HERMOSILLO, Sonora — It is the 21st Century equivalent of gold fever. One need go no further than a patch of desert 110 miles southwest of Tucson to discover the best promotion possible for mining in the State of Sonora.
There, on the outskirts of Caborca, known more for grapes and olives than mines, New York-headquarterd Capital Gold Corp. is living a corporate dream. Its open-pit gold mine, which just began production in August 2007, is producing far more than was projected in a market where the price of gold is three times the amount it had banked upon - a rate at which it would have made a handsome profit.
The company´s El Chanat Mine, part of a Minera Santa Rita S. de R.L. de C.V., a wholly-owned subsidiary, produced about 575 ounces just over three years ago. A year later, it was up to 11,046 ounces. It has now produced more than 75,000 ounces and in 2011 it expects to produce 65,000 to 70,000 ounces. The mine has upped its “proven and probable reserve” to 832,000 ounces.
It took the company all of six months to become profitable and it is today one of the lowest-cost gold producers - at about $246 an ounce - in the world.
The company´s storybook success comes against a backdrop of a buoyant mining market throughout Sonora. Mining of copper, gold, molybdenum, iron, silver and other minerals more than doubled from 2009 to 2010, said Jesus Moreno, director of communication for Sonora´s Secretary of the Economy. With resumption of copper production at the Cananea mine, which had been shut for 30 months due to a strike, the state is on course for another large increase in production, he said.