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Mexico’s record gold production takes it closer to bullion superpower status

Mexico may not be breaking records at London’s Olympic Games, but back home it is scoring big. On Monday, the Mexican Chamber of Mining (Camimex) announced the country hit a new record in gold production in 2011, reaching 88.6 tons of the precious metal, nearly 22% more than in 2010.

The report’s summary, published by La Prensa, says last year gold output gave the Latin American nation the highest growth rate in the world in terms of bullion production.

Goldcorp Inc. (NYSE:GG & TSX:G) remained the largest gold producer in Mexico, with 21.5 tonnes from its mines, while Fresnillo PLC. (LON:FRES) kept second place with 13.9 tonnes of gold extracted from its five mines.

The chamber added that refined gold production in Mexico reached 84.1 tonnes last year, with a market value of over $4 billion.

The report supports recent analysts’ predictions that Mexico may be the next gold superpower.

Matthew Piggot, a mining analyst with Thomson Reuters GFMS, is projecting that the nation – which only this past year made Bloomberg’s Top 10 list of gold producing countries– may have “mega” gold deposits still untouched.

Mexico is already the world’s main silver producer and an attractive mining destination because it is one of the lowest-cost mining jurisdictions in the world. For example, in Mexico it costs an average of $325 to produce an ounce of gold; whereas, in the rest of the world, the average is $649 per ounce.