"Faith that South America would be a new frontier like Australia...

"Faith that South America would be a new frontier like Australia in the 1970s looks like paying off for Perth based Mundo Mining when it starts production within months.

"We are happy with Brazil and Peru, which have good prospects but are relatively unexplored. You can get drill rigs and equipment to get things done, and the bureaucracy helps you, doesn't hinder you," says CEO John Langford.

The company was attracted there by an expert Australian team of geologists with experience in South America who have a significant shareholding in the company.

Mundo bought a proven gold reserve and is attracted by the size of Brazil's Archean Shield, the geological structure where gold is found, which is 2.5 million sqkm in size compared with 1.2 million sqkm covering Australia's gold reserves.

Compared with Australia, where 10 times more money has been spent looking for the mineral, Brazil is relatively unexplored.

Mundo is targeting mid-sized, low-cost, multiple gold projects to ensure a sustainable production and profit flow. Mundos Engenho gold project near Brazil's third city is about to start mining a massive resource of up to 3 million ounces over 10 years.

The Torrecillas gold project in Peru is entering the feasibility stage and promises 50,000 ounces of gold per annum.

Engenho was built for $13 million, 21 per cent below previous expectations thanks to tight management of the construction process and favourable operating conditions in South America. It's an impressive feat when rising mining costs are a big issue in the global gold industry.

The project is shooting to be a serious producer of 250,000 ounces of gold a year in four to five years.

Langford is an industry veteran from project corporate finance and a director of the company that owns the Diggers and Dealers Mining Forum held annually in Kalgoorlie. Among local explorers he likes West Australian miner Integra, whose share price has quadrupled in the past year. "When the gold market is moving like this, it is better to be a producer than an explorer," Langford says..."

http://www.theaustralian.news.com.au/story/0,25197,23446987-23850,00.html