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Report on Argentina Gold Mining

 Abridged Version - October 10, 2007

 
 

Argentina's untapped potential and mining growth trend
By James O'Rourke, Staff Mining Journalist - October 10, 2007

 

      The evolution of Argentina as an emerging mining powerhouse is attributed to a combination of factors that are being capitalized on now by mining companies that understand as one operator put it "Argentina is the place to be for untapped potential in a stable, favourable mining investment climate".  The bulk of Argentina's mineral production is concentrated along the Andean Codillera, and this area remains relatively untapped; Argentina has not seen systematic exploration like mining hot spots of neighbour Chile which has proven enormous potential and shares similar geological makeup to Argentina's western frontier along the Andean mountain chain.  It is estimated that less than 25% of Argentina's territories have been surveyed for possible exploitation. Argentina is currently attracting increased investment in exploration, offering astute mining investors many unique opportunities.
 

NW Argentina as a preferred highly prospective region:  The significance of the enormous potential of this prolific yet still under explored region is typified by Newmont Ventures, a division of Newmont Mining Corp. (NYSE: NEM
chart news) September 26, 2007 announcement of gold exploration with Cardero Resource Corp. (AMEX: CDY chart news) "Cardero and Newmont Propose to Form Strategic Gold Exploration Alliance Targeting NW Argentina". With global gold production and reserve growth lower and demand poised to unendingly rise in this growing global economy, suppliers like Newmont are engaged in an environment of aggressive exploration. NW Argentina is one of the most prolific regions and host to a number of prospective mining concessions including Yamana Gold Inc.'s (NYSE: AUY chart news) 2.9M oz Gualcamayo gold deposit. North of the Yamana Gold deposit is the El Torno Gold Project of recently listed Soltera Mining Corp. (OTCBB: SLTA chart news) where Soltera possesses a large gold-rich quartz vein up to 14 km long and 14 m wide. Soltera's El Torno Project has the earmarking of a significant gold mine and is the subject of a Special Advisory/Study Section (See Special Advisory/Study Section below).
 

Pulse of affairs in Argentina for the mining sector:

 

     With large and potentially rich metalliferous mineral areas in Argentia's Andean region, and non-metalliferous mineral deposits elsewhere within its territories, the mining industry was underdeveloped for decades and had traditionally contributed less than 0.5% to the gross national product of the country. However since initiating the development of investor friendly mining laws starting in 1993, Argentine mining exports have grown 106% and according to the government estimates mining investment will reach US$5 billion in the next five years, 15 per cent of the world total.

 

- Legislation now provides legal and economic safeguards for foreign investors including:

1) foreign companies, without limitation, are allowed to be exclusive owners of mining properties.

2) A stable tax rate that lasts for 30 years following the submission of a feasibility study to the Secretary of Mines.

3) Financial inducement for mining investors.

4) Uniform application of new mining laws.

 

- National government policies favour development of mining concessions where reasonable and adequate environmental plans are in place for a win-win scenario. However, mining companies must work closely with the provincial governments and local groups as provincial governments have a significant role in the awarding of mining concessions and in the regulation of environmental matters. Provincial governments, ever mindful of re-election, make it imperative for local mining operators to be vigilant in ensuring they have the local populace on side and satisfied that a responsible & adequate plan is in place and that they will benefit from the mining presence.

 

 

Commentary on economic and political happenings in Argentina is found at the bottom of this abridged report.

 

A list of notable mining participants and projects in Argentina is found near the bottom of this abridged report.

  Content found herein is not investment advise see Terms of Use, Disclosure & Disclaimer

Special Advisory/Review - Case Study: Soltera Mining Corp. (OTCBB: SLTA chart news)(Frankfurt: SN7) offers tremendous potential for gold in Argentina (in the province of Jujuy, located in the Andean Cordillera in the extreme north-west of Argentina near the international border with Bolivia) as Soltera possesses a large gold-rich quartz vein up to 14 km long and 14 m wide known as the El Torno Project. Soltera's operation is backed with a highly skilled technical team that includes SLTA's President Dr. Fabio Montinari and Dr. Kevin Ashworth, both whom have extensive knowledge and background in the mining industry. A particular clue for investors would be the calibre of individuals involved; Dr. Ashworth is retained as an adviser by several London investment organizations and Dr. Montinari has personally relocated from his university professorship in Italy to Soltera's El Torno property in order to ensure proper execution of their plan and maximize shareholder value.

