June 29, 2010 / 2:04 PM / in 7 years

UPDATE 1-Canada's Farallon plans second mine in Mexico

* Says expects new mine to be operational by July 1, 2013

* Indicated resources at Campo Morado-960,000 oz of gold

* Shares fall 5 pct in early trade

June 29 (Reuters) - Farallon Mining Ltd FAN.TO said it is planning a second mine at its Campo Morado property in Mexico and is initiating feasibility studies at four deposits, seeing the rapid rise in gold prices.

The company, which already operates a zinc mine, G-9, at Campo Morado and has mining and milling infrastructure in place, said it expects to start the new mine by July 1, 2013.

Farallon also said indicated resources at the four deposits at Campo Morado totalled 960,000 ounces of gold and 60 million ounces of contained silver.

The company is targeting an annualized production rate of 120 million pounds of zinc and 15 million pounds of copper, it said in a statement.

Shares of the company were down 2 Canadian cents at 35 Canadian cents in morning trade Tuesday on the Toronto stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Gopakumar Warrier)

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