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Historical Mining In Mexico
Its been estimated one third of the silver currently in circulation was produced in Mexico. Mexico was the world?s largest silver producer for most of the past five hundred years. Today Mexico is ranked second in silver production behind Peru.
Silver mining in Mexico started in earnest with the conquest of the Aztecs by the Spanish Conquistadors in 1521. After Columbus established a Spanish beachhead in the Caribbean Queen Isabella of Spain sent Hernando Cortez in search of New World riches. That was in 1519.
What Cortez found when he landed on the Mexican coast at Vera Cruz was much much more than the Spanish could ever of dreamed about. Montezuma was ruling an advanced Aztec Empire that was already mining metals, and whose predecessors had been since at least 950AD. The natives had accumulated rich untold treasuries unlike anything Spain?s Conquistadors had ever seen.
In a very short time Cortez defeated Montezuma. The Aztecs were reduced to being mere laborers filling the galleon holds headed for Spain. Over the 300 years of Spanish rule Mexico produced hundreds of million of ounces of gold and silver. Than in 1810 Mexico revolted and during the ensuing War of Independence the mining industry was virtually shut down. Sonoran independence leaders also revolted but most landowners in Sonora were more concerned with fighting off attacks by the Apache Indians.
The Apache loved raiding and warfare, boys were trained for warfare since they were born and when fifteen were ready to go to war. The last band of Apache raiders, led by their chief Geronimo, were hunted down in 1886 and confined in Florida, Alabama, than finally Oklahoma Territory.
But the discovery of gold in Alamos brought a steady stream of settlers from the south, and by 1824 the former province of Sonora y Sinaloa had become the State of Occidente. Eventually, the Mexican government divided Occidente into the States of Sonora and Sinaloa. Sonora is a scarcely populated state with vast stretches of desert areas and early mining was extremely easy. Gold and especially silver/copper weren?t difficult to find on the surface and they dug until the high grade ore ended or the digging got too hard/unsafe. Than they simply found a new spot and started over. Mostly all they ended up doing was scratching the surface of the underlying ore body or vein.
Political unrest in Mexico lasted over a century and led to the Mexican Revolution in 1910. It took until 1917 before the Mexican Constitution was established, than two decades and more passed before civil unrest in Mexico subsided and post-revolutionary industrialization began.
Modern Mining In Mexico
A new mining law in 1961 required majority Mexican ownership and management of all mining companies. Within ten years, most companies had been Mexicanized - the government granted new concessions only to Mexican owned enterprises. The state vastly expanded its involvement in mining during the 1970s. The 1975 mining law restricted foreign companies to 34 percent participation in mining concessions on national reserves and in exploitation of certain minerals. Than in 1992 (The bulk of Mexico's 1992 copper output came from Sonora, where the country's three largest mines--La Caridad, Cananea, and Mar?a--are located) mining laws were changed in anticipation of the North American Free Trade Agreement (NAFTA). The new laws allowed 100 percent foreign ownership of Mexican mines.
Under the Mexican Constitution the exploration, exploitation and beneficiation of the minerals will have preference over any other use for the land. Exploration concessions are granted for six years and are not renewable. There are no limits for the mining concession surfaces. Production concessions are awarded for 50 years and are renewable for a similar period. In 1994 the North American Free Trade Agreement was implemented and the Peso was devalued. Because of low metal prices and a devalued Peso many walked away from toiling in the earth, shutting down their mines and finding new livlihoods.
But in the late ?90?s a new era was beginning as Canadian miners quietly began to accumulate projects. Mexico has benefited from considerable foreign investment into its mining industry. Conversely the importance of Mexico to Canada?s mining industry is confirmed by a 2004 report entitled ?Current Mexican-Canadian Relations in the Mining Sector? by Cecilia Costero. The report describes Mexico as almost entirely mineralized with an estimate of 85% of mineral reserves yet untouched.
Today, mining in Mexico might be better than ever. A very few companies, like Oroco, have chosen to use their capital to re-open existing mines, confirm historical resources (at the former Cerro Prieto mine the historical defined resource relates to less than a 15 percent section of the target area) and quickly move towards possible production in a very short time frame. Most of these mines are fully permitted and like Cerro Prieto are close to all necessary forms of infrastructure.
In Mexico the best place to find gold, silver, lead, zinc and moly is at a former polymetallic mine, where modern engineering, geological modeling and drilling techniques were never implemented. And, in Cerro Prieto?s case, with a considerable area yet to be explored utilizing modern exploration practices there?s enormous bluesky potential.
In The Headframes Shadow
In Mexico just six out of thirty one states account for 85% of the value of mining production: Sonora (34%), Coahuila (16.1%), Zacatecas (14.9%), Chihuahua (8.8%), Durango (5.7%) and San Luis Potosi (5.4%).
Northern Sonora is a prolific mining area rich with significant mineral deposits. Subject to confirming the 8.5 million ton historical resource at the former Cerro Prieto mine it should be among the top tier of deposits in the region. Underground sampling last year has confirmed the historical work so far, and drilling will soon start to provide the rest of the evidence. Ken Thorsen is directing this phase one program with Antonio Montante, a Mexican geologist who has worked with him at Teck and a number of juniors.
Several projects in the area are relevant to our location at the former producing Cerro Prieto Mine.
Twenty-five km to the south-east of Cerro Prieto is the La Mercedes/Klondike project owned by Yamana Gold. Yamana recently announced a 750,000 oz. gold resource and will be spending $15 million this year to expand the ore body.
