Combining a rich mining history with huge profit potential in the here and now, the Guerrero Gold Belt is one part of Mexico investors should have their eye on. Here's a look at some of the companies operating there today.
Combining a rich mining history with huge profit potential in the here and now, the Guerrero Gold Belt is one part of Mexico investors should definitely have an eye on. The belt is located in Southwestern Mexico in the state of Guerrero, which is bordered by the Pacific Ocean to the south and west, the state of Michoacán to the northwest, Morelos to the direct north, Puebla to the northeast and Oaxaca to the east. While agriculture is a huge driver of economic activity in the state, since 1924 mining has been a part of the equation as well. As Newstrike Capital (TSXV: NES), one of the many companies working within the belt, states on its website, that was the year gold was discovered at Xochipala. A couple of decades later, the Nukay mine, a small, underground, cut-and-fill gold-mining operation, went into production, and in the late 1980s, modern mining methods were introduced to the area. More in-depth mining began during the 1990s following the discovery of the Bermejal and Los Filos projects, and today the Guerrero Gold Belt continues to attract attention. Indeed, speaking last year to The Gold Report, Merrill McHenry, metals and mining analyst at Toronto's Industrial Alliance Securities, commented, "there are 30-40% more drill rigs operating in the GGB than there were one year ago." He said that part of the region's popularity stems from the financial advantages it holds. "In Mexico, because of the plate tectonics and the mineralogical events that occurred, many projects are oxidized instead of being sulfide," he told the news outlet. "If they're oxidized, as in the case of the Guerrero Gold Belt, a lot of the resources can just be dug up, trucked over to the leach pad and dumped. They don't have to mill and use a lot of chemicals and processing in the milling. Quite often, you really can't get much cheaper than the oxide resources that are prevalent in the [Guerrero Gold Belt]. It gives us some of the cheapest gold production costs in the world."