Newmex to explore Mexican properties

With cash in hand from a large financing, Newmex Mining (MEX-T) will set about exploring its two Mexican gold properties.

Created in February by Great Lakes Minerals (GLK-T), Newmex is a wholly owned subsidiary which controls the company’s interest in the Lluvia de Oro gold mine and the Palmarito silver-gold project.

Newmex recently completed a rights offering, issuing 8.25 million shares at $2 each. The total aggregate proceeds from the offering topped $18.1 million.

At Lluvia de Oro, the company will begin reverse-circulation (RC) drilling on the Lluvia Shear North zone, which strikes along 2 km from the Creston open pit. Drilling will also test the Pozo zone, 1 km south of the Creston pit.

Lluvia de Oro began producing in 1996. Annual output is expected to reach 25,000 oz. gold at an average life-of-mine cash cost of US$210 per oz., including royalties. An RC program will be completed at Palmarito, where the company conducted 700 metres of drilling before finances ran out. Newmex intends to complete a prefeasibility study at Palmarito by year-end.