On which exchanges do your shares trade at the moment?
TSX-V (BAT)
Pink Sheets: BELDF
Frankfurt: 68B
Batero Gold Corp. is a Vancouver-based precious and base metals exploration and development company focused in Colombia's prolific Mid-Cauca porphyry gold and copper belt. The region is relatively under explored and is host to two world class gold deposits. Can you tell the readers more about your flagship Batero-Quinchia Project?
Located at the south end of the Mid-Cauca Gold Belt along the Romeral Fault system in the Municipality of Quinchia, Department of Risaralda, Colombia, the Batero-Quinchia Project is approximately 190 kilometers WNW of the Colombian capital, Bogota.
Yes, this belt hosts two world class gold deposits: Marmato (Medoro Resources) with 9.8 million ounces gold at a 0.3 g/t cut-off, and La Colosa (AngloGold Ashanti) with 12.3 million ounces of gold at a 0.3 g/t cut-off.
The Batero-Quinchia project is located approximately 100 kilometre’s from the La Colosa Gold Deposit and approximately 20 kilometre’s from Medoro’s Marmato Mountain Gold Deposit.
We have 100% ownership in the Batero-Quinchia Project, comprising a 1407.43-hectare tenement. The project includes three known gold porphyry target centres as defined from a historic 2006 phase 1 drill program. All drill holes and mineralization will be used and built upon by Batero for a future NI-43-101 compliant resource estimate.
Batero is well financed with approximately $16 million in working capital. The company is strategically budgeted to generate results through an aggressive exploration and drill program to produce a compliant NI-43-101 resource estimate.
On October 27, 2010 we initiated a Phase 1 16,000-metre drill program involving four drill rigs.
What distinguishes your company from others in your space?
We have a very strong management and a proven technical team that includes key people who have contributed to several of Colombia’s most significant discoveries to date. We also implemented a favourable share structure that has built-in upside leverage for share value appreciation if the company successfully meets it’s milestones by growing its historical asset base, specifically the successful drilling outlining three gold porphyry centres by AngloGold Ashanti in 2006. Batero is well financed and believes it can deliver its projected milestones without having to further dilute the share structure.
Can you explain why you have chosen to explore in Colombia?
There are several key reasons. First, its largely untapped yet prolific geological potential makes Colombia a rare opportunity. Colombia is on similar geological belts to Peru and Chile, yet Colombia is relatively still unexplored with modern techniques. Further, Colombia’s past security issues and political instability are largely behind it now. These and other factors have helped position Colombia among the world’s top jurisdictions for mining and mineral exploration.
While historically Colombia has been one of the world’s top gold producers through artisanal and placer mining, over the last 8 years under the Uribe government, and now newly elected President Santos, the country has also transformed its business climate to attract foreign investment.
Can you highlight the key pros and cons of working in Colombia?
In the past, security issues limited exploration in Colombia. While these issues still pose some risks that investors need to be aware of, the likelihood of any issues has been considerably reduced. Quinchia is considered socially stable. Further, the Colombian government, under leadership of Juan Manuel Santos, is very supportive of mining and further development of this sector.
According to the World Bank, Colombia is the most “business friendly” country in Latin America. During the past five years, the Colombian economy grew by 4% annually. In 2009, Colombia's GDP registered an increase of 0.4%, a positive growth during global recession.
Colombia’s mining sector achieved 72% growth in foreign direct investment in 2009 over 2008. Confidence in Colombia is increasing as investors recognize the opportunity and see Colombia as an emerging and secure investment destination.
With respect to infrastructure, access via all-weather roads to Batero’s project is excellent. In fact, the Pan American highway is just 8km from our site, which is also tied into the main power grid. The Cauca River is contiguous with our southern boundary and has port access. Matecana International airport in Pereira is about 1.5 hours’ drive away.
We are now completing a full-service base camp to house field workers, drillers and our geological team.
Rafael Alfonso Roa, Director of Batero’s Colombian Operations and Exploration Manager and Director, is considered one of the pioneers of AngloGold Ashanti Colombia, where he was Exploration Manager and Vice-President. He headed up the politico-social strategies for that company between 2003 and 2008 and is regarded as the pre-eminent individual in the country in this capacity.
Rafael works alongside the local communities, meeting with the mayor and local groups, and is integral to Batero’s efforts to further develop good partnerships and healthy co-operation in the area.
What is the outlook for the commodities that you are focused on?
We believe we are in a long-term bull market for gold and copper that has been ongoing for 10 years now.
What are the main challenges that you face in operating your business?
Mining or exploration companies face issues — social, environmental, technical, and political. Our approach is to address these and other known areas of concern pro-actively and responsibly. Although Colombia has a rich history in artisanal and placer mining, its organized approach to sustainable growth is new. To this end, local authorities are motivated to work co-operatively, and we believe the bureaucratic hurdles are manageable, efficient, open and positive.
How are you dealing with these challenges?
We have an active social and environmental committee and involved the local community in all aspects of our project. Among other things we source employment locally and hold regular community forums and meetings with local leaders and community representatives.
Who is your target market?
We view our financial partners/investors as long-term partners in this project. Our investor base has supported Batero from the outset, is committed for the long term, and is active in the market as share appreciation continues.
Batero has worked hard to minimize risk by funding the company in such a way that milestones can be achieved through strategic budgeting and clearly defined goals.
