Historic Reports
 

Larry Myles Reports Special Update: Nicaragua's Gold!

The characteristic feature of capitalism that distinguishes it from pre-capitalist methods of production was its new principle of marketing. Capitalism is not simply mass production, but mass production to satisfy the needs of the masses.

March, 2011

Nicaragua has the potential
....to become the largest gold producer in Central America 

"GOLD IN NICARGUA; IT IS SAID TO EXIST THERE IN ENORMOUS QUANTITIES..." -- Frank Von Puhl, New York Times 1891

A value that does not change is a constant; no matter how long that value lies dormant. In the case of gold; it has remained a value for over 4,000 years. Thus, it is history that dictates gold as a value, and has remained constant. This is not simply my opinion; nor is it fabulous or fabricated. It is simple fact: Gold is real money. Real money does not change as a value. You can spend it today or put it under your pillow for 100 years; and it remains a value. 

Understanding the dynamics of a value is one of the basic tenets of reality-based investing.  This is an investment stratagem, free of faults and delusions; and one that allows the individual investor to reap the rewards of a down to earth investment environment that relies upon rational decisions; decisions based on reason, hard facts and solid market data. 

By working in reverse and applying solid market data, hard facts and reason while considering the many opportunities of investing in Nicaragua, I am confident that after setting aside the glitter and glamour of the subject matter (gold) and instead, presenting a compelling stream of evidence, the following statement will enjoy popular consensus:

Nicaragua has the potential to become the largest gold producer in Central America

Too many times in the past it has been a case of "cry havoc, and let slip the dogs of war..."

From an investment perspective, any attempt on my part, to downplay the previous decades of political hazards and peril in Nicaragua would be a shabby insult to your intelligence. But to not offer strong favourable comment on the quality of Nicaragua’s current in-country system would be even more demeaning to the hard-working people of Central America’s largest country. Over the last few years, Nicaragua’s democratic leadership have succeeded in expunging the husks and phantoms from their national tapestry and succeeded in showcasing a stable, free-market economy. Allow me to include a snippet from my January Gold Report.

To grasp the true significance of the vast gold reserves waiting to be discovered in Nicaragua, it is important to fully understand centuries of historic evidence. Note: Although I consider my report far beyond mere jabber and chatter of a rank amateur, I am neither historian nor geologist!

Gold in Nicaragua? A Question of Historic Proportion 

Most of us posses the mind and memory to realize during the 16^th century, Spain was able to conquer and exploit the Aztec Empire. Historians have taught us that the amount of gold and silver taken out of Mexico by Hernan Cortez was almost incalculable. What many people do not realize is that much of the Aztec gold originated in the northern region of what is now the largest country in Central America – Nicaragua.

In the 10^th century, the Aztec people migrated down from the Mexican lowlands into present-day Nicaragua; becoming actively involved in the mining of gold.  This was evidenced by a wealth of archaeological discoveries of pre-Columbian axes and other Aztec tools found in and around the long-forgotten Nicaraguan gold mines. The ancient Aztecs were a people rich in copper and silver and enjoyed a more than adequate amount of gold. They were also obsessed by a potent and prevailing desire to own more gold and were quick to realize the rolling hills in northern Nicaragua contained abundant amounts of near-surface, high-grade gold.

I have often wondered what would have happened in Nicaragua, if not for an Indian prospector in 1545 discovering the 2,000-foot-high ‘mountain of silver’ at San Luis Potosi, in what is now Bolivia. It is my contention that if Spain would have maintained their high level of interest in exploring for gold in Nicaragua, the country would have easily gained early recognition as an important gold producer of global proportion.

Instead, Spain opted to ruthlessly exploit the silver at Potosi; and in so doing, exported thousands of Nicaraguan’s to work in the Bolivian mines. Seeking out gold in Nicaragua turned into a hit or miss affair; with little effort on anything other than exploiting the high-grade surface and near-surface gold. I am in no means dismissing their efforts, as the Spaniards had a keen eye when it came to gold, and the potential for great wealth did not escape them. This was certainly proven out over the succeeding centuries, as they extracted large quantities of the precious metal. There is an abundance of evidence left behind; in the way of excavations, and the remains of over 1,500 crude clay furnaces, simple implements and accessories pertaining to the mining of gold. They were able to work the ground thoroughly, as their primitive methods permitted. 


