MEDELLIN – There is a rich tradition of gold in Colombia.
Even against a backdrop of the usual gringo “Don’t come home in a body bag,” or, “Colombia, like British Columbia?” There is a centuries-long tradition of precious metals (and stones) in South America’s longest standing democracy.
Nowhere is it stronger than in hard-working Antioquia, the department that surrounds the sunny city of Medellin.
“In the town of Anori we have miners that created our first paved roads in the region. Zancudo has its own currency,” says Nicolas Lopez Botero, secretary of Mines for the Department of Antioquia. “Maybe 90 percent of all of Antioquia’s municipalities started as mines.”
Mr. Lopez and his office organize the annual Feria Minera in Medellin. It started today (Wednesday) and brings a record 12,000 (or more) attendees and 280 exhibitors to this large and gorgeous city in the Andes. I’d call that a regular scrum.
I have been coming here since 2007 or so: El Marmato, Zancudo, Burritica. La Mina. Titiribi. It’s getting crowded.
I cannot keep up with the dozens of new faces and prospector companies in the Colombia mix. Not just gold either, but silver, copper, iron ore, coal, platinum. Oil.
(Photo left to right: Bob Allen, Georges Juilland, Dave Forest, Colin Andrew & Amit Tripathi at Titiribi -- Thom Calandra photo)
In the beginning of the gold recovery that started – very slowly – in Colombia around 2007 or so, few market analysts, bankers and writers cared. No one could raise the money to re-start the engines of a mill or a drill rig.
That is so 180-city right now. “I have my hands full with the properties we have that are in demand,” says Robert “Bob” Allen, founder of Grupo de Bullet. Mr. Allen, from Arkansas, has been staking mineral rights and properties in Colombia since about 1980.
In the past two years, his concessions have become the basis for successful gold prospectors led by Canada-traded Continental Gold (TSX: T.CNL, Stock Forum). Many others are on the list, including young Miller O’Prey’s Solvista Gold (TSX: V.SVV, Stock Forum), Antioquia Gold (TSX: V.AGD, Stock Forum), Hans Rasmussen’s Colombia Crest Gold (TSX: V.CLB, Stock Forum) and … well … you get the picture.
“We’re so busy, we’ve had to buy some of the offices next to us here in Poblado (popular neighbourhood) and across the street to manage special projects like hydroelectric and iron ore,” says Mr. Allen, who hosted me at an apartment this week in the bustling city of almost five million. He is also chairman of Continental Gold, whose Buritica prospect appears to be one of the country’s most potent new discoveries fast-tracked for gold production. We’ll likely see a first-time resource statement for CNL in coming weeks, I believe.
I rely on trusted contacts – Robert Allen for one, writer Bob Moriarty for another, European and Peruvian engineer Georges Juilland at Sunward Resources (TSX: V.SWD, Stock Forum), Toronto banker Ari Sussman at Continental Gold, Jaime Gutierrez (whose family has owned and operated meals smelters in this country for at least two generations), Jorge Jaramillo Pereira of Carla Resources – to steer me in the right directions. So far, thanks to some lucky timing (I got here early in the run-up and I lived here for a few months way back in 1981), most of my research in Colombia has “worked out.”
Our audience at Stockhouse probably enjoys some of the “color” that comes with touring a select few companies in tropical Antioquia. But really, that audience is an investing one. It wants ideas, even in this shaky metals equities market (one I believe turned for the better in mid-August).
The question I keep getting from the audience and from folks here in Medellin is this: “How do you tell the real deal?”
No one answer. I am not a geologist. I am a writer, a researcher and an investor. I have been doing all those things my entire life, and yes, I make mistakes, such as the SEC censure and fine I endured and settled six or seven years ago. That was an event that shook my life and taught me life lessons. I also, by the way, lose money and I have seen my holdings pared, like everyone in natural resources, these past five months.
At any rate, I look for a firm and verifiable plan with documentation on-site. I seek geologists with spot-on modeling techniques. I like properties that can offer several million ounces of gold to prove up in short periods of time, say 18 months or less. I have been looking at properties here and in Ghana, which I find similar to Colombia in geology, and of course elsewhere in Africa and the Americas, for the past 10 years.
Sunward Resources at Titiribi just granted me my third visit, if memory serves me correctly. Unlike other companies here, Sunward’s Georges Juilland, vice president of exploration Amit Tripathi and COO David Forest hold only intermittent investor tours. They do not allow other mining companies on site, even on a CA basis.
