Commentary, Home Page Featured, News

Nicaragua Emerges From the Jungle, Carrying Gold

COMMENTARY—Prospectingjournal.com—Nicaragua, with its colourful history of foreign domination, civil strife and prosperous mining, is once again a hot zone in the race for Latin American gold.

I say “once again” because the search for gold is nothing new to Nicaragua. The Spanish, who first arrived in 1522, were reportedly so impressed with the country’s civilization and gold deposits that they quickly destroyed everything through religious conversions and gold plundering. The “War of the Captains,” as these Spanish conquests came to be called, devastated the indigenous populations, while exciting European markets. Fast-forward to the early 1900s—same situation, but now with US marines instead of conquistadors, followed by the predictable American foreign policy of full-scale civil wars, guerilla leaders and then, ironically, booming modern tourism . . . really, it’s the classic Latin American “success” story.

But from a modern-day miner’s perspective, these former conquerors didn’t even scratch the country’s wealth. Nicaragua’s mining-friendly jurisdiction is situated in the Central American Gold Belt, from Costa Rica to Guatemala, with a total of more than 20 million ounces of historic gold production. Post-2008 saw the exit of a large number of mining companies, as budgets disappeared and fear permeated through the global resource markets. On top of this exit, recent (and ongoing) hotspots such as Colombia and Peru have continued to draw much of the foreign interest, with exploration potential in Nicaragua put on the backburner. Yet now, with the mining vacuum in place, companies are rushing in, and investors are once again turning their gaze.

A handful of Canadian gold explorers are actively pursuing projects, including major B2Gold (TSX: BTO) and the well-known Golden Reign Resources (TSX.V: GRR). BTO’s 2011 First Quarter Highlights from its Nicaraguan projects report a record gold revenue of $53.5 million and record gold sales of 38,754 ounces. BTO’s consolidated gold production for the first quarter from its La Libertad and Limon Mines in Nicaragua easily exceeded the Company’s first quarter budget of 31,766 ounces. Meanwhile, GRR is actively pursuing its San Albino-Murra property, a mine that produced 10 tons at 31 g/t gold annually in the 1920s. Recently released drilling results of 14 holes at San Albino confirmed the uniformity of high-grade, near-surface mineralization, while several holes have returned excellent gold intervals.

Two junior miners to look out for are Calibre Mining Corporation (TSX.V: CXB) and Cassius Ventures (TSX.V: CZ). Calibre, whose exploration is funded by B2Gold, is touting its Borosi concessions, totaling 86,700 hectares. Robert Brown, President, CEO and Director of Calibre claims that his Company’s slice of Nicaragua has not had any modern exploration, with the last real program conducted in the 1970s. Meanwhile, Cassius has acquired a private Nicaraguan Company, “Fortress de Nicaragua,” which owns 16 exploration concessions with a total area of approximately 168,000 hectares. These properties, known as the “Nicaraguan Gold Properties,” are currently in development.

It’s really a matter of a lack-of-exploration and an underdeveloped mining sector that may give Nicaragua the same boom felt in other Latin American giants. With the recent rush of Vancouver-based mining companies, who are pouring into the post-recession gold-mining void, the prediction is that Nicaragua is a country to keep a close eye on as the price of gold likely grows and global demand reaps rewards for smart investors.

Further companies in Nicaragua to look at include:

- FDG Mining (TSX.V: FDG)
- Caza Gold Corporation (TSX.V: CZY)
- Corazon Gold Corp. (TSX.V: CGW)

Chris Devauld
Senior Writer

Related posts: