In the crowded junior mining space, Pan American Goldfields Ltd. (OTCQB: MXOM) stands out for two simple reasons: It's not just another gold exploration company but is also a gold producer; and second, it has assembled an executive team with an extensive track record of building major mines and companies. The real question is: What is the next major project for this cash-flowing junior?
This Vancouver-based mining and exploration company is generating stable revenue from pilot production at its Cieneguita mine, located in the Sierra Madre gold-silver belt of Mexico. The Sierra Madre is the world's largest epithermal precious metal province and hosts the majority of Mexico's gold and silver deposits. More than 40 million ounces of gold and 2 billion ounces of silver have been produced there since 1992.
Containing an estimated 1.1 million ounces of gold equivalent, the Cieneguita deposit is large enough to support a significantly scaled-up mining operation. In July 2011, the company hired M3 Engineering (which has engineered half the new mines in Mexico over the past two decades) to complete a Preliminary Economic Assessment for a much larger mining operation. That scoping study is scheduled to be completed by August this year. In the meantime, per the Company's agreement with Minera Rio Tinto, which is solely for the small-scale production of gold and silver, Pan American is generating positive cash flow from the operation and expects to generate revenues exceeding $2 million in 2012 - an amount that goes a long way toward its exploration efforts. At the end of 2012, 100% of the property reverts back to MXOM, after which the Company expects to increase its revenues significantly.
MXOM is also developing the Cerro Delta gold-copper project in Argentina's Maricunga gold belt. The 51,200-acre project is located just 12 miles from Barrick-Kinross's Cerro Casale property, one of the world's largest undeveloped gold-copper deposits, which has gold reserves of 25 million ounces. MXOM's Cerro Delta property is on the same structural trend and is considered geologically similar to Casale and the 44 million ounce Au eq. Caspiche, which is just northwest of Casale. The Company recently filed an NI 43-101 technical report on the Cerro Delta property. The project is well recognized by the area's experts and was also used in a research report by Standard Chartered Bank as an example of the potential for gold production growth for the entire continent.
The Company's management team has a long, successful track record of discovering and developing major mines such as Barrick's biggest producer, the Veladero gold mine. On the deal-making side, one executive is the founder of royalty-buyer IRC, which Royal Gold bought in 2010 for $700 million. Yet even with its skilled executive team, excellent project pipeline and gold-producing status, MXOM has so far escaped the market's notice. It's only a matter of time before major investors find MXOM and begin to bid up its shares. Don't miss your chance to accumulate shares at today's low prices.
You'll have the opportunity to hear from MXOM's management later this month at the RedChip Small-Cap New York Conference, taking place April 26 at the Harvard Club of New York. For those unable to attend, company presentations made at the conference will be webcast live at RedChip.com. Visit http://www.RedChip.com/conference to learn more.
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