Dr. Tripathi, a geologist from India, just conducted one of the most technical presentations I have received in the past 10 years or more. I am convinced this company in its next Canada-compliant resource statement before year’s end will “show” well more than seven million gold ounces with copper equivalents at its Cerro Vetas and Chisperos targets at Titiribi.
Naturally, there are no guarantees. Yet Dr. Tripathi demonstrated to a small group of us that he and his team of geologists have nailed a predictive structural model whose drill results almost spookily confirm what Sunward sets out for on its grids, cross sections and so on.
Waiting for that sun
I am not right now going into the model as I need to spend some time doing it justice for a mass audience. Leave it said that when Dr. Tripathi distinguishes, among the drill core and his 3D models, between Chisperos with its hydothermal controls naked of breccia and Cerro Vetas with its copper-gold porphyry mineralization, I “get it.”
“No two structures, no two deposits are the same,” says Dr. Tripathi, a structural geologist. “I don’t believe in any set model. Every deposit is a fingerprint. Look here alone, we have seven different types of mineralization.”
Sunward, whose shares I do NOT own, appears to have clinched the working but always evolving “model” for targeting its already-50,000-plus meters of drilling intact. It also has seen its share price hold onto more of its value in the past five challenging months for mining equities than most junior companies. That’s worldwide.
The ownership, where 10 large shareholders including Mr. Juilland and his brother Michele, along with Canada’s Lukas Lundin, Paulson the NYC hedge funds operator and so on, controls more than three-quarters of the common shares, new CEO Colin Andrews and Dave Forest, who is a geologist and a fine writer, tells me.
I will have more later this week or earlier next week on Sunward and about another: tiny and speculative Colombia Crest, an early-stage prospector near Sunward in the rich Middle Cauca Belt of Colombia. Colombia Crest is trying to exploit its first nine drill targets in and around the Venecia and Fredonia areas of Antioquia.
Leave me to say that the Canada-traded shares of CLB, which I do not own, make it among the lowest-priced Colombia gold equities with high speculative potential and enough of a treasury to get through its formative next year or so. CEO Hans Rasmussen, a long time Rio Tinto country manager who knows Argentina, is out to show his investors he knows Colombia, too.
On the administrative front, I am told the governor of Antioquia this week signed a technical study that had been sitting on his desk for eight months. The application was from the company, Colombian Mines (CMJ) that vended Venecia into Colombia Crest.
CLB CEO Rasmussen said he had not received word as of yet. Such a signature from the governor sets the stage for drilling permits for as much as 1,900 hectares in the area of Venecia. Technical studies generally take several months before they are converted into fully permitted drill contracts.
At this stage, Colombia Crest CEO Rasmussen says he is working with his team to complete soil sampling for prime targets called La Arabia in Venecia.
NOTES: This is my 13th or 14th or possibly my 15th visit to Colombia. I am learning more every visit about the political landscape of Antioquia, where the current governor, Luis Alfredo Ramos, has a term that expires in October. He has scores if not hundreds of drilling permit and other mining-relation applications on his desk awaiting approval before he leaves office. My guess is that he will “clear his desk” regarding some or most of these applications, including some of the ones for Colombia Crest, before he leaves office. We’ll see.
- I hope in September to see Golden Fame’s (TSX: V.GFA, Stock Forum) newly-purchased property near the town of Guanajuato, Mexico. Guanajuato is a colonial hillside town with a subterranean chamber of tunnels for transportation and for mining.
- I will be speaking and showing and telling atCambridge House’s Toronto conference Thursday Sept. 15.
- I will be speaking and eating and speaking some more at Brien Lundin’s New Orleans Investment Conferencein late October. You can click on that link to get a deep discount on the entrance fee.
Finally, I offer this disclosure note aboutTorrey Hills Capital in San Diego, California. I am a partner of Torrey Hills Capital, which is in Del Mar, near San Diego. That investor outreach firm lists none of the companies in this report as clients.
Stockhouse members – the service is free – can see my entire portfolio online. It is under the portfolio function and my user name, which is TCALANDRA. There is nothing in my portfolio suitable for risk-averse investors. I am not a financial adviser. Owning any of these securities could result in your participation in the crying game. Please see my comments in this and other articles about the benefits of holding securities and physical metals for long spans of time.
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