Mexus Gold US (OTCMKTS:MXSG) Is Today's Mining Focus

Mexus Gold US (OTCMKTS:MXSG) has been surging higher in spite of the recent drop in gold prices. This comes as investors are excited about the company's fully owned Santa Elena mine located 54km NW of Caborca, Mexico. Mexus is developing this mine with MarMar Holdings, which is one of the best known companies in Mexico for gold mining. Judging by the company's updates and the chatter on the message boards, shares of MXSG could just be starting its bull run.First up, a little background on the company. Mexus Gold US is an American based exploration company with holdings in Mexico that was founded in 2009. Besides the Santa Elena mine, Mexus recently added another mine to its portfolio. The San Marco mine is a gold and silver mine which sits in the municipality of Pitiquito, 200km S of Puerto Penasco and 250km NW of Hermosillo, Sonora in the community of Puerto Libertad. This property encompasses a total of 970 acres. The previous owner had identified 110,000oz. of gold through prior geological evaluations. The property is in a 50/50 joint venture with MarMar holdings. Mexus also owns rights to the Ocho Hermanos property located 80km N of Hermosillo, Mexico. This property contains 6900 acres and has both gold and copper on the mine.Earlier this month, Mexus announced that a Merrill Crowe plant would be the best recovery system at the expanded Santa Elena mine. The Merrill Crowe plant to be used was loaded and shipped from Walnut Grove, CA. The plant cleared customs on December 8 and arrived at the mine site on December 12. The assembly of the plant is not complicated and should be fully operational next month. The company said that the added time and effort to import a Merrill Crowe plant will be well worth it in terms of production.

MarMar is also in the process of delivering a 42inch jaw crusher to the mine site. The company believes that this powerful high capacity plant will prove invaluable and will meet the needs of the mine for the foreseeable future. In addition, MarMar has hired an expert in Merrill Crowe systems with the responsibility to ensure efficient precipitation of Gold and Silver at the mine. CEO Paul Thompson said:

"Our mine plan is progressing and continues to evolve and grow as our JV partner builds the site out for maximum production. We’ve made adjustments as deemed necessary. While these improvements to the mine are pushing the start of production the changes will mean a larger and more profitable mine."

What makes Mexus Gold so promising is that there are already successful mines in the area surrounding Santa Elena. It's not a question of if there's gold and silver there, but can Mexus and MarMar successfully pull the metals out of the ground. That seems to be the debate surrounding the company. While one of my colleagues here at Insider has been skeptical of Mexus, I'm more optimistic and the momentum is certainly towards MarMar and Mexus being able to achieve its goals. Just look at the stock price and the market is saying that this optimism is warranted.

For the skeptics, here's what we know. The property sits in an area which is currently being mined by some of the largest mining companies in the world. Mexus has drill results which show a high grade, multi vein system throughout the property. The company is nearing production having very little debt which is unheard of in the mining industry and Mexus Gold could be cash flow positive as early as January or February 2017.

Currently trading with a market cap of $104 million, MXSG is indeed a speculative investment, but one well worth the risk at current levels. If the Santa Elena mine comes through and starts producing, we will see shares shoot higher rather quickly. We will be monitoring the progress on the Santa Elena mine for our subscribers. For the latest updates on MXSG, sign up below!

Disclosure: We have no position in MXSG and have not been compensated for this article.