Mexico?s biggest gold mine La Herradura is in Sonora and is owned and operated as a joint venture between Newmont Mining and Mexican mining conglomerate Industrias Penoles.
Hochschild Mining owns the San Felipe project which is located 80 km to the SE of Cerro Prieto. Hochschild Mining plc has an option to acquire up to 70% of all mining rights and ownership of the San Felipe property after spending US$33.3 million. It is their largest development stage project and is comparable to Oroco?s in that it is polymetallic.
Grupo Mexico owns the the Cananea Mine 30km NE of Cerro Prieto Its an open-pit copper mine that is one of the world's largest copper ore deposits. Cananea's original deposit was in excess of 1 billion tons. Grupo Mexico also owns the La Caridad copper mine 80 km east of Cerro Prieto and this is Mexico's most productive copper mine.
Most students of history are familiar with the Mexican Revolution fought early in the 20th century. Fewer are familiar with the seat of the revolution, the Cananea mine-adjacent to the town of Cananea in Sonora, northern Mexico. The June 1, 1906, labor strike, precipitated by working conditions, began the peoples' struggle that culminated in the revolution.
?The name Cananea comes from one of two sources. One theory holds that it comes from Apache words meaning horse meat, a culinary luxury; another holds that it comes from the nickname -- La Cananense -- of a beautiful woman.
The first non-native visitors to this region were Jesuit priests who arrived in 1760 and discovered and extracted gold and silver. General Ignacio Pesqueira, from nearby Arizpe, followed up on the Jesuits' mining (after discovering their abandoned mines during battles with Apaches). The general's efforts returned Cananea to mining by 1868.
Cananea's mine, owned by conglomerate Grupo Mexico, is the largest copper-producing mine in Mexico. It employs several thousand workers and dominates the economy of northeastern Sonora. But today's tranquility belies a turbulent past.
The Cananea Consolidated Copper Company, founded in 1899 by William C. Greene, an Arizona prospector, fought a strike in 1906 that resulted in the deaths of 23 people as strikers battled a posse spearheaded by Arizona Rangers. The fatalities took place when strikers, protesting a disparity in wages and working conditions of 2,200 Americans versus 5,500 Mexicans, marched on mine facilities guarded by Americans. Although the workers' grievances were not addressed, the incident is considered a prelude to the Mexican Revolution of 1910.? (taken from ?Gritty mining history anchors celestial views in Cananea? by Keith Rosenblum)
To the immediate north of Cerro Prieto, about 20 km, is the Santa Gertrudis open pit gold mine, mined in the 1990's and currently being explored for resources below the old pits.
Oroco Resource Corp OCO-V:OCO
Oroco's focus will be the delineation and development of economic mineralization at the former Cerro Prieto Mine. The project comes with an historic resource calculated at 8.5 million tons of polymetallic (gold, silver, lead, zinc, moly) mineralization.
These historic resource numbers were the result of a twenty three hole reverse circulation drilling and underground sampling program that was confined to the area of historic mining activities at the Cerro Prieto mine on just 800 meters of strike length of the geologic structure. Between its three 100% owned concessions Oroco now controls almost 6.5 kilometers of strike length potential of the geologic structures that hosts the Cerro Prieto Mine.
Points to Ponder
*Infrastructure ? Power, water, trained eager workforce, a fairly large city close by for supplies, storage buildings, easy road access to project, a mining friendly government, no green issues, friendly tax regime and fast permitting.
*Significant underground development and access already in place. Drilling from underground will save a lot of money. 360 degree fan drilling will give you more comprehensive data and be much cheaper than drilling from surface.
*Mineralization starts right at surface extends to depth vertically and is an excellent mineable width. The possibility of employing Long Hole Stoping is very real.
*All property payments have been made and Oroco owns 100% of all three of its projects/properties, with $2.5 million in the treasury. No dilution to raise money solely for a property payment.
*World Class management that can run exploration and
development campaigns. With an IPO at .55/1/2 warrant at .90 they can also obviously raise money.
*Historical polymetallic resource of 8.5 million tons. Oroco controls 100% of 6.5 kilometers of the 10 kilometer geologic feature that hosts the former Cerro Prieto mine.
*Incredible bluesky potential to increase the size of the historical resource as the mineralization at the mine is open to the north, the south and to depth with less than 15% of the property tested with modern exploration methods.
*No value is being assigned into the share price for Oroco's two gold properties.
*Company founders and insiders are in an escrow agreement for share release over the next three years.
*Country risk - Mexico is a mining friendly nation with stable political and financial systems. Mexico has an exceptionally long mining history, excellent infrastructure and sensible, rational environmental policies. Mining rights are protected in the Mexican constitution and Mexico is a signatory to NAFTA which provides significant protection to Canadian mining companies working in Mexico.
*Currency risk is mitigated by the fact Mexico has adopted a fixed exchange rate regime through which the Mexican Peso is linked to the US Dollar.
Disclaimer
The above article is in no way a solicitation to buy shares of Oroco Resource Corporation (OCO.v). The author is not a licensed investment advisor and cannot know your individual circumstances or risk tolerance. You must do your own due diligence and you and you alone are responsible for your decisions. The author owns shares in Oroco Resource Corp and is biased. If you wish to receive regular updates about Oroco Resource Corp. and learn of other exciting juniors in the resource sector please contact Northern Venture Group.
Rick Mills
President
Northern Venture Group
rick@northerventuregroup.com
www.northernventuregroup.com
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