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Peru Mining Stocks

The Definitive Guide to Peru Mining Stocks

By Luke Burgess
Friday, February 26th, 2010

A raging bull market in metals has sent mining companies on a frenzied hunt around the world seeking high-quality mineral investment opportunities.

Peru, in particular, has been a hotspot destination for these firms due to the country's vastly rich natural resource base, well-developed mining infrastructure, fair tax policy, and mining-friendly government.

Early investors have been able to leverage these benefits into profit by investing in Peruvian mining stocks.

Take for example Compañía de Minas Buenaventura S.A. (NYSE: BVN).

Buenaventura is Peru's largest publicly-traded mining company with seven operating mines in the country. With help from rising gold prices, shares of BVN have increased as much as 137% in the past 12 months. Take a look:

2010_peru_mining_stocks_bvn.png

Investors in other companies have gained even more.

Peruvian precious and base metal junior explorers Andean American Mining (TSX-V: AAG) and Chariot Resources (TSX: CHD) have both returned as much as +500% in the past year. Check it out:

 Andean American Mining Chariot Resources
 2010_peru_mining_stocks_aag.png2010_peru_mining_stocks_chd.png


Many of the world's senior mining companies have operations in Peru. They've used the country's extensive natural resource base to build some of the world's largest and lowest cost precious and base metal mines, including Barrick Gold's (NYSE: ABX) Lagunas Norte and Newmont Mining's (NYSE: NEM) Yanacocha mines.

Other major mine developers and producers with operations in Peru include BHP Billiton (NYSE: BHP), Freeport-McMoRan Copper & Gold (NYSE: FCX), Pan American Silver (NASDAQ: PAAS), Southern Copper (NYSE: PCU), Hochschild Mining (LSE: HOC) and Teck Resources (NYSE: TCK).

These major producers have made Peru the world's largest silver producer, second in zinc, and sixth in gold production. Peruvian silver production totaled 135.8 million ounces in 2009. Meanwhile, zinc and gold production totaled 1.50 million tons and 6.42 million ounces, respectively.

The country also displaced the United States as the world's second largest copper producer. Domestic copper production was 1.273 million tonnes in 2009. Peru also produces molybdenum, tin, lead, iron ore, and a number of other industrial minerals.

Last year, investment in Peru's mining and energy sectors totaled $4.88 billion. And over the next five to seven years, Peru expects another $35 billion to be pumped into the country mining sector, creating extremely favorable conditions for growth.

As metal prices continue to heat up, shareholders of mining stocks with quality projects will be rewarded. And these rewards may be magnified with companies that have exposure to Peru's legendary mineral resource base.

To help get you started investing in the country's mineral sector today, here are...

Three Peruvian Mining Stocks You May Have Overlooked

 2010_peru_mining_stocks_bcm.png
 Company Bear Creek Mining
 Exchange: Symbol
 TSX-V: BCM
 Share Price
 $3.75
 Market Cap
 $258 million
 Website www.bearcreekmining.com

Bear Creek Mining is a Peruvian pure play with a large silver/zinc/lead resource base.

At its flagship Corani project, the company currently has NI 43-101 compliant proven and probable reserves of 258 million ounces of silver, 1.42 billion pounds of zinc, and 2.88 billion pounds of lead.

Bear Creek also has silver-equivalent measured, indicated, and inferred resources that total an additional 476 million ounces across its Corani and Santa Ana projects.

A positive pre-feasibility study for the Corani Project estimates average annual production of 10 million ounces of silver for the first six years of a 27-year mine life, with low cash costs and fast payback of capital costs.

Meanwhile, a scoping study for Santa Ana has examined a proposed, low-cost pure silver mine producing 5 million ounces annually in the first six years of an estimated 12-year mine life. Both projects are undergoing feasibility studies.

 2010_peru_mining_stocks_fvi.png
 Company Fortuna Silver Mines
 Exchange: Symbol
 TSX: FVI
 Share Price
 $2.65
 Market Cap
 $252 million
 Website www.fortunasilver.com


Fortuna Silver
is a Canadian mid-tier mineral company with projects in Mexico and Peru.