 

The El Torno Project is a past producing gold mine that was worked by the Incas, Jesuits and Spanish in parts using only the simplest of means (within the last year the upper 2 to 3 m of parts of the vein and an alluvial deposit near to the vein were mined; the gold was recovered as particles and micro-nuggets); Soltera is confident that modern exploration techniques will allow for the further extraction of gold from the area and is expeditiously moving to exploit the mining concession. Highly qualified opinion (non 43-101) is that characteristics for 2M ounces exists in just one small section of the vein that has had work performed on it by Puma Minerals and Latin Americas leading producer of refined gold, Peñoles. Peñoles re-interpreted Puma Mineral's exploration drill data and after further work Peñoles estimated (non 43-101 compliant) that a 1.3 km length of the vein would have the potential for more than 500,000 ounces of gold to a depth of 100 m and that a 2 to 2.5 km length to a depth of 400 m would have potential for more than 2 million ounces (assuming a grade of 10 g/t). The vein has more than 1,000 m of underground galleries. The vein extends north-south, is sub-vertical, and is accompanied in places by a stockwork system of small quartz and pyrite veins that can extend up to 300 m from the main vein.

 

Soltera Mining Corp. is an exploration stage company primarily focused on the exploration of its El Torno project. The El Torno gold prospect is a past-producing gold mine and Soltera believes that modern exploration techniques will allow for the further extraction of gold from the area. The site has good infrastructure basics in place, the region is at altitudes around 4,000 m and the nearest permanent habitation is the village of Santa Catalina about 20 km to the east. The property consists of four mining rights covering a total area of 7,800 hectares. Soltera plans to commence the exploration program with geochemical prospecting to evaluate the presence of mineralization along and around the complete vein, as well as in specific areas of the stockwork system.

 

Upside Valuation: We anticipate potentially significant upside share price movement and higher valuation as the story of this new listing to the market gets better known and exploration results verify historic data. With less than 45M shares outstanding, this new issue currently trades under US$1 per share.

Independent Links for further DD on Soltera Mining Corp.


 


Notable Mining Participants in Argentina

Three major projects have been responsible for growth:
 

1) Bajo de la Alumbrera Project (copper and gold) - owned by Minera Alumbrera S.A. (MIM Holdings, North and Rio Algom)
2) Salar del Hombre Muerto - Fenix Project (lithium) - owned by Minera del Altiplano SA (FMC Lithium Co.)
3) Cerro Vanguardia Project (gold and silver) - owned by Minera Mincorp SA (Anglo American associated with local Perez Companc S.A.)

 

Although not in production, two other important projects are:
 

1) Pascua-Lama - a bi-national Chilean-Argentine project run by Canadian company Barrick. The company will invest $950 million to develop the project in the San Juan province.
2) Agua Rica - the mine is situated along the side of huge mountains in a very heavily mountainous area. The Veladero gold-silver project in Argentina’s western San Juan province is part of the El Indio gold belt that straddles the borders of Argentina and Chile.

 

Other prospects include the Pirquitas silver, tin and zinc mine in north western Jujuy province, owned by Sunshine Mining.

------    ------    ------     ------    ------    ------

 

The majority of the large mining projects are controlled by the local subsidiaries of multinationals. There are also several smaller, listed, foreign companies that are active in exploration and development.

Companies with gold exploration properties in Argentina (Names are expandable in the non abridged version of this report):

ALEXANDER MINING PLC
AMERA RESOURCES CORPORATION
ANACONDA MINING INC.
ANDEAN RESOURCES LIMITED
ANTARES MINERALS INC.
APEX SILVER MINES LTD
AQUILINE RESOURCES INC
ARGENTEX MINING CORP
ATW VENTURE CORP.
BALLAD GOLD & SILVER LTD.
BARRICK EXPLORACIONES ARGENTINA S.A.
BARRICK GOLD CORPORATION
BHP BILLITON
CANYON RESOURCES CORP
CARDERO ARGENTINA S.A.
CARDERO RESOURCE CORP.
CASCADERO COPPER CORPORATION
CLOUDBREAK RESOURCES LTD.
COEUR ARGENTINA S.R.L.
COEUR D ALENE MINES CORP
COGNITO LIMITED
COMPANHIA VALE DO RIO DOCE - CVRD
COMPANIA DE MINAS BUENAVENTURA S.A.A.
COMPANIA MINERA ESPERANZA
COMPANIA MINERA SOLITARIO DE ARGENTINA S.A.
COMPANIA MINERA TRENDIX S.A.
CONDOR RESOURCES INC.
CONSOLIDATED PACIFIC BAY MINERALS LTD.
CORO MINING CORP.
ESTELAR RESOURCES LTD.

