We hear a lot of things here and there about the Mysterious Cities of Gold sequel(MCoG 2 thereafter). It is time to do some cleaning between true and false ... I prefer to stick with full objectivity, to something concrete. Here is a chronological summary of what we can say:

1996 - 2000 : first rumors

A petition was launched on the Web in 1996, perhaps by the producers themselves ... Many sites relay the information. The intended effect seems to be reached because of rumors emanating from producers about the sequel. Deyriès Chalopin meet with success during anime conventions and the sales of VHS and DVD of the series astonishes themselves!
Even then, although Deyriès and Chalopin seem quite agree for a sequel, the problem comes from French TV channels, because even France2 (which aired the first series), does support the project. M6, another French TV, might be OK ...
Nevertheless, the sequel of the story is already pretty much in place: it picks up the story where we left it and the children fly to the great western sea, to Japan and the second City of Gold. En route they meet a new British character in a village in California. The English is regarded as a sorcerer in his country; he would have fled in North America and be in possession of an encyclopedia of the Mu civilization. Esteban's father might not be dead and we could see him again in MCoG 2. The series format would be the same but the documentaries would be abandoned because "the documentaries do not concern the TV channels today" said Deyriès. See the interview of Deyriès in 2000 for more details.

2000 - 2002 : first disillusionment

The project seems to be put aside, because of the lack of broadcaster. During an interview in 2002, Chalopin is pessimistic: "without a French TV channel, financial risk is too great and the project can not be done" ...

2003 : true and false rumors!

During 2003, the series is aired again on Franch TV France 5. It is also the 20th anniversary of its creation. There are some rumors about a possible sequel here and there, but nothing concrete. You can even read that Odile Schmidt, the French voice of Tao, is dead, which is shamefully wrong (she has also participated in a convention in July 2003). Peace to his soul.
In February 2003, an event is organized by Gala magazine for the 20th anniversary of Cities of Gold series. During the event, the sequel of The Mysterious Cities of Gold sequel was announced. The problem is that it is not the sequel imagined by Deyriès and Chalopin, but sequel at the initiative of AK video, which don't have the rights from the first series but only from the book The King's Fifth. This new series would be completely different from what we know: no Condor, no medallion, no Tao, no City of Gold! No more information on this "sequel" since February ... Should be considered with caution. (Note: this "sequel" has finally been abandoned after only 3 episodes)

In July 2003, Deyriès and Chalopin speak about a possible sequel during the Japan Expo convention. The news are really good! Bernard Deyriès and Jean Chalopin were present as well as doublers Odile Schmidt (French voice of Tao) and Pierre Hatet (French voice of Gomez). The first (bad) news is that the sequel mentioned above is abandoned because NHK (Japanese TV channel co-producer of the first series) no longer supports the project and French TV France 2 does not want to broadcast a new series (this channel had broadcast the first series)! But there is a (very) good news too: they are now thinking at a new project (with the same script presented above) which would be 100% French. Since the TV channels do not want to support a series of 39 episodes, Deyriès and Chalopin now consider a feature film! There are currently trying to recover royalties on the book The King's Fifth, the fisrt series, the characters, etc., which takes time (they had no copyright in the first series). At the same time, Chalopin believes that the so-called "sequel" of AK Video is "contrary to the interests of their series: he is therefore opposed to it. See his interview in 2003.
The character design and animation would be the same, which is confirmed by the first images of the "old" and "new" characters! During this conference, Deyriès even asked the public's opinion on this "new" design, which is a good sign! They want a result that can satisfy both the young adults who saw the first series but also the young kids of today who never saw Esteban and his friends. Difficult challenge they have to face with!
Anyway nothing is yet written and copyrights are not yet acquired. But this time we can be hopeful to see this sequel! I will keep you informed of upcoming news on this page.

2004 : almost no news!

Deyriès and Chalopin still support their project. However, there are copyrights issues because of the AK Video sequel entitled The New Adventures of Esteban and Zia, which is based solely on original book by Scott O'Dell, The King's Fifth (which means no Tao, no condor, no city of gold, etc.). In short, AK Video would not need the agreement of Deyriès and Chalopin. Two episodes have already been produced.
Two projects are emerging: an official sequel of the first series (thanks to Deyriès and Chalopin) and an unofficial by AK Video. Personally, and from your remarks, the official project is widely acclaimed.

All these pictures where taken during the Japan Expo 5 convention and are avalaible in full size.