Keith Piggot
Chairman, President, CEO & Director
Goldgroup
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Insight

Focus on Mexican Gold

Mon, 10/21/2013 - 10:42

According to the consulting company SNL Metals Economics Group (MEG), almost 30% of the total value generated by the global mining industry in 2012 pertains to gold mining, while gold mining exploration projects made up 47% of the world’s total investment in mining exploration during the same year. Keith Piggott, Chairman, President, CEO & Director of Goldgroup, saw an opportunity for gold mining in Mexico and has since surrounded himself with an expert team in order to grow the company into a large precious metal producer focused on Mexico. “It was about 16 years ago when I started focusing on gold in Mexico, after being involved in the gold mining industry in Australia for many years. My intention was to start a small gold mine in Sonora with technology I had developed and patented in Australia,” Piggott explains. From there, the company developed its Cerro Colorado asset, a heap-leach operation located in Sonora. “Cerro Colorado was a very low capital-cost operation because we started it with little money and we are experts in starting mines with very little cash. In 2012, it produced approximately US$30 million of revenue,” Piggott adds.

To offset the output decline at Cerro Colorado, which is in the final stages of its productive life, the company has acquired three other properties in the country: Caballo Blanco, located in Veracruz; a participation in San José de Gracia, arguably Sinaloa’s most important development project, through a 50% interest in DynaResource de Mexico; and Cerro Prieto, located only 150 kilometers away from Cerro Colorado. Goldgroup plans to start production on this last project during the last quarter of the year. “Goldgroup spotted the opportunity to use its resources and manpower from Cerro Colorado in a place that is located only 150km away,” says Piggott. “This means that Goldgroup intends to transfer all of its resources from Cerro Colorado to Cerro Prieto which already has all of its major permits, such as those for the environment and change of land use.”

Goldgroup considers itself a Mexicanized company, and this philosophy is the driving force behind its long term growth strategy. Piggott himself has lived in Mexico for 15 years, and an ever-increasing number of the company’s shareholders are Mexican. “All of our projects are in Mexico. We think that it is better to be Mexicanized so that people feel that we are part of their community. We are very community-orientated, community conscious, and committed to the country we work in,” Piggott mentions. “The mining industry brings wealth to surrounding communities. Given that mines are often located in remote areas, they benefit the communities that are traditionally neglected,” says Piggott. “Goldgroup has already started installing access to water in some of the communities near our Caballo Blanco project, and the communities are very thankful for it. We introduced a mobile clinic with a doctor and for a lot of these communities this was the first time they had received proper medical care. We also make donations to schools and we carry out community development programs,” he says. “Nowadays, as more mines are being developed in Mexico, more local professionals are developing the technical skills necessary to run those mines. Contractors are now becoming Mexicanized, and this trend is gradually filtering back to equipment as well,” says Piggott. For example, all of the heap-leach tanks that Goldgroup uses in its operations are built in Hermosillo, Sonora. “The whole point of employing Mexican service providers is that you are supporting the local economy. We have faith in the country, in its people and in its government,” he says.