Madison Avenue Research Group via Sector Newswire has published a report outlining the untapped gold mining potential in Argentina and pulse of affairs in Argentina for the mining sector. Also in the report is a Special Situation Review of Soltera Mining Corp. offering insight and opportunity on Soltera’s large gold-rich quartz vein measuring up to 14 km long and 14 m wide known as the El Torno Gold Project and their objective to target areas with multi-million ounce gold potential.
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), September 26, 2007 announcement of gold exploration with Cardero Resource Corp. (AMEX: CDY)(TSX: CDU) "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)(TSX: YRI) 2.9M oz Gualcamayo gold deposit. North of the Yamana Gold deposit is the El Torno Gold Project of recently listed Soltera Mining Corp. 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 at Madison Ave Research Group.
Soltera Mining Corp. 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.
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. 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.
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: foreign companies, without limitation, are allowed to be exclusive owners of mining properties, A stable tax rate that lasts for 30 years following the submission of a feasibility study to the Secretary of Mines, financial inducement for mining investors, uniform application of new mining laws.
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.
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.
The Madison Avenue Research Report on Gold Mining in Argentina also contains a summary of notable participants in the mining industry in Argentina. The non abridged version has expandable sections on many of these notable participants including Rio Tinto PLC (NYSE:RTP), IAMGOLD Corp (NYSE:IAG) (TSX:IMG), Apex Silver Mines Ltd (AMEX:SIL), Barrick Gold Corp (NYSE:ABX)(TSX:ABX), Xstrata PLC (OTO:XSRAF), BHP Billiton Ltd (NYSE:BHP).
The abridged report with graphics along with full disclaimer and disclosure is available via a link from the corporate home page of MadisonAveResearch.com for a limited time.