Who are your competitors?
We do not view other companies in the region as competitors. We believe the success of other companies in Colombia will foster success for all.
Who are Batero Gold’s major shareholders?
Batero is mostly owned by the founders and management: the property vendors who are now strong partners and participants in the operations, several sophisticated resource funds, private equity funds as well as wealthy private investors and top-grossing brokers. We also have strong institutional support from a significant financing at $1.60 from the following:
- Sentry Select Precious Metals Growth Fund
- RBC Global Precious Metals Fund
- Sprott Asset Management
- Dynamic Precious Metals Fund
- Libra Fund LP
- 49 North Resources
- Several European funds
How many employees do you have?
~200+
What would you say is the biggest risk for investors in your stock?
As with any junior exploration venture there are inherent risks. However, we have mitigated some of these thanks to having successful historical drilling at the project site where we are delineating and adding to the initial success. As well, we are fully capitalized to achieve an aggressive work program over an estimated 1.5 to 2 years without a need for additional financing. From a market perspective the company’s fully diluted basis and asset we are building on are transparent.
How much cash do you have on hand?
~$16M
Fully diluted approximately 59M shares for $35M.
What is your monthly cash burn rate?
At the moment $~1.3M with 4 drill rigs turning 24/7
Do you have sufficient funding for the foreseeable future or will you be going back to the market for more capital?
Yes, Batero has sufficient funding for the foreseeable future
Is there anything that sets you apart in terms of the type of technologies that you are using?
Batero is incorporating the latest techniques in geophysics, geochemistry, drilling and 3 dimensional modeling. We believe we have some of the top technical individuals available today using the latest technology to assist us in all aspects of the exploration process. We have engaged outstanding consultants for 3rd party independent analysis.
Describe some of your major achievements in the past 12 months?
- -IPO took place 6 months ago with a $5.3 million dollar initial financing
- - Raised $15.75M in October
- - Completed an extensive geochemical and geophysical study and field mapping and structural geology analysis
- - Commenced 16,000m drill program in October with 4 drill rigs
- - Developed an outstanding technical team and built a company within 5 months that comprises over 200 people
- - Developed overwhelming local political and social support for the project
- - Well ahead in completing necessary environmental baseline studies
- - Own 100% outright of the project with no NSR
What do your shareholders have to look forward to in the coming year?
With 4 drills operating, targeting 4000m of drilling per month you can expect steady news. Beyond building upon the positive 2006 historic drill results Batero drill programs intend to deliver data for a compliant NI-43-101 resource estimate.
Who are the key players on your management team and what kind of experience do they bring to the table?
Brandon Rook, B.Sc., B.A., President and CEO
- Mr. Rook has 15 years of work experience both as a geologist, project manager, and entrepreneur. His past experiences include 12 years in exploration and project management, corporate management and corporate development in the public markets; including, marketing and investor relations. Focus has been in diamonds, precious and base metals and oil and natural gas.
- B.Sc. degree in Geology and BA in Economics and Sociology.
Rafael Alfonso Roa, B.Sc., Director of Colombian Operations, Exploration Manager, Director
- Most recently Mr. Alfonso was Exploration Manager and Vice-President of AngloGold Ashanti Colombia. He headed up the politico-social strategies for the company between 2003 and 2008.
- Mr. Alfonso’s career includes working for AngloGold Ashanti, Billiton and TVX Gold Inc, in senior roles and as General Exploration Manager. He has directed numerous successful exploration programs and was instrumental in multiple discoveries such as La Colosa, San Luis, and Quinchia.
- Mr. Alfonso is the founder of the Camara Colombiana de Mineria-CCM (Colombian Chamber of Mining). Mr. Alfonso was also the advisor to the Department of Mines, the Geological Colombian Service – Ingeominas.
Nick Demare, Chief Financial Officer
- Mr. Demare, is a chartered accountant and has been President of Chase Management Inc. since 1991, providing accounting, management, regulatory compliance and corporate secretarial services to private and public-listed companies.
Darrell Podowski, B. Sc., LLB Director
- Mr. Podowski is a Partner of the law firm McMillan LLP located in Vancouver, BC.
- He has particular expertise in corporate finance transactions, mergers and acquisition transactions and negotiating mining earn-in and option agreements, purchase and sale transactions, strategic alliances, and joint venture transactions in the resource industry.
James Hutton, B.Sc., M.B.A. Director
- President and Chief Executive Officer of Hutton Capital Corporation and Hutton Capital Management, companies engaged in investment banking. Mr. Hutton designed and executed in excess of $1.4-billion in flow-through share resource financings for the Canadian energy and mining sectors between 1998 and 2006. He was the founder, President and Chief Executive Officer of the Canada Dominion Resources Group of Companies, one of the largest and most successful flow-through share funds in Canada.
Do you hope to make the transition from exploration to mining in the future?
Our expertise is in identifying prospective projects, discovery, delineation and bringing projects to feasibility. This is our focus and how we aim to deliver shareholder value.
What are the prospects for expansion at Batero?
Batero is always looking to add shareholder value. With our strong operational footprint in Colombia we have a built-in capability for further acquisitions if opportunities arise. The company has strong relationships in Colombia and is always open to new possibilities. Presently the company’s focus is to expand the high-priority targets at the Batero-Quinchia Project.
Disclosure: Batero Gold is a Stockhouse client.