We are not going to ponder Nicaragua's entire historic time-table; suffice it to say that after the Spanish conquest and the shift of focus to Peru and Bolivia, developments in Nicaragua remained relatively static over the next three hundred years. And as we are looking through a gold-related prism, we can safely move on to the end of the last century.

For it was in 1891 when Frank Von Puhl penned his piece for the New York Times; and in passing taking the time to mention the discovery of pre-Columbian Aztec artefacts used to carry out primitive mining. Von Puhl also introduced us to three rugged miners returning to Managua from northern Nicaragua, providing this stunning revelation..."carrying bags of gold, weighing as much as seventy pounds each, and individual nuggets weighing in at twenty-seven ounces."  

Aztec and Spanish Surface Mining Aside
….the gold has to come from somewhere!
 

As tantalizing as all of this historic evidence may be, remember: we are still only talking about past efforts that at best, only lightly tapped the gold-wealth in Nicaragua. In 1905, Standard Oil assigned a team of geologists to conduct a three-year evaluation program in northern Nicaragua.

Their conclusions: the extensive area appeared to contain some of the richest placer deposits known to the mining world. All very intriguing; but again, we are talking only about surface and near-surface gold. 

To catch a further glimpse of what lies beneath Nicaraguan hills, we must re-visit the efforts of the American miner, Charles Butters and the famous San Albino Gold Mine. It was 1927, and Butters was on the cusp of proving out that Nicaragua held highly profitable deep gold deposits. Unfortunately for the mining giant, it was also the year when Nicaragua began its long and chaotic journey toward building an independent nation. As Butters would later deeply regret, part of that process involved the destruction of the fledgling mining industry. For those who would enjoy a steeper introduction to why I am convinced that Nicaragua will soon become an important producer of gold (and silver), consider reviewing my previous report, as it clearly shines a light on the promise of the high rewards that await an environmentally and socially responsible gold exploration company. 

Nicaragua, a treasure chest of gold…

We are now in the early years of the 21^st century, and finally, the importance of deep concentrations of gold in Nicaragua is reaching critical mass. It was only a few short years ago when Nicaragua listed its chief exports (in order of importance): coffee, shrimp, lobster, cotton, tobacco, beef, sugar, bananas; and dead last: gold. 

Thanks to a mining-friendly environment established by the Nicaraguan government; and the strides made by responsible Canadian mining companies, gold has moved from last place to fourth! As to current estimates indicating Nicaragua has 3.8 million ounces of gold and 4.9 ounces of silver available for exploitation; those estimates are so incredibly light that they border on the absurd.

I can only recommend; but I strongly recommend investors enter the due diligence process as the first step before investing in Canadian junior mining companies working in Nicaragua. There is little to be gained by participating in a narrative action through mere dialogue and gesture, without obtaining hard fact and market data. My own conclusions are that Nicaragua offers much in the way of value for the serious investor.

Companies worth your due diligence efforts; Golden Reign Resources (TSX.V: GRR), B2 Gold Corp. (TSX.V: BTO) and Calibre Mining Corp. (TSX.V: CXB). 
 

Larry Myles
Larry Myles Reports
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Larry Myles is neither a geologist nor a financial analyst. I do not purport to offer personal investment advice nor recommendations. While all statements of fact are derived from reliable sources, an d are believed to be accurate, I make no warrant that they are so. You must do your own research and check statements of fact for yourself. My opinions are precisely that, my opinions. I do not accept any responsibility for any gains or losses you may experience resulting from actions taken based on my opinions. If not otherwise qualified, you should consult with your own personal financial advisor before engaging in any investment activities. Larry Myles Reports does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Larry Myles may actively trade in the investments discussed in this publication. Larry Myles may have a substantial position in the securities recommended and may increase or decrease such positions without notice. I do not know your personal financial circumstances. I am not your personal financial advisor. You must do your own due diligence. By entering this web site, or reading LMR reports, you acknowledge and accept the foregoing.