In Peru, the company controls a 100% interest in the producing Caylloma silver/zinc/lead mine. Fortuna operates the mine at over 1,000 tonnes per day (tpd) and is working on the permitting to further increase throughput to 1,500 tpd.

Exploration activities include testing of high-grade silver and base metal targets within the Caylloma Mining District and evaluation of surrounding properties to identify opportunities warranting more advanced exploration and development.

The Caylloma Mine has proven and probable reserves of 22.5 million ounces of silver, 229 million pounds of zinc, and 151 million pounds of lead with gold credits. Caylloma also hosts measured, indicated, and inferred silver-equivalent resources of over 17.5 million ounces.

 2010_peru_mining_stocks_nom.png
 Company Norsemont Mining
 Exchange: Symbol
 TSX: NOM
 Share Price
 $2.05
 Market Cap
 $164 million
 Website www.norsemont.com


Norsemont Mining
is a mineral exploration and development company focused on its 100%-owned Constancia copper/molybdenum/silver property in Peru.

The company has completed a positive definitive feasibility study for the Constancia project and is currently completing an environmental and social impact assessment in preparation for permitting.

The Constancia project is currently home to indicated and inferred resources of 3.96 billion pounds of copper, 102 million pounds of molybdenum, and 57 million ounces of silver.

Norsemont’s primary goal is to continue expanding the Constancia global resource base through the exploration of additional discoveries within the immediate vicinity of Constancia deposit.

Here is a list of other pure Peruvian mining stocks:

 Company Target
 Andean American Mining (TSX-V: AAG)
 www.andeanamerican.com
 gold, silver, copper
 Candente Copper (TSX: DNT)
 www.candentecopper.com
 gold, silver, copper
 Chariot Resources (TSX: CHD)
 www.chariotresources.com
 copper
 Cuervo Resources (CNQ: FE)
 www.cuervoresources.com
 iron ore
 Dorato Resources (TSX-V: DRI)
 www.doratoresources.com
 gold, silver copper, zinc, lead
 Duran Ventures (TSX-V: DRV)
 www.duranventuresinc.com
 gold, silver, copper, zinc, lead, molybdenum
 Dynacor Gold Mines (TSX: DNG)
 www.dynacorgold.com
 gold, silver, copper, zinc, lead, molybdenum, bismuth
 Gitennes Exploration (TSX-V: GIT)
 www.gitennes.com
 gold, silver, copper, zinc

 Grenville Gold (TSX-V: GVG)
 www.grenvillegold.com

 gold, silver, copper, zinc, lead
 Macusani Yellowcake (TSX-V: YEL)
 www.macusaniyellowcake.com
 uranium
 Panoro Minerals (TSX-V: PML)
 www.panoro.com
 gold, copper
 Rio Cristal Resources (TSX-V: RZC)
 www.riocristalresources.com
 gold, copper, zinc
 Sinchao Metals (TSX-V: SMZ)
 www.sinchaometals.com
 gold, silver, copper
 Solex Resources (TSX-V: SOX)
 www.solexresources.com
 uranium
 Straight Gold (TSX-V: SRD)
 www.straightgold.com
 gold, silver, copper
 Tinka Resources (TSX-V: TK)
 www.tinkaresources.com
 gold, silver, zinc, lead
 Trevali Resources (CNQ: TV)
 www.trevaliresources.com
 silver, zinc, lead 
 Vena Resources (TSX: VEM)
 www.venaresources.com
 uranium
 Zincore Metals (TSX-V: ZN)
 www.zincoremetals.com
 zinc, lead


As the Peruvian mining industry continues to expand, there will be a growing need for more energy. My colleague, Sam Hopkins, recently returned from the country where he got a first-hand look at Peru's growing wind energy projects.

To learn about Sam's Peruvian adventure — and two wind energy companies he believes will return expect upwards of 60% in short order — check out his latest report.

Good Investing,

luke_signature.gif

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire

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