Industry Trend Analysis - Gold: Golden Future Still Years Away - MAR 2015

BMI View: Significant mine output growth in Panama is likely several years away as various mining projects have yet to see commercial production. While frontier mining globally will see headwinds due to subdued metal prices, Panama will remain of interest to miners given the country's ample mineral reserves and solid business environment .

Panama is unlikely to see significant growth in mine output until the latter half of the decade owing to various projects remaining in development. The country has substantial untapped potential though to become a top destination for mining investment in Central America. Panama's above-average business environment within the region and the country's significant metal reserves should lead to sector development. A report issued in January 2014 by Panama's mining chamber estimated the country possesses approximately 22.7mnt of copper and 12moz of gold. Indeed, Panama ranked in tenth place out of 16 in our Q215 Regional Risk/Reward Index, the highest ranked country in Central America.

Given the lengthy mine exploration and development process, we do not expect any new mines to come online until the final quarters of our forecast period. For now, the Molejon gold mine, operated by Petaquilla Minerals, will remain the country's primary source of gold output. The mine saw significant output declines in H213, though full production is expected to be reached in 2015, leading to stable gold output growth. The largest project on the horizon is Canadian miner First Quantum's USD6.2bn Cobre Panama project. The mine is estimated to hold 11.8mnt of copper, 7.3moz of gold, and 131moz of silver, making it one of the largest such deposits in the world. However, the mine is not scheduled to reach commercial production until the second-half of 2017. Pershmico Resources is developing its Cerro Quema mine, while US-based junior miner Bellhaven Copper & Gold continues to develop its Pitaloza project.

Project Development Continuing
Panama - Gold And Copper Projects

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