EXETER RESOURCE CORPORATION
FOMENTO MINERO DE SANTA CRUZ S.E. - FOMICRUZ S.E.
FREEPORT MCMORAN COPPER & GOLD INC
GEOCOM RESOURCES INC
GLOBAL COPPER CORP.
GOLDEN ARROW RESOURCES CORPORATION
GOLDEN CHINA RESOURCES CORPORATION
GOLDEN PEAKS ARGENTINA S.A.
GOLDEN PEAKS RESOURCES LTD.
HOCHSCHILD MINING PLC
HUNTMOUNTAIN RESOURCES
IAMGOLD CORPORATION
IMA EXPLORATION INC.
INTREPID MINES LIMITED
LA MANCHA RESOURCES INC.
LA PLATA GOLD CORPORATION
LAKE RESOURCES NL
LATIN AMERICAN MINERALS ARGENTINA S.A.
LATIN AMERICAN MINERALS INC.
MANSFIELD MINERA S.A.
MANSFIELD MINERALS INC.
MARIANA RESOURCES LTD.
MARIFIL MINES LIMITED
MARIFIL S.A.
MAURICIO HOCHSCHILD ARGENTINA S.A. - MH ARGENTINA S.A.
MERIDIAN GOLD INC.
MINAS ARGENTINAS S.A.
MINERA ANDES INC.
MINERA ANDES S.A.
MINERA ANTARES ARGENTINA S.A.

MINERA AQUILINE ARGENTINA S.A.
MINERA EL DESQUITE S.A.
MINERA MARIANA ARGENTINA S.A.
MINERA PATAGONIA S.A.
MIRASOL ARGENTINA S.R.L.
MIRASOL RESOURCES LTD.
OPAWICA EXPLORATIONS INC.
OROPLATA S.A.
PACIFIC RIM MINING CORP.
PACIFIC RIM MINING CORPORATION ARGENTINA S.A.
PALLADON VENTURES LTD.
PATAGONIA GOLD PLC
PATAGONIA GOLD S.A.
PORTAL RESOURCES LTD.
RIO DOCE ARGENTINA S.A.
RIO TINTO
ROME RESOURCES LTD.
ROYAL GOLD, INC.
SILVER STANDARD RESOURCES INC.
SOLTERA MINING CORP.
STEALTH MINERALS LIMITED
SURAMINA RESOURCES INC.
TECK COMINCO LIMITED
TNR GOLD CORP.
VEGA GOLD LTD.
XSTRATA PLC
YAMANA GOLD INC.
YAMIRI GOLD AND ENERGY INC.

 

Gold exploration properties in Argentina (Names are expandable in the non abridged version of this report):

AGUA NUEVA (LA CABEZA NORTH)
AGUAS CALIENTES
AMARILLO
AMICHE
ARGENTINA PROJECT
ARIZARO-LINDERO
ARROYO CASCADA
ARROYO VERDE
BAJO POBRE
BATIDERO GOLD
CALCATREAU
CANADON
CANADON LARGO
CARRIZAL
CERRO CHOIQUE
CERRO MOJON PROJECT
CERRO MORO
CERRO NEGRO
CERRO PUNTUDO
CLAUDIA - CERRO VANGUARDIA
CONDOR - YAMANA
CRESPO
DIABLILLOS
DIENTE VERDE PROJECT
DON SIXTO/ LA CABEZA
EL ACAY
EL CAMINO
EL DORADO (SALTA)
EL TORNO
ESQUEL
ESTRELLA - YAMANA
FAMATINA

GARCIA - RIO DE LAS TAGUAS
GASTRE
GUALCAMAYO / QUEBRADA DEL DIABLO
HUACHI
HUALILAN
INCAHUASI
INCAMAYO
LA BREA/LAS CARACHAS
LA BRECHA
LA CAROLINA
LA ESPERANZA/ ANDEAN
LA FORTUNA PROJECT
LA MANCHURIA
LA ORTIGUITA (LA ORTIGA)
LA PALOMA - SYRAH (PATAGONIA)
LAGUNA DE LOS TOROS
LAGUNA VERDE
LAGUNAS LOS PATOS
LAS BAYAS (EVELINA)
LAS CARACHAS
LAS FLECHAS
LEJANO
LIRIO/ JOSEMARIA
LOS AZULES / SAN JUAN
LOS DESPOBLADOS
LOS DOS BUHOS
LOS MENUCOS (EL PUESTO ET AL.)
LOS MENUCOS CERRA LAMINA
LOS MENUCOS CERRO ABANICO
MADRYN RIFT
MANCHA BLANCA
MESA (LAS MELLIZAS)

