Thursday, January 18, 2007

South America Continues to Reveal Opportunities in Technology, Digital Media, Renewable Energy and Mining

South American Mining Opportunities
Chile is the largest copper producer in the world and with copper prices seeing record highs in 2006 the region has reaped the economic rewards as GDP growth reached over 6% in 2005 and over 5% for 2006.
According to Stephen Poloz, Senior Vice-President, Corporate Affairs and Chief Economist with Export Development Canada, “During 2005, copper exports contributed to 16% of Chilean GDP, and lately that figure has been around 23%. This steep rise in the contribution of copper to Chile’s GDP is related to copper’s meteoric price rise in the past two years.”
Argentina is the second-largest country in South America next to Brazil with rich natural resources and strong GDP growth between 8-9% over the past few years. As a result of historical political uncertainty Argentina has seen relatively little exploration when compared to nearby regions such as Chile and Brazil. However, as the political climate has significantly improved so has the investment potential of this region. Evidence of this is seen in the participation by many resource companies such as GoldCorp Inc. (NYSE: GG; TSX: G), Golden Peaks Resources Ltd. (TSX: GL), and Barrick Gold Corporation (NYSE: ABX; TSX: ABX).
In addition to operational properties in Brazil and Chile, GoldCorp Inc. (NYSE: GG; TSX: G ) currently owns 37.5% of a gold and copper producing property in Alumbrera, Argentina. According to the Company, the Alumbrera property has been averaging approximately 700,000 tonnes of concentrate containing 600,000 ounces of gold as well as 190,000 tonnes of copper metal.
Golden Peaks Resources Ltd. (TSX: GL) , an exploration and resource development company holds more than 385,000 acres of prospective land holdings in four of Argentina’s most established mining districts. The Company’s main focus is on five high priority gold projects within Argentina covering the provinces of La Rioja, Neuquen, and Chubut. Golden Peaks’ La Fortuna project in Chubut, Argentina is located in the same region as the nearby Esquel and Navidad deposits and exhibits distinct geological characteristics which the Company believes to be evidence of its potential to be the region’s next major gold discovery.
The world’s leading gold company Barrick Gold Corporation (NYSE: ABX; TSX: ABX), has global operations that include various South American locations such as Peru, Chile and Argentina. Barrick’s Argentinean Veladero mine is located in the San Juan province immediately south of the Company’s Pascua-Lama cross-border development property, which spans both Chile and Argentina. According to the Company, the Veladero mine cost $547 million in capital construction and produced 56,000 ounces of gold in 2005. The Pascua-Lama property has gold, silver and copper mineralization and has seen Barrick invest approximately $1.5 billion in construction capital as they prepare for production start-up in 2010 with estimates of producing 750,000-775,000 ounces for the first 10 years.
Overall, while emerging markets can potentially be volatile due in large part to political risk, the strong demand across sectors such as alternative energy and transportation, mining and many segments within technology continue to present signs of long term opportunity. With several strong years of performance already realized, many speculate as to what the future will hold; however as global demand remains solid and as long as the political climate remains conducive to capital investment, continued strength appears likely.
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