Categories: Precious Metals
Topics: General Precious Metals

Mexico Wants Barrick to Invest in Boosting Gold

 By Andres R. Martinez and Carlos Manuel Rodriguez

April 7 (Bloomberg) -- Mexico is seeking to attract Barrick Gold Corp., the world’s largest producer of the precious metal, to help explore the two-thirds of the country that may contain untapped gold fields.

“I’ll be really happy if Barrick could come to invest in Mexico during my administration,” said Maria Jimena Valverde, director of Mexico’s mining administration at the Economy Ministry. Mexico is in talks with Barrick about the “very high exploration potential” that the country could offer, Valverde said in an interview late yesterday.

Gold production in Mexico has registered a 24 percent annual growth rate in the last five years, according to the Mexican government. This year Valverde expects an increase of “at least” 40 percent to 84.6 tons of gold (2.98 million ounces) as five new mining operations reach full capacity, including Goldcorp Inc.’s Penasquito mine.

Mexico is betting on gold output to boost production after labor disputes stopped work on July 30, 2007, at Grupo Mexico SAB’s Cananea.

Grupo Mexico says its Cananea copper mine has the largest copper reserves in the world. Fresnillo Plc, a unit of Industrias Penoles SAB, says it has the largest silver mine in the world.

Some Chinese companies have also approached Mexico about investing in copper projects in Mexico to secure supplies, Jimena Valverde said. She declined to identify the companies until an agreement was reached.

Chinese Partners

“The Chinese companies want to buy, to partner and to produce here,” she said.

Barrick representatives have informally met with Mexican officials, said Vincent Borg, a company spokesman, in an e-mailed statement. “In the future, there may well be interesting opportunities but at the moment there have not been any meaningful discussions,” said Borg.

Barrick Gold rose 0.7 percent to C$35.87 in Toronto Stock Exchange trading. The shares have dropped 20 percent so far this year.

Gold for immediate delivery gained $10.50, or 1.2 percent, to $883.30 an ounce on the New York Mercantile Exchange’s Comex division.