Bull Market for Peruvian Junior Gold Mining Stocks

When you consider Peru in general, probably what comes to mind is the stunning culinary sector or the vibrant tourism industry. However, in business terms, there are other booming sectors to think about.

One of the key drivers behind Peru’s steady economic growth is the well-known mining sector. In that sense, Peru is steadily gaining international attraction among foreign investors that will propel it to become the growth engine of Latin America in 2019.

Investments in the Peruvian mining sector got off to a good start this year, with total investments of US$ 335 million in January – up 48% compared to the same month in 2018. This is a direct result of the creation of promising commercial opportunities for companies involved in the mining sector. Despite some declines in previous years, the outlook of the mining sector in Peru is encouraging. It is currently running more than 200 operating mines, supporting those interested in mining to form a company in Peru.

Moreover, Peru has a well-recognized mineral wealth, making up 5% of the world’s total gold reserves. Take all of this, combine it with the Peruvian government’s pro-mining attitude, and you get an outstanding business environment for mining firms. New announcements reveal major Stock Exchange-listed companies are ready to explore, develop and extract new gold mining fields in Peru.

Peru Junior Mining Stocks – Peruvian Gold Sector

The Central Reserve Bank (BCRP) Governor, Julio Velarde, projected that mining investments will continue to grow with a total amount of US$ 5.7 billion in 2019, and US$ 6.1 billion in 2020. The strategic plan for 2030 includes mining project portfolios exceeding US$ 59 billion.

Although Peruvian exports are becoming more diversified, gold still ranks second in terms of top-export products from the Inca country, only surpassed by copper. Therefore, it is not only an interesting investment sector, but also provides benefits to the whole country.

The largest gold-producing country in Latin America offers various areas with multiple reserves, where La Libertad, Cajamarca, Arequipa, and Ayacucho are the most prominent gold hosts.

Peruvian officials are working to improve these top destinations at a much faster rate. Energy and Mines Minister, Francisco Ismodes, stated Peru will join the Top Ten rankings by the Fraser Institute of attractiveness for mining investments in 2021. This is a result of upcoming mining projects, abundant with mineral deposits, toll mining, and a favorable investment climate.

New Opportunities Attract New Investments

There are numerous global mining companies whose operations take place in Latin America. For instance, a bulk of investments and mining activities in Peru involve Canadian companies, of which prominent actors are listed on the Toronto Stock Exchange (TSX). As new announcements indicate, a new delegation of Stock Exchange-listed entrants will participate in upcoming gold extraction projects.

Regulus Resources, for example, is involved with the AntaKori copper-gold project in northern Peru. Since 2018 it has drilled continuously and entered into Phase 2 of the drilling program, aiming to complete 20-25,000m of drilling in 2019.

In the same vein, Dynacor – a Canadian dividend-growth gold production corporation – reports it has received positive geophysical results regarding the discovery of a large copper-gold porphyry in the northwest area (Tumipampa project). It involves six high priority drill targets. For 2019, outlooks reveal Dynacor’s production of gold will approximately reach 82-92,000 ounces.

Sable Resources, another firm that utilizes precious metal projects, announced it has completed the second drill phase at the Scorpius Project located in the Miocene Gold Belt of Peru. Sable Resources benefits from the right to acquire 100% of the project extraction. Following this news, Tom Obradovich, chairman & CEO of Sable Resources announced a new wave of 450,000 stock options.

A new merging arrangement agreement between Titan Minerals (Australian) and Core Gold (Canadian) announced Titan will purchase a big share of common shares of Core Gold. This provides growth potential to both parties that are continuously evaluating gold and silver projects within Peru. Titan is currently commissioning the Vista gold plant in southern Peru. Besides, it has exclusive rights to acquire an 85% share of the Last Antas gold project. Core Gold owns an exploration project on the main Peruvian Andean gold-copper belt. Together they aim at extending extraction projects in both Peru and Ecuador.

The presence of these Australian and Canadian firms together with their major Stock Exchanges listings proves the Peruvian gold stock market is clearly growing. There is no better time to jump into this promising future as an investor, where dividends are shining bright at the end of the tunnel. Furthermore, these Canadian and Australian firms are key examples that show why mining is attractive in Peru.

Upcoming Challenges in Peru

The impact of mining on a host state will entail new challenges for Peru. Despite the many legalized plants that operate smoothly, illegal mining remains a major problem for Amazonian regions such as Madre de Dios. In response to this, the Peruvian government is establishing three military bases in the La Pampa area, which has been badly affected by illegal mining activities including deforestation and mercury pollution. This is why Peru’s Energy and Mines Ministry (MEM) discussed new efforts to achieve the development of a sustainable mining sector that improves both wellbeing and growth.

One example is the opposition from communities worried about mining activities and their environmental impacts in the past years. For this reason, Southern Copper Corp and Newmont Mining Corp have shelved proposed mines in Peru. Also, President Martin Vizcarra said it will only support mining projects where local communities feel at ease.

Generally, the government delegates high importance to the promotion of mining activities to encourage economic growth. However, responsible extraction methods will definitely get more attention in the near future.

Ready to Enter the Peruvian Mining Sector?

With Regulus Resources, Dynacor, Sable Resources and the merge of Titan Minerals and Core Gold as examples of Peruvian gold mining stocks, it is the perfect time to really take a leap into this investment opportunity.

Nevertheless, it can be a difficult one to engage in investments in a foreign country. For instance, the complete understanding of the Peruvian fiscal system for mining companies is a tough and challenging job. Therefore, partnering with a local expert is advisable to run all your legal & accounting tasks or your commercial representation strategy, among others.

In the case of any related queries, please contact our team and see how his local team can assist.