MICMAR - MARTINETAS
MILAGRITO
MINAS AZULES
MOGOTE
MORRO (#36)
NORTHERN PROPERTIES
PARAMILLOS
PENASCUDO
PINGUINO
PONCHA
RACHAITE
RANCHILLOS / RIO BLANCO
REGALO
RIO GRANDE
ROSARITA
SALAMANCA
SALAR DE ORO
SAN FRANCISCO - PACIFIC RIM
SAN JORGE (VALLE DE USPALLATA)
SAN JOSE (JUJUY)
SAN RAFAEL (ANCHORIS)
SAN ROQUE PROJECT
SANTA CRUZ (24 PROPS)
SANTA CRUZ PROJECT
SASCHA
SIERRA DE LAS MINAS
SIERRA NOVA
TACA TACA
TORUEL
TRES HERMANAS
VARVARCO
VICUNA

 

Economic and Political happenings in Argentina
Note: Madison Avenue Research is neutral in stance; the following are from contributed commentary by political, economic, and media pundits in-the-know:

 

A presidential election is set for October 28, 2007; Cristina Kirchner, the wife of the current president, Nestor Kirchner of the Partido Justicialista (PJ, or Peronists), and a popular PL senator, is well placed (according to Argentine political/media pundits) to place first. Mr Kirchner has enlarged his influence over the bulk of the Peronist party, which has a majority in Congress, while successfully courting sections of the opposition and obtaining the support of 2/3 of provincial governors thus forming a broader political alliance. Mrs Kirchner’s honeymoon period may prove short-lived, since she faces a number of challenges if she is to preside over a smooth transition from rapid GDP growth rates in 2003-07 to more sustainable levels. If Mrs Kirchner is successful, her ability to govern is likely to be relatively firm, at least until the congressional election in 2009, as she will enjoy support from the political alliance that her husband had fostered.
 

The economy has rebounded from a recession and less than stellar performance during 1999-2002, stirred by peso devaluation and high commodity prices. Some economists predict the closing of the output gap, bottlenecks and the scarcity of financing should temper GDP growth going forward. Inflows of foreign direct investment should average around 2% of GDP. A decline in fiscal surpluses is also predicted. The next government may address the issue of US$25 billion in “hold-outs” who did not participate in the 2005 debt exchange. A government under Mrs Kirchner is likely to continue to maintain a more interventionist role for the state, especially with regard to infrastructure and energy, continuing to set aside free market tendencies of the 1990s. Unorthodox measures, such as price controls, are a likelihood in order to achieve policy goals, at least until the 2007 election and quite possibly in 2008. In terms of effects on the mining industry... continued support and no surprises.
 

Related Mining in Argentina Links
The Mineral Industry of Argentina - USGS (2005) [PDF]:
http://minerals.usgs.gov/minerals/pubs/country/2005/myb3-2005-ar.pdf

MBendi, Argentina Mining - Overview: http://www.mbendi.co.za/indy/ming/sa/ap/p0005.htm

 

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Disclaimer & Disclosure: The information contained herein is believed to be accurate but this cannot be guaranteed. The analysis does not purport to be a complete study of securities and issues mentioned herein, and readers are advised to discuss any related purchase or sale decisions with a registered securities broker. Companies mentioned herein may be very early stages of development and thus can therefore be subject to business failure, and are to be considered speculative and high risk in nature. Reports herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned. The author may or may not hold a position (long or short) in the securities mentioned herein. This is a journalistic article and the author is not a registered securities advisor, and opinions expressed should not be considered as investment advice to buy or sell securities, but rather opinion only. The publisher may make take journalistic liberties employing the use of pseudonyms as reference contacts and accepting information at face value from what it believes to be credible sources. Further disclaimer and disclosure regarding various aspects of this report / article including compensation and other points may be seen at http://www.madisonaveresearch.com/disclaimer.htm.
 

 
 
 

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