FROM CERRO TO HERO
FROM CERRO TO HERO
Paul Harris, Director of Research The Colombia Gold Report 2012
Robert G. Carrington
President
Colombian Mines Corporation
Robert Carrington spent much of the 1990s jumping from helicopters to undertake geological studies, often in FARC-held territory. Colombian Mines Corporation is the exploration company that leverages his in country experience. Since 2005 the firm has acquired 300,000 hectares of titles with around 75 potential project areas. The company’s flagship projects are Yarumalito, El Dovio and Cerro de Cobre
In your 20 years in Colombia, have you ever seen a boom like this?
No. Other sectors, such as the oil industry have had booms, but this is the only time there’s been a boom like this in the mining sector. Colombia is a tremendously rich country. Its mineral endowment would probably rank it in the top 10 -15% in the world. Prior to the big mines in South Africa, Colombia had produced 35% of all the gold that mankind had ever produced. It’s truly one of the world’s great gold producing regions. But despite this history, there’s still a lot of low-hanging fruit for gold companies. Colombia is like Nevada was around 1950. With the onset of violence, much of the mining expertise in the country left. When Alvaro Uribe was elected president, he set the country on course to change the entire security profile, which was very successful. He was the one man who helped lay the groundwork and put Colombia on the course to attracting the interest the world has in it today.
Can you tell us about your Cerro de Cobre copper project?
Cerro de Cobre is located in the Chivor-Gachala Mining District, about three hours by car from Bogota. The area is covered by 283 ha of contiguous mineral contracts. Although no copper production has been recorded there is a tradition of emerald production.
Why is copper production so low in Colombia? And what is your opinion of the base metals sector in general?
There are a couple of reasons for low copper production. The first is that there are no smelters. If you produce copper in Colombia, you have to send it offshore. We need to come up with a method of producing electrolytic copper in Colombia that could go into some kind of copper fabrication facility. The second issue is that royalties are very high on copper, at 5% gross. Most base metal mines have a hard time sustaining more than about 3%. The government should take action on this, because many of the big deposits on the Middle Cauca belt are also going to have substantial by-product copper. Colombia could actually become a very substantial copper producer in the near future if it takes the necessary steps to modify this royalty schedule and if we can get a smelter established. Around our El Dovio project there are existing projects which have a good mix of metals. They have three to five grams of gold on average, 2-3% copper, 2-3% zinc, and maybe an ounce of silver. The big advantage is that if the gold goes down, the copper certainly goes up. You’ve got a nice mix of elements that makes for a very long-term, stable mine life.
Why is the company focusing on the Yarumalito and El Dovio projects?
Those were both projects I had worked on in the 1990s. Right now, Yarumalito is our flagship property. It is a very large gold porphyry system, which has tremendous potential to develop many millions of ounces. It is also a high-grade deposit with an almost vein-like structure. We’re drilling 24 hours a day, with four drills, and we quite possibly will have a fifth drill by the end of 2011. That’s where we’re spending the bulk of our money right now. However, with the grades and the metal endowment we see at El Dovio it could easily surpass Yarumalito very fast. It’s high grade, it looks like a fairly large system, and we’re seeing mineralization over a very long strike length. We just started where we knew there was mineralization and we keep stepping out and finding more and more. We hope to obtain our environmental permit and begin drilling the property at the end of the year.
What challenges has this increase in investment interest brought to the mining industry?
The government told the world that Colombia was open for business, but I don’t think they realised that the world believed them. There have been major problems in the application process for mining titles, and they are currently about 19,000 cases behind. There is also a problem with the ability of the authorities to execute drilling permits in a timely fashion—it routinely takes me three months to permit a drilling program in Colombia that I can permit in Nevada in two weeks. These are the kind of slow-downs that kill you in a public marketplace, because your investors don’t understand the bureaucratic obstacles. Colombia is a great country to work in; it has unbelievable potential, but the administrative bureaucracy has to be streamlined and really focused so it’s all in black and white and that everything’s transparent.