Mining production begins to decline in the 1560s, and Honduras rapidly declines in importance.

The subordination of Honduras to the Captaincy General of Guatemala has been reaffirmed with the move of the capital to Antigua, and the status of Honduras as a province within the Captaincy General of Guatemala will be maintained until independence.

Beginning in 1569, new silver strikes in the interior briefly revive the economy and led to the founding of the town of Tegucigalpa, which soon begins to rival Comayagua as the most important town in the province, but the silver boom peaks in 1584, and economic depression returns shortly thereafter.

Mining efforts in Honduras are hampered by a lack of capital and labor, difficult terrain, the limited size of many gold and silver deposits, and bureaucratic regulations and incompetence.

Mercury, vital to the production of silver, is constantly in short supply; once an entire year's supply is lost through the negligence of officials.

By the seventeenth century, Honduras has become a poor and neglected backwater of the Spanish colonial empire, having a scattered population of mestizos, native people, blacks, and a handful of Spanish rulers and landowners.

By the seventeenth century, Honduras has become a poor and neglected backwater of the Spanish colonial empire, having a scattered population of mestizos, native people, blacks, and a handful of Spanish rulers and landowners.