both adjacent to known oxide gold occurrences and under shallow gravel cover.”
The theory that sections of Sonora had the potential to host a massive Carlin-type system is not new. Geologists operating throughout the state have commented on such a potential since the late 90’s, and continuing exploration by other companies in the region tend to lend credence to the idea.
The country’s largest gold mine is La Herradura (produced 5.6 t Au in 2006) located on the Gulf of Cortez in the state of Sonora followed by Mexico’s richest gold mine, i.e. La Cienega (4.7 t Au in 2006) located in Durango. In 2006 Mexico produced 35 tonnes of gold which represents a 30.8% increase over the previous year. Several projects are scheduled to be completed shortly or have already commenced commercial production so the figures will see an increase in 2007. Amongst the companies that play a significant role in gold production are Industrias Penoles, Luismin and Dowa Mining.
Political and financial stability, legal security for investors and its location next to one of the worlds top importers of resources are all positive factors impacting Mexico’s mining industry today. Canadian mining corporations lead the global mining industry. The Canadian industry ranks first in the global production of zinc, uranium, nickel and potash; second in sulphur, asbestos, aluminium and cadmium; third in copper and platinum group metals; fourth in gold; and fifth in lead. It has interests in over 8,300 properties worldwide – 3,400 of which are in 100 foreign countries. In Latin America and the Caribbean, which have been identified as the main current geographical target for mineral exploration, Canadian mining corporations represent the largest percentage of foreign mining companies – with interests in more than 1,200 properties. In 1998, over $4.5 billion USD were raised by Canadian mining companies through domestic and foreign projects which represented 51% of the world’s mine capital.
In a 2005 address, the Canadian Ambassador to Mexico, Gaetan Lavertu noted that “well over half of the foreign mining concessions issued in Mexico are registered to Canadian companies. The bulk of these investments are from British Columbia…Mexico recognizes Canada’s leadership and technological advantages in the minerals and mining equipment business”.
Animas Resources continuing representation of this Canadian legacy in Mexico is a certain outcome of its activities in Sonora State. In view of the economic importance of mining in Mexico, and the massive investment that companies like Animas bring in to establish thriving economies, the continued success of Animas means a win for everyone – investors, Mexicans and Canadians.
