One of our long term recommendations U.S. Gold (See our original recommendation by clicking here) merged with Minera Andes to form Mcewen Mining (MUX) which has production out of Argentina, near term production in Nevada and Mexico with Gold Bar and El Gallo and a world class exploration land package surrounding Goldcorp in Argentina and along the Cortez Trend in Nevada.
We have been a supporter of this business combination prior to the announcement. (Click to see GST article recommending merger.) Remember Goldcorp acquired Andean Resources for its Cerro Negro property for over $3 billion dollars and this area has not yet been explored thoroughly. There is exciting potential of high grade gold in this district and we expect to hear news form Argentina in the immediate future.
Mcewen Mining has doubled from its December low. After such a powerful move, MUX is entitled to see a short term consolidation around the 200 day moving average. However, the 2011 downtrend appears to have ended as the long term support has held. The last time U.S. Gold broke its downtrend and 200 day moving average to the upside in early 2010, it went on to make a 400% gain. As we have said history does not always repeat itself, but it does mimic.
In a recent interview with legendary mining investor Rob McEwen, we discuss the geopolitics in Argentina and Mexico, the rising tide of resource nationalism and what investors must look for in a quality junior mining investment. Rob also gives us an update on the exciting potential of McEwen Mining in Argentina, Mexico and Nevada.
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