With gold hovering above $1,600 and European debt uncertainties looming with P.I.I.G.S. (Portugal, Italy, Ireland, Greece, Spain), investors are flocking to mining stocks globally for safety and security. One country that is benefiting from mining companies is Peru. It is the world’s largest producer of silver, 3rd largest of copper and 5th largest of gold. It is by far the largest producer of gold in Latin America. Gold accounts for a third of Peru’s export revenue. The vast reserve of the country’s minerals is regarded to be only 10% explored nationally.
It is surprising that Peru has had one of the best performing financial markets of the last decade. The Peru Lima broad market had a gain of 1,700% from July 2000 to July 2007. At a crossroad between two of the world’s fastest growing economies, China and Brazil, the trans-continental highway has opened connecting a number of deep water ports in North Peru with the Port of Manaus on the Amazon. This highway across the Andes is expected to add more than 1% to GDP, facilitating Chinese export from Brazil’s agriculture centers, and replace the Panama Canal as the main passage for trade between those countries.
One company that is currently making headlines and that secured its potential $3 billion gold reserves at Rocas #2 concession of Antamina mine is Portage Resources Inc. (OTCPK:POTG). The company is focused on the exploration and production of precious and base metals in Peru. Portage Resources Inc. plans to recognize and acquire near-term production mining properties with its seasoned and experienced Peruvian management team .
This Ancash Region concession is comprised of 1200 hectares of rich polymetalic formations. The Antamina is located in the district of San Marcos, Ancash Region, 200 kilometers from the city of Huaraz at an average altitude of 4,300 meters above sea level. Other well known companies that had operations in Peru include the Australia’s BHP Billiton (BHP), Freeport McMoran Copper & Gold (FCX), and Pan American Silver Corp. (PAAS). Antamina has had the highest investment in the history of Peruvian mining, with an initial investment of approximately $2.2 billion. The $2.2 billion construction program was one of the largest new mine development projects ever undertaken. An additional $1.2 billion investment has been made to expand its operations.
Today it is one of the ten largest mines in the world in terms of operating volume. The total proven and probable reserves amount to 745 million metric tons.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.